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OFFICE OF THE DISTRICT OF
COLUMBIA AUDITOR
717 14TH STREET, N.W., SUITE 900
WASHINGTON, D.C. 20005
TEL. 202-727-3600, FAX 202-724-8814
Deborah K. Nichols
Interim District of Columbia Auditor
004-99-DC
Audit of Advisory Neighborhood Commission 8A for the Period 10/01/94
through 09/30/90
January 27, 1999
EXECUTIVE SUMMARY
PURPOSE
Pursuant to D.C. Code. Section 1-264(d). the Office of the District of
Columbia Auditor conducted an audit of the financial operations and activities of Advisory
Neighborhood Commission (ANC) 8A.
The objective of this audit was to determine whether ANC 8A's financial
accounts and operations were in compliance with the Advisory Neighborhood Commission Act
of 1975 ( ANC law). as amended. Financial Guidelines and Procedures issued by the Office
of the District of Columbia Auditor. and legal opinions issued by the Office of the
Corporation Counsel.
CONCLUSION
The financial accounts and operations of ANC 8A were not in substantial
compliance with the ANC law. guidelines issued by the Office of the District of Columbia
Auditor. and legal opinions issued by the Office of the Corporation Counsel. The Auditor
found deficiencies in ANC 8A s internal accounting controls and a leek of accountability
for ANC 8A's appropriated funds that resulted in unauthorized and unsupported
expenditures.
The Auditor found that ANC 8As officers had: (1) not filed I 5
required quarterly financial reports with the Office of the D.C. Auditor since April 1,
1995; (2) improperly disbursed a total of $4.712.00 in ANC funds for undocumented salary
payments to its chairman/administrative officer on checks signed by only one ANC officer;
(3) disbursed an additional $25,540.16. including $687.78 in long distance calls, and
$924.28 in purchases from a supermarket that lacked adequate supporting documentation and
had not been approved or ratified by a majority of ANC 8A commissioners. The Auditor also
found that ANC 8A s treasurer failed to obtain a cash or surety bond. and. as an
alternative. the ANC failed to participate in the Advisory Neighborhood Commission
Security Fund during calendar years 1996. 1997. and 1998.
As a result of the findings made during the audit, the Auditor
recommends further investigation by the Office of the Inspector General of the $4,712.00
in payments to ANC 8A's chairman/administrative officer, $687.78 in long distance
telephone calls, and $924.28 in purchases from a supermarket. The Auditor also recommends
the continued suspension of District funds to ANC 8A until it files all delinquent
quarterly financial reports with the Office of the District of Columbia Auditor.
MAJOR FINDINGS
ANC 8A failed to file 15 quarterly financial reports with the Office of
the District of Columbia Auditor.
ANC 8A improperly issued $4,712.00 in checks with only one signature for
personal service expenditures that were not supported by adequate documentation.
ANC 8A disbursed an additional $25,540.16 that lacked adequate
supporting documentation.
ANC 8A failed to adopt guidelines for the consideration and award of
grants.
ANC 8A failed to bond its treasurer for calendar years 1996, 1997, and
1998.
RECOMMENDATIONS
ANC 8A promptly file all outstanding quarterly financial reports with
the Office of the District of Columbia Auditor. All reports must be approved by a majority
of ANC 8A commissioners and must be accompanied by supporting documentation, including
canceled checks, bank statements, invoices, receipts, grant request letters, and approved
minutes.
ANC 8A officers refrain from issuing ANC checks containing only one
signature in violation of D.C. Code, Section 1-264(f).
ANC 8A maintain adequate documentation to support all expenditures,
especially those for personal services and salary payments.
The Office of the Inspector General investigate the $4,712.00 in
payments made to ANC 8A's chairman/administrative officer.
The Office of the Chief Financial Officer deduct $4,792.79 from ANC 8A's
next quarterly allotment.
ANC 8A maintain adequate documentation, such as original invoices,
receipts, contracts, minutes, and other supporting documentation in the files of the ANC's
office.
The Office of the Inspector General investigate $924.28 in purchases
from a supermarket and $687.78 in long distance calls made from the ANC's telephone in
that they appear to be personal in nature.
The Office of the Chief Financial Officer deduct an additional $25,540.
l 6 from ANC 8A s next quarterly allotment.
