Audit Report on the Downtown Brooklyn Partnership, Inc. Financial and Operating Practices and Compliance with Its City Consulting Contract

The Downtown Brooklyn Partnership, Inc. (DBP) is a not-for-profit local development corporation established in 2006 to coordinate the economic development activities in downtown Brooklyn. DBP performs its services under a consulting contract with the City of New York through the Department of Small Business Services (DSBS). Under the contract, DBP is required to undertake a number of economic development activities designed to promote and stimulate economic growth in the area, including the retention and attraction of industries that would allow the City to create and maintain job opportunities in downtown Brooklyn. In addition, the contract provides for DBP to advance the development of cultural venues and public space within the Brooklyn Academy of Music Cultural District and to oversee the programs and services of three Business Improvement Districts.

Audit Findings and Conclusions

Our review found that DBP lacks adequate controls to substantiate its payments to salaried employees. Specifically, our audit noted that DBP did not properly administer its employees’ work hours and leave records. Additionally, DBP does not have proper procedures and records to support the private contributions it receives. Without adequate procedures for the solicitation and collection of these funds, DBP cannot accurately determine its total amount of contributions. This ultimately affects the City’s ability to determine the appropriate amount of contract funds it awards to DBP. DBP also did not always comply with the procurement and reporting requirements of its City contract.

Audit Recommendations

Based on our findings, we recommend that DBP:

• Ensure the timekeeping system reflects employees’ work hours and time and attendance records to ensure effective tracking of employees’ absences.
• Develop and maintain a list of private contributors and establish procedures to properly support and account for revenue from private contributions.
• Adhere to the procurement requirements outlined in Section 6.02 of the contract.
• Submit timely programmatic and financial reports to the Deputy Mayor’s Office in accordance with its contract with the City.

We recommend that DSBS:

• Ensure that DBP complies with all the report’s recommendations.

Agency Responses

In DBP’s response received on May 4, 2011, DBP officials generally agreed with the audit report’s findings and recommendations and stated that “we take these matters very seriously and look forward to working with the Comptroller’s office to ensure that these recommendations are implemented properly.” DSBS officials also stated that “SBS will make every effort to ensure that DBP complies with the recommendations outlined by the Comptroller in the report.”