Audit Report on the Financial and Operating Practices of the 14th Street-Union Square Business Improvement District
AUDIT REPORT IN BRIEF
This audit of the 14th Street-Union Square Business Improvement District (Union Square BID) covered the organization’s provision of services, compliance with its City contract, and adequacy of internal controls over funds and operations. The Union Square BID is funded by special assessments levied against district property owners and uses these moneys to enhance and promote the district. The City Department of Small Business Services (DSBS) supervises and oversees the Union Square BID.
The Union Square BID provided supplemental services, such as sanitation, security, and marketing and promotion, as called for in its District Plan. The BID generally complied with the key provisions of its contract with DSBS. The BID maintained complete and accurate records, submitted annual reports to DSBS, and had its annual financial statements certified by an independent certified public accountant. The BID also complied with the procurement procedures of its contract with DSBS.
In addition, the BID maintained adequate accountability over its receipts and disbursements, had adequate segregation of duties, and properly recorded and authorized transactions. However, there was a weakness in the BID’s corporate governance regarding the lack of sub-committee meeting minutes and a weakness in the BID’s internal control system concerning uninsured deposits. In addition, the BID did not maintain daily time records for its salaried staff.
To address these issues, we make three recommendations, namely, that the Union Square BID should:
- Record and prepare minutes of all Board sub-committee meetings, in accordance with its bylaws and DSBS contract.
- Place its funds in collaterlized accounts.
- Require its salaried staff to submit weekly timesheets.
The matters covered in this report were discussed with Union Square BID officials during and at the conclusion of this audit. A preliminary draft report was sent to Union Square BID officials on October 17, 2003, and was discussed at an exit conference on October 30, 2003. We submitted a draft report to Union Square BID officials on November 7, 2003, with a request for comments. We received a written response from BID officials on November 24, 2003. The BID generally agreed with our findings and observations.