ANC 8A commissioners adopt guidelines for the consideration and award of
grants in accordance with D.C. Code, Section 1-264(m). The guidelines must include a
provision requiring the proposed grantee to present the request for a grant at a public
meeting of the ANC. Until grant guidelines are adopted and implemented by ANC 8A, all
grant disbursements will be disallowed by the Office of the Auditor.
ANC 8A must ensure that its treasurer is properly bonded before
disbursing any ANC funds.
Back to top of page
OFFICE OF THE DISTRICT OF COLUMBIA AUDITOR
717 14TH STREET, N.W., SUITE 900
WASHINGTON, D.C. 20005
TEL. 202-727-3600, FAX 202-724-8814
Deborah K. Nichols
Interim District of Columbia Auditor
David J. White, Chairman
Advisory Neighborhood Commission 8A
2627A - Martin Luther King Ave., S.E.
Washington, D.C. 20032
Letter Report: Audit of Advisory Neighborhood Commission 8A For the Period
10/01/94 Through 9/30/98
Dear Commissioner White:
Pursuant to D.C. Code, Section 1-264(d), the Office of the District of
Columbia Auditor conducted an audit of the financial operations and activities of Advisory
Neighborhood Commission (ANC) 8A.
The objective of this audit was to determine whether ANC 8A's financial
accounts and operations were in compliance with the Advisory Neighborhood Commission Act
of 1975 (ANC law), as amended, Financial Guidelines and Procedures issued by the Office of
the District of Columbia Auditor, and legal opinions issued by the Office of the
Corporation Counsel.
The audit covered the period October 1, 1994 through September 30,
1998. The Auditor reviewed ANC 8A's canceled checks, bank statements, bank signature
cards, quarterly financial reports, meeting minutes that were available for the audit,
invoices, and other related documents. The Auditor also interviewed ANC 8A's chairman,
treasurer, and other ANC 8A commissioners.
Advisory Neighborhood Commission (ANC) 8A is composed of seven (7)
single member districts (SMD). All single member districts were occupied by elected
commissioners during the audit period.
The audit was conducted in accordance with generally accepted
governmental auditing standards and included such tests of the records as were deemed
necessary under the circumstances.
FINDINGS
ANC 8A DID NOT EXPEND ANY FUNDS BETWEEN MAY 20, 1996 AND SEPTEMBER 30.
1998
During the twenty-eight (28) month period of May 20, 1996 and September
30, 1998. Advisory Neighborhood Commission 8A did not expend any ANC funds. The last check
written on ANC 8A's checking account was check number 1254, dated May 15, 1996, for $40
which cleared the bank on May 20, 1996. ANC 8A commissioners did not make any deposits or
write any checks on the ANC's checking account after May 15,1996. As of May 31,1996, the
ending balance on ANC 8A's checking account was $96.32. Between June 1, 1996 and May 31,
1997, the $96.32 balance was consumed by bank service charges On June 13, 1997, the bank
closed ANC 8A's checking account, which had a negative balance of $15.87 as a result of
monthly bank service charges.
ANC 8A received its last two quarterly allotments from the District on
July 19, 1995 in the amount of $ 12,274.10 and on July 25, 1995 in the amount of $
1,061.71, for a total of $ 13,335.81. Since July 25, 1995, ANC 8A has not received any
additional District allotments.
ANC 8A FAILED TO FILE 15 QUARTERLY FINANCIAL REPORTS WITH THE
OFFICE OF THE DISTRICT OF COLUMBIA AUDITOR
Advisory Neighborhood Commission 8A violated D.C. Code, Section
1-264(j) by failing to file 15 quarterly reports of financial activity with the Office of
the District of Columbia Auditor for the period April 1, 1995 through September 30, 1998.
D.C. Code, Section 1-264(j), as amended, states that:
"The treasurer of a Commission shall prepare a quarterly financial
report on a form provided by the Auditor. The financial report shall be presented to the
Commission for its consideration at a public meeting of the Commission within 45 days of
the end of the quarter. A copy of the approved financial report, signed by the Chairman,
the secretary and the treasurer, shall be filed, with a record of the vote adopting the
report, with the Auditor within 7 days of approval. The Commission shall make available
for on-site review to the Auditor, upon the Auditor's request, originals of documents
required to be submitted with quarterly financial reports pursuant to this section. Each
quarterly financial report must include copies of canceled checks, bank statements,
invoices and receipts, grant request letters, executed contracts, and the minutes
indicating the Commission's approval of disbursements reported in the quarterly report....
