Created by the National and Community Service Trust Act of 1993, the Corporation provides opportunities for Americans to serve their communities through: Senior Corps, AmeriCorps, VISTA, National Civilian Community Corps and Learn and Serve America. The 1993 Act also established the Office of Inspector General, which conducts independent and objective audits and investigations of Corporation programs and operations to prevent and deter waste, fraud and abuse. It also recommends policies to Corporation management to promote economy and efficiency.
Each federal agency has an Office of Inspector General (OIG) that provides independent oversight of the agency’s programs and operations. The office is responsible for promoting efficiency and effectiveness in agency programs and for preventing and detecting fraud, waste, and abuse.
Seniors Council manages community service programs for senior citizens in Aptos, California. Seniors Council received grants of approximately $2 million from the Senior Companion Program (SCP) and the Foster Grandparents Program (FGP) between July 2013 and June 2015. Both programs are administered by the Corporation for National and Community Service (CNCS).
Following a site visit by the CNCS’s Office of Grants Management in June 2015, the Office of Inspector General (CNCS-OIG) was requested to perform an audit of the costs charged to these grants and of Senior Council’s financial management system.
CNCS-OIG audited the costs incurred by Seniors Council during this period and questioned $45,546 or approximately 2.3 percent of the $2 million in Federal costs charged on these grants. The questioned costs resulted from the grantee not performing required background checks for its volunteers prior to beginning service; and overstating its claimed expenditures by more than $10,000. Seniors Council also commingled funds for multiple grants and grant years, improperly drew down and misapplied Federal funds, overstated grant expenditures on Federal Financial Reports (FFRs), and did not fully complete background checks for its volunteers. Seniors Council had various compliance issues, including lack of budget-to-actual comparisons, an improper cost allocation methodology, unmet minimum volunteer service hours, and undocumented volunteers’ letter of agreements.
Our initial financial management findings required immediate CNCS attention; therefore, we issued a Management Alert to CNCS in July 2016. CNCS immediately adopted our recommendation to place a manual hold on further drawdowns until Seniors Council completed multiple corrective actions.
To address our audit findings, we recommend that CNCS disallow and recover all questioned
costs. To improve compliance, we also recommend that Seniors Council:
(1) improve its financial management system;
(2) strengthen its internal controls;
(3) perform timely reconciliations of its general ledger to FFRs and drawdowns;
(4) conduct supervisory reviews of the reconciliations periodically;
(5) follow its current policies and procedures for conducting criminal history checks; and
(6) revise its written policies and procedures for SCP and FGP.
Seniors Council generally agreed with most of the findings and recommendations. CNCS stated that it would respond to the final report after reviewing Seniors Council’s corrective action plan to ensure that corrective action adequately addressed all the audit findings and recommendations.