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Audit (A-01-10-02504)

02-28-2011
Results of Limited Scope Review at the Community Action Agency of New Haven, Inc.

Executive Summary

We reviewed the financial condition of the Community Action Agency of New Haven, Inc. (CAANH), 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 CAANH's current financial condition makes its financial viability uncertain. Significant operating deficiencies also existed at CAANH 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, CAANH did not ensure that (1) its subcontracts contained evidence of competitive bidding, a clear and accurate description of services, and services provided to eligible clients; (2) its payroll distribution process provided an after-the-fact certification of actual activity performed by salaried employees; (3) its CSBG Recovery Act quarterly financial reports were supported by accounting records; and (4) it properly accounted for equipment purchased with Federal funds. In addition, CAANH did not fully comply with Federal requirements for bank deposits and whistleblower protection. The deficiencies occurred because CAANH 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 CAANH establishes adequate controls and procedures to comply with Federal requirements. In addition, we recommend that CAANH make financial adjustments or produce adequate documentation for unallowable services, activities, and costs.

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