Audit Report on the Contract of Leake and Watts Services, Inc., with The Department of Juvenile Justice
EXECUTIVE SUMMARY
On August 18, 1999, the New York City Department of Juvenile Justice (DJJ), entered into a three-year contract with Leake and Watts Services, Inc. (LWS), to operate a non-secure detention group home facility for youths who are in the custody of the Department of Juvenile Justice. The initial term of the contract is from November 1, 1999, to October 31, 2002, with three one-year renewal options. For our audit period—November 1, 2000, through October 31, 2001—LWS received $743,782 from DJJ to operate the facility and provide food, clothing, shelter, education, health care, recreation, and case management for the residents in its care.
This audit determined whether LWS maintained complete and accurate records to support its expenses, whether those expenses were reasonable and necessary, and whether LWS provided safe and sanitary conditions for its residents. We verified that all revenue received from DJJ was properly recorded on the LWS books and records and deposited in the LWS bank account. To determine whether LWS charged only for facility-related expenses to the DJJ contract, we reviewed payroll and personnel records, invoices and supporting documentation for all expenses reported on the LWS "Monthly Expenditure Report" for the audit period. We reviewed original invoices, payment vouchers, canceled checks, and supporting documentation for each transaction, noting the description of the item purchased or services rendered, checking for proper approvals and mathematical accuracy.
LWS generally adhered to the provisions of its agreement with DJJ and had an adequate system of internal controls over the recording and reporting of its revenues and expenses. All revenue received from DJJ was properly recorded on LWS books and records and was properly deposited. All expenses were reasonable and appropriate, and were adequately documented. In addition, LWS provided adequate, safe, and sanitary conditions for the residents of the facility.
However, LWS did not ensure that all employees recorded their arrival and departure times. Therefore, we recommend that LWS do so. In his response, LWS’s Chief Financial Officer stated that he accepts the report. DJJ’s Director of Audit responded that DJJ will monitor the group home to ensure that all employees record their arrival and departure times.