Audit 310671

Condition: After year end, the Association became aware that the former TSTP grant manager performed unapproved out of state trainings. These activities were concealed from the Association in part by submitting timesheets showing grant-related activities when unallowed activities were performed. Criteria: All out of state travel is required to have prior written approval from the OHSP Division Director at the grant administrator level as well as be approved by the Association’s Executive Director or Assistant Executive Director. Cause: The former grant director was entrusted with considerable discretion and authority and broke his fiduciary duty to act in the best interests of the Association. Effect: The unapproved out of state travel performed by the former TSTP grant manager resulted in unallowable expenses that were reimbursed by the federal grant. The Association conducted an extensive investigation to determine the extent of unallowable expenses. The results of that analysis combined with the auditors’ examination of TSTP expenses indicate that the amount of unallowable expenses is immaterial to the financial statements as a whole, immaterial to the program, and below the threshold for reporting questioned costs. Auditor’s Recommendation: Procedures should be implemented that provide more oversight and accountability to grant directors and others whose position gives them a significant amount of deference and latitude in their role within the Association. Grantee Response: The Association took immediate action to notify the grant administrators when the condition was discovered, performed an investigation, and submitted a report to the grant administrators detailing their findings. As a result of these circumstances, the Association has made several updates to their policies including 1) regularly reviewing cell phone records to detect out of state calls within one month of their occurrence; 2) developing an approval form for out of state travel that must include proof of the grant administrators approval and a detailed agenda of the trip; 3) requiring that expense reimbursement forms include travel dates and times as well as the event that the travel is related to; 4) crosschecking the shared office Outlook calendar each payroll period to personal leave requested in the payroll system; and 5) attending monthly grant administrator meetings to facilitate communication and ensure that the Association is made aware of travel requests.

Condition: After year end, the Association became aware that the former TSTP grant manager performed unapproved out of state trainings. These activities were concealed from the Association in part by submitting timesheets showing grant-related activities when unallowed activities were performed. Criteria: All out of state travel is required to have prior written approval from the OHSP Division Director at the grant administrator level as well as be approved by the Association’s Executive Director or Assistant Executive Director. Cause: The former grant director was entrusted with considerable discretion and authority and broke his fiduciary duty to act in the best interests of the Association. Effect: The unapproved out of state travel performed by the former TSTP grant manager resulted in unallowable expenses that were reimbursed by the federal grant. The Association conducted an extensive investigation to determine the extent of unallowable expenses. The results of that analysis combined with the auditors’ examination of TSTP expenses indicate that the amount of unallowable expenses is immaterial to the financial statements as a whole, immaterial to the program, and below the threshold for reporting questioned costs. Auditor’s Recommendation: Procedures should be implemented that provide more oversight and accountability to grant directors and others whose position gives them a significant amount of deference and latitude in their role within the Association. Grantee Response: The Association took immediate action to notify the grant administrators when the condition was discovered, performed an investigation, and submitted a report to the grant administrators detailing their findings. As a result of these circumstances, the Association has made several updates to their policies including 1) regularly reviewing cell phone records to detect out of state calls within one month of their occurrence; 2) developing an approval form for out of state travel that must include proof of the grant administrators approval and a detailed agenda of the trip; 3) requiring that expense reimbursement forms include travel dates and times as well as the event that the travel is related to; 4) crosschecking the shared office Outlook calendar each payroll period to personal leave requested in the payroll system; and 5) attending monthly grant administrator meetings to facilitate communication and ensure that the Association is made aware of travel requests.