Financial Administration of Community Action Programs in Little Rock

Published by the Government Accountability Office on 1971-07-16.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                          D/XL     AS REG IQNAL            OFFICE
                          ROOM     500   1912   COMMERCE     STRKEZT

                                 DALLAS,        TEXAS      75201

                                                                       July   16, 1971

Mr James W Griffith
DIrector, Southwest Region
OPflce of Economic Opportunity
1100 Commerce Street
Dallas, Texas 75202

Dear Mr. Griffith:

      The General Accounting Office has made a review of selected
aspects of Office of Economic Opportunity     (OEO) funded programs
carrxed out by the Economic Opportunity    Agency of Pulaski County,
Inc. (COA), Little  Rock, Arkansas     Our review was conducted pur-
suant to the Budget and Accounting Act of 1921 (31 U.S.C. 531, and
the Accounting and Auditing   Act of 1950 (31 U.S.C. 67).

        Our audit effort     was directed    principally       toward an evaluation
of j-he financial      admlnsstration     of OEO funded programs for the year
ended August 31, 1970, with particular              emphasis on control         over the
disbursement      of grant funds, accounting         for non-expendable        property,
and the valuation       of in-kind    (non-Federal)      contributions       to total
program cost.       The review was limIted        generally      to those actlvitles
directly    administered     by the EOA and , except for certain             evaluation
work performed      in connection     wrth the grantee's         non-Federal     contra-
button, did not include delegate agency operations                     Due considera-
tion was given during our examination             to current OEO regulations
and directives,       and to prior audit reports
      Our review showed that the grantee's              method of accounting        for
and its control     over the disbursement           of Federal grant monies was
generally   adequate.       Minor questions raised in this review area
were satisfactorily       resolved     during the course of our examination.
In other areas of our review,           however, two questionable         matters
were noted which we believe warrant your attention.                   These are*
(1) the inadequate      identification        and control    of non-expendable        prop-
erty acquired both by donation and with Federal grant funds, and
(2) excessive rental values being claimed for certain                   donated bulld-
rng space in meeting non-Federal             share requirements      of the program,
as evidenced by appraisals           of these properties      provided    at our request
by the General Services Adminxstratlon                 These matters were dlscussed
in depth with the LOA Executive            Director    at the conclusion      of our
review in December 1970 and, In both instances,                corrective     action was

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either indicated     or had been initiated      at that   time.    These actions
   --   A complete physlcal       Inventory     of all non-expendable
        property.      In conJunctlon     with the physlcal     inventory,
        all controllable      property was to be assigned identlfi-
        cation numbers and property          record cards were to be
        created ln accordance with the provisions            of Volume V,
        CAP Grantee Financial        Policy and Procedures Guide
        Initial   efforts   to this end had commenced at the close
        of our review.
        The obtalnlng     of an independent    appraisal of donated
        bullding    space as a means of establishing     its fair
        market rental value        Contact with the EOA Executive
        Director    subsequent to our review showed that this
        action had been accomplished and that appropriate
        adjustments    to in-kind   rental  claims were in process.

       Whrle it appears that efforts    undertaken by the grantee,     if
implemented as indicated,      will adequately    correct the weaknesses
noted during our review, we are bringing        these matters to your atten-
tlon for informational     purposes, and for possible considerat3on       zn
future   fundmg decisions.      We plan no addltional     reporting as a result
of this review,
      We wish to acknowledge       the courtesy and excellent   coopevatlon
extended our representatives         by EOA personnel during the review.

                                          Slncerely   yours,