NCJ Number
83562
Date Published
1981
Length
66 pages
Annotation
Major problems in controlling the use of Federal funds at selected community action agencies are identified, and recommendations are offered for eliminating the internal control weaknesses contributing to the problems.
Abstract
In 1979, the Federal Government provided an estimated $1.5 billion to 897 community action agencies to develop and conduct programs to aid the poor and eliminate poverty. At the 12 community action agencies reviewed, $11 million of such funds was mismanaged or misused. Problem areas were excessive cash balances, inadequate control over service corporations, duplicate reimbursement of expenses, and inadequate control over fixed assets. Weaknesses in internal controls contributed to these problems, because (1) cash was received before it was needed; (2) the Community Services Administration, prior to September 1980, had not issued any policy instructions that specifically addressed the relationship of community action agencies and their service corporations; (3) Federal agencies responsible for administering similar programs have not adequately coordinated their efforts and have not received reliable data on the amount and source of all their grantees' Federal reimbursements; and (4) Federal agencies have not enforced their requirements that grantees establish adequate property control systems. Federal grantmaking agencies must establish, revise, and enforce sound internal control policies and procedures, particularly in the areas of cash management, program cost reimbursements, and property management. The Community Service Administration must develop an overall policy governing the establishment of service corporations or similar organizations by community action agencies and their delegates and employees. Correspondence relating to this report is appended. (Author summary modified)