Audit Report on the Compliance of Wayside MacDonough Family Residence With Its Contract with the Department of Homeless Services
EXECUTIVE SUMMARY
On March 28, 1994, the Department of Homeless Services (DHS) entered into a contract with the Wayside Baptist Church (Wayside) to operate the Wayside MacDonough Family Residence (Residence) as transitional housing for displaced and homeless families referred by the DHS Emergency Assistance Unit. The contract, which totaled $2,718,480, ran from May 1, 1994, through April 30, 1999, and contained a four-year renewal option. The contract was amended in March 1999 so that its expiration date became June 30, 1999. DHS renewed the contract for the period July 1, 1999, to June 30, 2003, with a total amount of $1,911,820. For our audit period—July 1, 2000, through June 30, 2001—Wayside received $458,491 from DHS to operate the facility and to provide services.
This audit determined whether Wayside complied with its contract with DHS. Specifically, the audit determined whether Wayside provided adequate, safe, and sanitary conditions at the Residence, maintained complete and accurate records to support amounts billed to DHS, and maintained complete and accurate records to support its expenses. It also determined whether the expenses were reasonable and necessary for the operation and maintenance of the shelter.
Based on inspections of the facility and Wayside’s actions in correcting the conditions that were brought to its attention, we believe that Wayside maintained the Residence in an adequate, safe, and sanitary fashion. Specifically, a March 26, 2002 visit to Wayside found that the common areas of the facility, including the hallways, laundry room, visitors’ room, playground, and day care center had no detectable problems. However, roach infestation and water damage to a ceiling in a bathroom, running water in a toilet, damage to a closet door, and a broken broiler drawer in a kitchen stove were found in the five apartments inspected. We informed Wayside officials of these problems. A follow-up visit on June 4, 2002, confirmed that these problems, with the exception of the roach infestation, were corrected. According to Wayside’s records, exterminating services are performed in the apartments once a month.
In addition, Wayside maintained complete and accurate records that support its expenses and the amounts billed to DHS, and it generally spent program funds on expenses that were reasonable and necessary for the operation of the Residence. Moreover, Wayside provided the services called for in its contract.
However, there were certain weaknesses in Wayside’s operating practices. Specifically, Wayside: did not compensate an employee time and a half for work in excess of 40 hours per week; paid one of its employees $2,159 that was not included in his yearly earnings statement; made one disbursement, totaling $413, for a questionable expense; and did not have adequate documentation for $1,030 in expenses.
The report recommended that Wayside should: consider increasing extermination services in the facility to twice a month; calculate payments to its employees in accordance with federal labor standards and pay its underpaid employee the $3,189 due to him; report all payments for services rendered by its employees on the employees’ W-2 statements; and maintain adequate documentation for all purchases.
Wayside stated that it implemented the report’s recommendations that it increase extermination services in the facility; report all payments for services rendered by its employees on W-2 statements; and maintain adequate documentation for all purchases. With regard to our remaining recommendation, Wayside stated, "In accordance with federal labor standards, we will calculate payment to the cited employee and payment will be paid by November 2002." DHS responded that it "is pleased to learn that Wayside MacDonough has generally complied with the terms of its contract. . . . Concerning weaknesses in Wayside’s operating practices, DHS’ Family Services will follow up to ensure that those situations are corrected."