City Controller Alan Butkovitz says the city's Department of Human Services has some record-keeping flaws, with $81 million going to a variety of grant recipients without required audit reports. The report included an examination of spending that spans the Street and Nutter administrations.
Here is the press release:
PHILADELPHIA – City Controller Alan Butkovitz today released the FY06-09 Department of Human Services (DHS) audit that found $81 million in government grants were paid to 11 DHS subrecipients without the department obtaining required audit reports.
For fiscal years 2006 through 2008, DHS did not obtain 13 audit reports due from its subrecipients who were provided with federal, state and city grant funds. The largest amount of grant money was provided in FY08 that resulted in $65 million in payments to six subrecipients; $52 million from the state and $13 million from the city.
“Failure to obtain the required audit reports for grants put millions of taxpayers’ dollars at risk,” said Butkovitz. “It could jeopardize the ability to receive future grants. It also puts the city at risk that the grantor agency could demand a refund.”
DHS management informed the Controller’s auditors that it did receive three of the 13 reports from its subrecipients, but the reports were received between 13 and 22 months after the city’s fiscal year end. By contract, subrecipient reports are due within 120 days of the city’s fiscal year end.
“When a city department fails to obtain audit reports on time, it undermines the city’s ability to meet its reporting obligations,” said Butkovitz. “The department must obtain all audit reports from its subrecipients on time and ensure the accuracy of the provided financial statements.
“If DHS does not take immediate corrective action, I will initiate the process for withholding future payments to subrecipients who do not provide audit reports.”
Along with DHS not obtaining subrecipients’ audit reports, the Controller’s audit also found there was no asset list created for the inventory left behind at the City’s Youth Study Center when it moved to a new location in October 2008. Youth Services staff performed its own physical inventory using internal records instead of obtaining a current list from the Procurement Department.
“A complete listing of these assets was never prepared and no one at DHS or Procurement knew what happened to the items left behind,” said Butkovitz. “Procurement was not informed that the assets were left behind, and consequently, Procurement’s inventory listing was not updated to reflect termination of custody. Since there was no listing prepared, the value of the property left behind could not be determined.”
Some of the other findings from the audit include:
-While considerable progress has been made with the Community-Based Prevention Services petty cash, the fund needs to be reconciled monthly and reconciliations need to be dated.
-Nearly one-third of the assets listed on the DHS property inventory did not exist, with 42 percent of its computer equipment no longer in the department’s custody.
-The department is in process of acting on a previous Controller’s recommendation to fix the one-month backlog in the ledgers parental support payments.
To view the FY06-09 Department of Human Services audit as well as other audits and reports released by the City Controller’s Office, please visit www.philadelphiacontroller.org.
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