Audit Report on the Financial and Operating Practices of the Social Service Employees Union Local 371 Administrative Fund

The Social Service Employees Union Local 371 Administrative Fund (Administrative Fund) was created to receive the negotiated contributions from its members’ employers and to allocate and distribute the monies received to the Social Service Employees Union Local 371 Benefit Funds—Social Service Employees Union Local 371 Welfare Fund (Welfare Fund), Social Service Employees Union Local 371 Legal Services Fund (Legal Services Fund), and Social Service Employees Union Local 371 Educational Fund (Educational Fund). The Administrative Fund is required to conform to Comptroller’s Directive #12, ‘Employee Benefit Funds—Uniform Reporting and Auditing Requirements,’ which sets forth accounting, auditing, and financial guidelines for funds and its boards of trustees.
We performed an audit on the financial and operating practices of the Administrative Fund for Fiscal Year 2008. As of June 30, 2008, the Administrative Fund reported $27,825,797 in City contributions and net assets of $9,409,531.

Audit Findings and Conclusions

The audit found that the Administrative Fund complied with the procedures and reporting requirements of Directive #12; in addition, the Administrative Fund complied with its accounting procedures, and those procedures were adequate and proper—except for the lack of written policies and procedures requiring that complete time records be maintained. Also, the Administrative Fund paid administrative expenses that were appropriate and reasonable—except for payroll expenses. Due to the lack of complete employee time records, we could not be assured that employees were paid for hours actually worked. Furthermore, the Administrative Fund did not properly authorize checks issued from its operating account for Fiscal Year 2008 as required by §7.8 of the Administrative Fund’s Trust Agreement.

Audit Recommendations

The audit makes two recommendations. The Administrative Fund should:

• Create and implement written timekeeping procedures requiring formal recording of each employee’s time and maintain accurate daily attendance records and records of leave balances for its employees.
• Ensure that only authorized personnel sign checks.

Fund Response

In their response, Administrative Fund officials generally did not specifically address the audit’s findings or recommendations and did not indicate how they will implement the necessary corrective actions to remediate the findings discussed in this report.