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Audit (A-01-10-02505)

05-09-2011
Results of Limited Scope Review at the CTE, Inc.

Executive Summary

We reviewed the financial condition of CTE, Inc. (CTE), 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 the most recent financial statements available (FY 2009), CTE's financial viability is uncertain. Significant operating deficiencies existed at CTE that impact its ability to manage and account for Federal funds and its capability to carry out the community Services Block Grant (CSBG) Recovery Act program in compliance with Federal requirements. Specifically, CTE did not ensure that (1) its payroll distribution process provided an after-the-fact certification of actual activity performed by salaried employees, (2) it only charged allowable costs to the grant, (3) it filed timely CSBG Recovery Act quarterly financial reports, (4) it properly accounted for equipment purchased with Federal funds, (5) it complied with Federal requirements for whistleblower protection, and (6) it complied with Federal requirements for bank deposits. The deficiencies occurred because CTE 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 CTE establishes adequate controls and procedures to comply with Federal requirements. In addition, we recommended that CTE make financial adjustments or produce adequate documentation for unallowable services, activities, and costs.

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