No quarterly allotment shall be forwarded to a Commission until all reports of financial
activity for the quarters preceding the immediate previous quarter are approved by the
Auditor."
The last quarterly financial report filed by ANC 8A covered the period
January 1, 1995 through March 31, 1995. As a result of ANC 8A's failure to file timely
quarterly financial reports for the period April 1, 1995 through September 30, 1998, the
District government has withheld approximately $40,559.73 of ANC 8A's quarterly
allotments. ANC 8A lost approximately $27,119.73 of this amount when the Council of the
District of Columbia enacted the "Advisory Neighborhood Commissions Management
Control and Funding Emergency Amendment Act of 1998", which states, in relevant part,
that:
". . . On the effective date of the Advisory Neighborhood
Commissions Management Control and Funding Emergency Amendment Act of 1998, the Chief
Financial Officer shall reallocate any quarterly allotments that are held in reserve for
Commissions for any period through the end of fiscal year 1997. The funds shall be used to
provide fiscal year 1999 allotments to each Commission, consistent with section 738(e) of
the District of Columbia Home Rule Act . . ."
RECOMMENDATION
ANC 8A promptly file all outstanding quarterly financial reports with
the Office of the District of Columbia Auditor. All reports must be approved by a majority
of ANC 8A commissioners and must be accompanied by supporting documentation, including
canceled checks, bank statements, invoices, receipts, grant request letters, and approved
minutes.
ANC 8A IMPROPERLY ISSUED CHECKS WITH ONLY ONE SIGNATURE FOR
PERSONAL SERVICE EXPENDITURES THAT WERE INADEQUATELY DOCUMENTED
Table I presents a list of thirty-one (31) ANC 8A checks totaling
$4,792.79 which were improperly issued with only the signature of ANC 8A's vice-chairman,
Commissioner Lewis C. Ecker, or its treasurer, Commissioner Dorothea Ferrell. Issuing ANC
checks with only one signature, which in most cases was not the signature of the chairman
or treasurer as required by the ANC law, violated D.C. Code, Section 1-264(f) which
states, in relevant part, that:
". . . Any expenditure made by check shall be signed by at least two officers of
the Commission, one of whom shall be the treasurer or chairman . . . " (Auditor's
Emphasis)
Thirty (30) of the thirty-one (31) disbursements, totaling $4,712.00,
were made payable to ANC 8A's Chairman, David J. White. ANC 8A commissioners elected Mr.
White as Chairman on January 9, 1995. The ANC then hired Commissioner White as ANC 8A's
administrative officer on March 13, 1995. The payments were made to Mr. White between
October 1 1, 1994 and May I 5 1996. Supporting documentation, such as certified time and
attendance records reflecting the number of hours worked by Commissioner White as the
ANC's administrative officer, the hourly or daily rate of compensation, and the
Commission's approval of the payments were not made available for the Auditor's review.
Further, there were no records indicating that the appropriate federal and District taxes
were withheld from wage payments made to Commissioner White.
ANC Financial Guidelines and Procedures issued by the Office of the
D.C. Auditor state that: (i) a payroll register must be maintained to record all paychecks
issued to employees; and (ii) federal and District of Columbia income taxes and social
security taxes are required to be withheld from all salary payments to employees for
services performed. Neither the chairman nor the treasurer could provide any records
supporting these payments for the Auditor's review.
As a result of the deficiencies noted herein, the Auditor will
recommend disallowance of $4,792.79 from ANC 8A's next quarterly allotment.
