Audit raises questions for nonprofit
Sarah A. Reid. McClatchy - Tribune Business News. Washington: Jun 12, 2008.
Abstract (Summary)
A seven-month grant review conducted by the Office of the State Auditor questions nearly $35,000 in travel expenses and another $64,000 in unallowable expenses by the Sandhills Community Action Program Inc. The Department of Health and Human Services awarded Sandhills Community Action grants to help low-income people find housing, weatherize homes and repair or replace heating and air-conditioning units.
Jun. 12--RALEIGH -- Employees of a Carthage-based nonprofit organization appear to have filled up their gas tanks while sick and on vacation, then billed state grants created to help needy families, according to the state auditor.
A seven-month grant review conducted by the Office of the State Auditor questions nearly $35,000 in travel expenses and another $64,000 in unallowable expenses by the Sandhills Community Action Program Inc.
The Department of Health and Human Services awarded Sandhills Community Action grants to help low-income people find housing, weatherize homes and repair or replace heating and air-conditioning units. The review calls for the department to ask to be reimbursed for the misappropriated funds.
"We are not actually saying there is anything criminal," said Chris Mears, a spokesman for the auditor's office.
Sandhills Community Action Program provides housing, home repair and food for low-income families in Anson, Montgomery, Moore and Richmond counties.
The executive director and the chairman of the nonprofit's board said in a May 27 letter to the state auditor that the agency does not feel that it should have to repay the money.
"Our internal controls and procedures have always been strong," the two officials say in the letter. "Financial duties were delegated to the appropriate staff persons and we were under the impression that the duties were being carried out in accordance with procedures."
Nezzie M. Smith, executive director of the community action program, did not respond to an e-mail sent Wednesday morning.
The review states that between August 2007 and March 2008, the community action program's board of directors did not oversee the nonprofit, as it was charged with doing.
In the review, the auditor's office said some gas purchases and travel expenses were not documented with receipts or travel logs. Employees also submitted expenses for holidays, weekends and when they were taking a sick day or were on vacation, the review states.
Monthly financial reports on the grants that were supposed to be filed with Health and Human Services were late, according to the auditor's office.
"That is a red flag for us," said Mears.
The late reports caused Health and Human Services to categorize Sandhills Community Action Program as high risk in 2007. That designation was removed when reports were filed on time.
The community action program's finance manager experienced several personal issues that contributed to the poor documentation, the nonprofit's officials said in their letter. That finance director has resigned and a new person has been hired, the letter said.
"In regard to gas charges incurred on weekend days and/or when the employee was on sick or vacation leave, these individuals have been reprimanded and have been required to reimburse the charges incurred," the letter said.
New internal auditing procedures and training sessions on proper documentation have been implemented, the letter said.
Receipts, letters and canceled checks were also gathered to document some of the questioned expenditures.
Lori Walston, a spokeswoman for Health and Human Services, said officials will review the auditor's report and will recoup any necessary money.
In fiscal 2006, the agency received $725,910 in Health and Human Services grants. Another $983,695 was awarded in fiscal 2007.
A seven-month grant review conducted by the Office of the State Auditor questions nearly $35,000 in travel expenses and another $64,000 in unallowable expenses by the Sandhills Community Action Program Inc. The Department of Health and Human Services awarded Sandhills Community Action grants to help low-income people find housing, weatherize homes and repair or replace heating and air-conditioning units.
Jun. 12--RALEIGH -- Employees of a Carthage-based nonprofit organization appear to have filled up their gas tanks while sick and on vacation, then billed state grants created to help needy families, according to the state auditor.
A seven-month grant review conducted by the Office of the State Auditor questions nearly $35,000 in travel expenses and another $64,000 in unallowable expenses by the Sandhills Community Action Program Inc.
The Department of Health and Human Services awarded Sandhills Community Action grants to help low-income people find housing, weatherize homes and repair or replace heating and air-conditioning units. The review calls for the department to ask to be reimbursed for the misappropriated funds.
"We are not actually saying there is anything criminal," said Chris Mears, a spokesman for the auditor's office.
Sandhills Community Action Program provides housing, home repair and food for low-income families in Anson, Montgomery, Moore and Richmond counties.
The executive director and the chairman of the nonprofit's board said in a May 27 letter to the state auditor that the agency does not feel that it should have to repay the money.
"Our internal controls and procedures have always been strong," the two officials say in the letter. "Financial duties were delegated to the appropriate staff persons and we were under the impression that the duties were being carried out in accordance with procedures."
Nezzie M. Smith, executive director of the community action program, did not respond to an e-mail sent Wednesday morning.
The review states that between August 2007 and March 2008, the community action program's board of directors did not oversee the nonprofit, as it was charged with doing.
In the review, the auditor's office said some gas purchases and travel expenses were not documented with receipts or travel logs. Employees also submitted expenses for holidays, weekends and when they were taking a sick day or were on vacation, the review states.
Monthly financial reports on the grants that were supposed to be filed with Health and Human Services were late, according to the auditor's office.
"That is a red flag for us," said Mears.
The late reports caused Health and Human Services to categorize Sandhills Community Action Program as high risk in 2007. That designation was removed when reports were filed on time.
The community action program's finance manager experienced several personal issues that contributed to the poor documentation, the nonprofit's officials said in their letter. That finance director has resigned and a new person has been hired, the letter said.
"In regard to gas charges incurred on weekend days and/or when the employee was on sick or vacation leave, these individuals have been reprimanded and have been required to reimburse the charges incurred," the letter said.
New internal auditing procedures and training sessions on proper documentation have been implemented, the letter said.
Receipts, letters and canceled checks were also gathered to document some of the questioned expenditures.
Lori Walston, a spokeswoman for Health and Human Services, said officials will review the auditor's report and will recoup any necessary money.
In fiscal 2006, the agency received $725,910 in Health and Human Services grants. Another $983,695 was awarded in fiscal 2007.
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