Audit Report on the Financial Practices of Twin Towers Fund

AUDIT REPORT IN BRIEF

The Twin Towers Fund (Fund) was created on September 12, 2001, to provide support for the families of uniformed and other rescue workers who lost their lives or were severely injured in the September 11, 2001, terrorist attack. From September 12 to December 17, 2001, the Fund’s assets were held and managed by the New York City Public/Private Initiatives, Inc. (NYCPPI), a not-for-profit organization whose mission is to work with the City in jointly approved projects. NYCPPI worked closely with the Fund, managing Fund assets, while the Fund obtained New York State and IRS approval to operate as a charity.

The Fund collected donations concurrently with NYCPPI for several months after the approvals were obtained. It began to directly deposit donations in December 2001. In addition, NYCPPI transferred $107,934,625 to the Fund between December 2001 and August 2002.

The audit assessed the adequacy of the Fund’s internal controls over its recording and reporting of contributions to the Fund and distributions from the Fund, and determined whether all contributions were distributed pursuant to the Fund’s established criteria.

With the exception of a few minor errors noted below, the Fund had adequate controls over the revenues it received to ensure that all contributions and other income received was accurately recorded on the Fund’s books and records. In addition, distributions from the Fund were made in accordance with Distribution Committee rules and Board-approved eligibility guidelines. Finally, the Fund’s administrative expenses were reasonable and necessary for its operation.

We did find, however, the following minor errors.

• The Fund did not deposit six contribution checks totaling $8,842 in its bank accounts. These checks were found in the Fund’s files.
• While cleaning up duplicate entries caused by software problems the Fund incorrectly adjusted its General Ledger by $8,778.
• $200 was recorded twice on the Fund’s General Ledger.
• The Fund owes one beneficiary a collective communal benefit share of $6,250 from a $50,000 "Next of Kin Benefit," and it did not recoup $892 in overpayments from each of seven other beneficiaries who received this benefit.

The Fund should ensure that: all contributions received are promptly deposited in Fund bank accounts; the minor errors identified in the report are corrected, and, the beneficiary who did not receive a share of the Next of Kin benefit is paid the $6,250 due. In addition the Fund should recoup overpayments made to seven beneficiaries.

Fund officials responded that the errors noted in the report have either been corrected or will be corrected with the final distribution of funds.