TABLE I
Checks Signed by Only One Commissioner During the Period October
11, 1994 through May 15, 1996
Check Number |
Date on Check |
Check Made Payable To |
Amount of Check |
Purpose of the Payment |
ANC Official Who Signed Check |
955 |
10/11/94 |
David J. White |
441.00 |
Salary |
Vice-Chairman |
957 |
10/18/94 |
David J. White |
30.00 |
Mileage/Per Diem |
Vice-Chairman |
964 |
11/08/94 |
David J. White |
441.00 |
Salary |
Vice-Chairman |
1103 |
11/14/94 |
David J. White |
60.00 |
Mileage |
Vice-Chairman |
1132 |
02/28/95 |
D.C. Cable |
80.79 |
Cable Service |
Vice-Chairman |
1177 |
08/15/95 |
David J. White |
300.00 |
Stipend |
Vice-Chairman |
1186 |
09/13/95 |
David J. White |
300.00 |
Stipend |
Vice-Chairman |
1188 |
09/15/95 |
David J. White |
300.00 |
Emergency Stipend |
Vice-Chairman |
1202 |
10/24/95 |
David J. White |
200.00 |
Stipend |
Vice-Chairman |
1203 |
10/25/95 |
David J. White |
150.00 |
Emergency Stipend |
Treasurer |
1204 |
10/30/95 |
David J. White |
150.00 |
Emergency Stipend |
Vice-Chairman |
1209 |
11/09/95 |
David J. White |
300.00 |
Stipend |
Vice-Chairman |
1212 |
11/30/95 |
David J. White |
100.00 |
Stipend |
Vice-Chairman |
1215 |
12/07/95 |
David J. White |
200.00 |
Stipend |
Vice-Chairman |
1218 |
12/13/95 |
David J. White |
100.00 |
Stipend |
Vice-Chairman |
1219 |
12/18/95 |
David J. White |
100.00 |
Emergency Stipend |
Treasurer |
1220 |
12/19/95 |
David J. White |
100.00 |
Stipend |
Vice-Chairman |
1221 |
01/17/96 |
David J. White |
300.00 |
Stipend |
Vice-Chairman |
1228 |
01/24/96 |
David J. White |
100.00 |
Partial Stipend |
Vice-Chairman |
1229 |
01/24/95 [sic] |
David J. White |
60.00 |
Partial Stipend |
Vice-Chairman |
1230 |
01/24/95 [sic] |
David J. White |
40.00 |
Partial Stipend |
Vice-Chairman |
1233 |
01/26/96 |
David J. White |
100.00 |
Emergency Stipend |
Vice-Chairman |
1236 |
02/08/96 |
David J. White |
100.00 |
Partial Stipend |
Vice-Chairman |
1243 |
02/20/96 |
David J. White |
100.00 |
Partial Stipend |
Vice-Chairman |
1244 |
02/20/96 |
David J. White |
100.00 |
Partial Stipend |
Vice-Chairman |
1245 |
02/23/96 |
David J. White |
50.00 |
Partial Stipend |
Vice-Chairman |
1247 |
02/27/96 |
David J. White |
50.00 |
Stipend |
Vice-Chairman |
1250 |
03/12/96 |
David J. White |
300.00 |
Stipend |
Treasurer |
1252 |
04/17/96 |
David J. White |
60.00 |
Partial Stipend |
Treasurer |
1253 |
05/13/96 |
David J. White |
40.00 |
Partial Stipend |
Treasurer |
1254 |
05/15/96 |
David J. White |
40.00 |
Partial Stipend |
Vice-Chairman |
TOTAL |
|
|
$4,792.79 |
|
|
Source: ANC 8A files, checkbook register, and bank records.
RECOMMENDATIONS
ANC 8A officers refrain from issuing ANC checks containing only one
signature in violation of D.C. Code, Section 1-264(f).
ANC 8A maintain adequate documentation to support all expenditures
especially those for personal services and salary payments.
The Office of the Inspector General investigate the $4,712.00 in
payments made to ANC 8A's Chairman/administrative officer.
The Office of the Chief Financial Officer deduct $4,792.79 from ANC 8A's
next quarterly allotment.
ANC 8A DISBURSEMENTS TOTALING $25.540.16 LACKED ADEQUATE
DOCUMENTATION
ANC 8A was not in compliance with ANC Financial Guidelines and
Procedures issued by the Office of the District of Columbia Auditor which, in relevant
part, state:
"Prior to disbursing funds, the Treasurer must ensure that a
voucher package is prepared which contains the following:
An original invoice or receipt from the supplier of goods and services.
A signed statement must be attached to the invoice or written on the
invoice by the ANC representative who receives the goods or services which states:
"I certify that the goods or services described on the attached invoice have been
received and represent bona fide expenses of the ANC."
The date paid and check number must be entered on the original invoice.
