D.C. Homeless Program Overcharged

By Fredrick Kunkle. Washington Post. March 6, 2015. “An auditor’s report on the District’s programs for the homeless found that its main contractor overbilled the city by more than $5.3 million last year, largely through the use of an accounting practice that appears to be a violation of city and federal law.”

“The review also found that the contractor, the nonprofit Community Partnership for the Prevention of Homelessness, had inadequately distinguished between programmatic and administrative costs, a key indicator of whether funds are spent efficiently.”

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Board members and credit cards

I love me some investigative journalism. NBC-4 in Washington, DC recently aired a story about Prince George’s County (Maryland) school board members misusing their district-issued credit cards for meals and personal expenses.

District board members are authorized to spend up to $7,000 annually for travel expenses; however, several board members used their credit cards for local meals-oftentimes before regularly scheduled board meetings. Read the story for complete details.

In my opinion, credit cards issued to board members (either for public bodies or private nonprofit organizations) is a bad practice. There’s too little control over the funds; it’s too easy for board members to justify-in their minds-that their expenses are legitimate; and it’s too difficult, not to mention awkward, to seek reimbursement when charges are disallowed. Typical organizational culture says one doesn’t question board members.

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Policies and procedures matter!

There was an interesting article online about a recent audit of the Charlotte Douglas International Airport. No fraud or deliberate mismanagement was uncovered by the auditors but they did find insufficient oversight of contracts, grants, procurement, etc. The interim aviation director, Brent Cagle, summed up the audit best by describing how it hurts the airport’s credibility, “it erodes confidence…and we need to restore that.”

One of the audit’s findings, though, blew me away:

There are no formal, documented policies and procedures at Charlotte Douglas for important functions such as project management, bidder selection on contracts, grant compliance reporting and change orders on contracts. McGladrey [the external auditor] said the lack of such written policies ‘increases risk of errors and omissions.'”

Shocking!

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Record keeping at LA Unified

Los Angeles Unified recently approved a plan to automatically destroy electronic mail after one year’s time. This has disaster written all over it.

The administration’s theory is that the district will save on the cost of storing the Email. Officials say only non-essential records will be destroyed. Email designated as “business records” will be retained. My concern is who will be responsible for making the essential vs non-essential determination. Without the proper knowledge or training, vital public records will be permanently lost. And, after the “lost” IRS Email scandal in DC, I would expect a governing body to err on the side of caution.

When it comes to record destruction, I prefer the old fashioned method of requiring individuals to hit the delete button and to shred paper files. If an issue arises later, there’s documentation of who destroyed the records. Accountability. What a concept. “Computer glitch” has become too convenient an excuse lately.

FWIW, federal grant program and financial records (including Email) need to be retained for three years after the date the final expenditure report is submitted to the federal funding agency. Save all your files. Don’t let the machines ruin your audit trail.

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