Audit Report on the Financial And Operating Practices of the Jerome-Gun Hill Business Improvement District
AUDIT REPORT IN BRIEF
The audit determined whether the Jerome-Gun Hill Business Improvement District (BID) has adequate internal controls over its funds, provided services called for in its District Plan, and complied with key terms of its contract with the New York City Department of Small Business Services (DSBS).
The Jerome-Gun Hill BID1 includes a business district in the Bronx along Jerome Avenue between Mosholu Parkway and East Gun Hill Road, and East Gun Hill Road between Jerome and Webster Avenues. In 1996, the BID entered into its first contract 2 with DSBS. The BID is governed by a Board of Directors consisting mainly of property and business owners within the district and is managed by a not-for-profit corporation, the Mosholu Preservation Corporation (MPC) 3. In Fiscal Year 2008, the BID received assessments amounting to $209,000, in addition to supplemental income of $34,473 from its annual street fair ($19,473) and a grant receivable ($15,000), for total revenues of $243,473.
Audit Findings and Conclusions
The BID’s internal controls over funds appear to be adequate, the BID provided the services stated in its District Plan, and it complied with most terms of its DSBS contract. However, our audit found that the BID did not adequately separate its funds from those of MPC, did not adequately communicate with members, lacked the required number of members on its Board of Directors, had inadequate oversight of contracts, and often did not make prompt payments for purchases.
Audit Recommendations
To address these issues, we make twelve recommendations, including that the BID should ensure that:
Funds are adequately separated between the BID and the MPC so that BID purchases are paid for with BID funds and MPC purchases are paid for with MPC funds.
Members are fully informed of BID meetings, promotions, and advertising.
Recruitment efforts are increased to encourage members to join its Board of Directors.
At least two elected officers of the corporation review and sign all agreements.
Payments to vendors are made within 30 days of receipt of the vendor’s invoice.
BID Response
In their response, BID officials agreed with all 12 recommendations.
2 In 2004, the Jerome BID’s contract was most recently renewed for five years.
3 Started in 1981, the MPC is a not-for-profit affiliate of Montefiore Medical Center that was formed and funded by Montefiore to promote the safety and vitality of the neighborhoods around its facilities, particularly in the northwest Bronx. According to a management agreement with the MPC, the BID pays $29,000 annually for the MPC to (1) provide a part-time salaried district manager to implement its District Plan, and (2) maintain required insurance. The MPC Director of Economic Development serves as the BID’s Executive Director.