All vouchers must be filed in check number sequence.
All voucher packages must be retained for a period of at least seven
years."
ANC 8A officers and its administrative officer could not provide the
Auditor with adequate documentation to support disbursements totaling $25,540.16 as
presented in Appendix I. The Auditor also found that a majority of canceled checks and
bank statements supporting the disbursements were not available in the ANC's office files.
In order to conduct a thorough audit of ANC 8A's financial activity, the Auditor requested
sixteen (16) months of canceled checks and bank statements from the bank where the ANC
maintained its checking account. Further, the only minutes made available for the audit
period were for six meetings held between October 1, 1994 and March 31, 1995. The Auditor
could not find any other minutes for meetings conducted by ANC 8A during the audit period.
The minutes that were available did not contain the commissioner's discussion or approval
of the treasurer's report of expenditures or their approval of the disbursements listed in
Appendix I. Again, minutes were not available to support the ANC's approval of
expenditures which occurred between April 1,1995 and May 31,1996. In the absence of
supporting documentation and minutes reflecting the approval of expenditures by a majority
of ANC 8A commissioners, the disbursements presented in Appendix I violated D.C. Code,
Section 1-264(f) which states, in relevant part, that:
". . . No expenditure of any amount shall be made without the
specific authorization of the Commission."
As a consequence, the $25,540.16 in disbursements presented in Appendix
I will be deducted from ANC 8A's next quarterly allotment. Appendix I presents check
numbers, the date of each disbursement, the amount of each check, the payee for each
check, the purpose for each payment, and the type of documentation, if any, in support of
each disbursement.
Notwithstanding the inadequacy of supporting documentation and lack of
Commission approval for the disbursements, the Auditor is further concerned with the
quality of certain expenditures which appeared not to support the statutory mission of the
ANC or were not an appropriate use of appropriated funds. For example, the Auditor found
that over a two-year period $687.78 in long distance calls were made from the ANC's
telephone. Although requested, the detailed phone records were not made available for the
Auditor's review. Given the local nature of the ANC's mission, the $687.78 in long
distance calls and related charges appear to be personal in nature. This matter will be
referred to the Office of the Inspector General for further investigation.
Another example is the $68.50 disbursement for flowers. This
expenditure did not support a purpose that benefited the ANC 8A community in general.
Other examples included $924.28 in checks written to Safeway, a supermarket, for
"office supplies," and $6,565.98 in checks written to the ANC's administrative
officer during a period in which the ANC frequently did not meet, the ANC office did not
function, quarterly financial reports were not prepared and submitted to the Office of the
Auditor, and the ANC's records were negligently maintained.
RECOMMENDATIONS
ANC 8A maintain adequate documentation, such as original invoices,
receipts, contracts, minutes, and other supporting documentation in the files of the ANC's
office.
The Office of the Inspector General investigate the $924.28 in checks
written to Safeway for "office supplies" and the $687.78 in long distance calls
which appear to be personal in nature.
The Office of the Chief Financial Officer deduct $25.540.16 from ANC 8A
s next quarterly allotment.
ANC 8A FAILED TO ADOPT GUIDELINES FOR THE CONSIDERATION AND AWARD
OF GRANTS
Advisory Neighborhood Commission 8A violated the ANC law by not adopting
guidelines for the consideration and award of grants. Specifically, D.C. Code, Section
1-264(m) states:
"A Commission shall adopt guidelines for the consideration and award
of grants that shall include a provision that requires the proposed grantee to present the
request for a grant at a public meeting of the Commission. . ."
At a March 13, 1995 public meeting of ANC 8A, a quorum of six
commissioners voted to award a $175 grant to Inner Thoughts. The March 13th ANC 8A minutes
did not reflect the presence of a representative from this organization to present the
grant request to the Commission. There was no grant request letter in the files of the ANC
for the Auditor's review. Further. the minutes did not indicate the purpose or intended
use of the $175 grant to Inner Thoughts. The canceled check was the only documentation
available to the Auditor in support of this disbursement. Absent a "grantee
request" letter, the Auditor could not determine the public purpose nature of the $
175 grant, or the basis for the ANC's consideration and award of the grant.
