Review of Community Renewal Team, Inc. Compensation Practices for Executives and Teachers

EXECUTIVE SUMMARY:

The objective of our audit was to determine whether Community Renewal Team Inc.'s (CRT) compensation and related expenses for five key executives and teachers were reasonable and consistent with Federal requirements and guidelines.  We found that the teacher's compensation level was both reasonable and consistent with Federal requirements.  However, CRT did not complete a wage comparability study to support its executive compensation.  In this regard, three out of the five key executives exceeded the average rate of compensation paid to the Chief Executive Officers of Head Start agencies in Connecticut.  In addition, CRT did not provide written evidence that its Board of Directors followed established procedures in approving the CEO's compensation level.  Further, CRT did not maintain adequate documentation to show that $177,867 in travel, restaurant, and other credit card charges incurred by four of the executives and charged to an indirect expense account complied with Federal requirements.  We recommended that CRT establish and implement controls for executive compensation, as well as refund $57,483 in unallowable business related expenses allocated to Head Start and other Federal programs.  CRT generally concurred with our recommendations, however did not agree with the sources of information we used for the salary comparison.

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