Audit Report on the Contract of New York Therapeutic Communities With the Department of Probation

EXECUTIVE SUMMARY

On June 10, 1999, the Department of Probation (DOP) entered into a two-year contract with New York Therapeutic Communities (NYTC) to operate for probationers a residential treatment facility in the Bedford Stuyvesant section of Brooklyn. For our audit period—July 1, 2000, to June 30, 2001—NYTC received $198,480 from DOP to operate the residential treatment facility and to provide various services to probationers.

This audit determined whether NYTC maintained adequate internal controls over the receipt and expenditures of contract funds and spent all contract funds on program-related expenses. We verified whether all revenue received from DOP was properly recorded on NYTC books and records. By reviewing the original invoices, payment vouchers, canceled checks, and supporting documentation for each transaction, we determined whether NYTC charged only program-related expenses to the DOP contract. Finally, we conducted a field visit to the facility on May 6, 2002, and verified whether the kitchen, restrooms, dormitories, and other areas of the facility were clean and safe for the residents.

NYTC generally adhered to the provisions of its agreement with DOP and had an adequate system of internal controls over the recording and reporting of its revenues and expenses. All revenue received from DOP was properly recorded on NYTC’s books and records. All expenses were reasonable and appropriate, and were adequately documented. In addition, NYTC maintained the facility in a safe and sanitary manner.

In view of these findings, we make no recommendations. Officials from NYTC decided that an exit conference was not necessary. On May 29, 2002, we submitted a draft report to NYTC and DOP officials with a request for comments. We received a written response from NYTC on June 12, 2002. In his response, NYTC’s Administrator stated that he accepts the report. DOP did not respond to the draft report.