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Audit (A-01-10-02503)

04-07-2011
Results of Limited Scope Review at the Community Action Committee of Danbury, Inc.

Executive Summary

We reviewed the financial condition of the Community Action Committee of Danbury, Inc. (CACD), as part of a nationwide series of reviews of Community Action Agencies that have received funding under the American Recovery and Reinvestment Act of 2009.

Based on our assessment, we believe that CACD is currently financially viable. Significant operating deficiencies existed at CACD that impact its ability to manage and account for Federal funds and its capability to carry out Community Services Block Grant (CSBG) Recovery Act programs in compliance with Federal requirements. Specifically, CACD did not ensure that (1) direct capital expenditures were approved in advance; (2) its subcontract award contained evidence of competitive bidding, a description of services, and that services were provided to eligible clients; (3) its payroll distribution process provided an after-the-fact certification of actual activity performed by salaried employees; (4) professional services and occupancy costs allocated to the CSBG Recovery Act program were supported properly; and (5) its CSBG Recovery Act quarterly financial reports were supported by accounting records. In addition, CACD did not fully comply with Federal requirements for segregation of duties and bank deposits. The deficiencies occurred because CACD did not establish adequate controls and procedures. As a result, CSBG Recovery Act funds may be at risk of not being properly accounted for or expended in accordance with Federal requirements.

We recommended that the Administration for Children and Families work with Connecticut's Department of Social Services to ensure that CACD establishes adequate controls and procedures to comply with Federal requirements. In addition, we recommend that CACD make financial adjustments or produce adequate documentation for unallowable services, activities, and costs.

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