ANC 8A's chairman and treasurer could not provide grant award
guidelines used by the ANC to consider and award this or any other grant. As a result, the
Auditor could not discern how grantees were selected, how grant amounts were determined,
or specific public purposes considered worthy of grant awards. By letter dated May 2,
1994, the District of Columbia Auditor informed all ANC's that:
"ANC's will be required to attach a copy of the grant request
letter or proposal to support all grant expenditures which have been voted on by the
Commission at a public meeting.... Failure to comply with the revised procedures will
result in this office recommending disallowance of grant expenditures not supported by the
appropriate documentation."
RECOMMENDATION
ANC 8A commissioners adopt guidelines for the consideration and award
of grants in accordance with D.C. Code, Section 1-264(m). The guidelines must include a
provision requiring the proposed grantee to present the request for a grant at a public
meeting of the ANC. Until grant guidelines are adopted and implemented by ANC 8A all grant
disbursements will be disallowed by the Office the Auditor.
ANC 8A FAILED TO BOND ITS TREASURER FOR CALENDAR YEARS 1996, 1997. AND
1998
Advisory Neighborhood Commission 8A violated D.C. Code, Section 1 -264(c)
by failing to submit to the Office of the D.C. Auditor a cash or surety bond for its
treasurer or, as an alternative, paying the annual $30.00 fee for the ANC to participate
in the ANC Security Fund during calendar years 1996, 1997, and 1998. D.C. Code, Section
1-264(c) states, in relevant part, that:
"The treasurer of each Commission shall file with the Office of the
District of Columbia Auditor, within 30 days . . .a cash or surety bond in an amount and
on a form satisfactory to the Auditor. . . No expenditure shall be made by a Commission
during a vacancy in the office of treasurer or at any time when a current and accurate
statement and bond or its equivalent are not on file with the District of Columbia
Auditor."
The Auditor observed that during calendar year 1996, ANC 8A officials
improperly disbursed $3,410.21 without bonding its treasurer or participating in the
Advisory Neighborhood Commission Security Fund as required under D.C. Code, Section
1-264(c). ANC 8A did not expend any funds during calendar years 1997 and 1998. If not
already recommended for disallowance, the Auditor will recommend that the Office of the
Chief Financial Officer deduct the $3,410.21 in disbursements made during the period of
non-compliance from the ANC's next quarterly allotment.
RECOMMENDATION
ANC 8A must ensure that its treasurer is properly bonded or that the
ANC participates in the ANC Security Fund before disbursing any ANC funds.
CONCLUSION
The financial accounts and operations of ANC 8A were not in substantial
compliance with the ANC law, guidelines issued by the Office of the District of Columbia
Auditor. and legal opinions issued by the Office of the Corporation Counsel The Auditor
found deficiencies in ANC 8A's internal accounting controls and a lack of accountability
for ANC 8A s appropriated funds that resulted in unauthorized and unsupported
expenditures.
The Auditor found that ANC 8A's officers had: (1) not filed 15 required
quarterly financial reports with the Office of the D.C Auditor since April 1, 1995; (2)
improperly disbursed a total of $4,712.00 in ANC funds for undocumented salary payments to
its chairman/administrative officer on checks signed by only one ANC officer; (3)
disbursed an additional $25,540.16, including $687.78 in long distance calls, and $924.28
in purchases from a supermarket that lacked adequate supporting documentation and had not
been approved or ratified by a majority of ANC 8A commissioners. The Auditor also found
that ANC 8A's treasurer failed to obtain a cash or surety bond, and, as an alternative,
the ANC failed to participate in the Advisory Neighborhood Commission Security Fund during
calendar years 1996, 1997, and 1998.
As a result of the findings made during the audit, the Auditor
recommends further investigation by the Office of the Inspector General of the $4,712.00
in payments to ANC 8A's chairman/administrative officer $687.78 in long distance telephone
calls, and $924.28 in purchases from a supermarket. The Auditor also recommends the
continued suspension of District funds to ANC 8A until it files all delinquent quarterly
financial reports with the Office of the District of Columbia Auditor.
Respectfully submitted,
Deborah K. Nichols,
Interim District of Columbia Auditor
Appendix I: Advisory Neighborhood Commission 8A Record of Financial
Expenditures for the Twenty-two Months Beginning October 1994 through May 1996.
[This is a chart of all checks written during this period. It is not
available on-line.] |