Audit Report on the New York City Department for the Aging’s Compliance with Comptroller’s Directive #24 Regarding the Use of Miscellaneous Payment

Executive summary

The objective of this audit was to determine whether the Department for the Aging (DFTA) is in compliance with Comptroller’s Directive #24, Agency Purchasing Procedures and Controls; Section 6.3, Miscellaneous Payment Vouchers and Directive #6, Travel, Meals, Lodging and Miscellaneous Agency Expenses.

DFTA’s mission is “to work for the empowerment, independence, dignity, and quality of life of New York City’s diverse older adults and for the support of their families through advocacy, education and the coordination and delivery of services.”[1]   DFTA primarily contracts with community-based organizations throughout the five boroughs to provide services for seniors.

For Fiscal Year 2016, DFTA’s Other Than Personal Services (OTPS) expenditures totaled $281,044,163[2].   Of that amount, $225,889 in expenses was paid through the use of miscellaneous vouchers.  Those payments included reimbursements to DFTA employees for expenses such as phone calls, out-of-town travel, seminars, and train fare and meals for volunteers in DFTA’s Foster Grandparent program.[3]

Comptroller’s Directive #24, Agency Purchasing Procedures and Controls, provides guidance on the appropriate use of miscellaneous vouchers.  Section 6.3 of Comptroller’s Directive #24 stipulates that “Miscellaneous Payment Vouchers (PVMs) may be used only when estimated or actual future liability is not determinable, or a contract or a purchase document is not required or applicable.”  In addition, Directive #6, Travel, Meals, Lodging and Miscellaneous Agency Expenses, governs expenditures for employee travel, agency-provided meals and refreshments and a variety of other miscellaneous agency expenditures.

Audit Findings and Conclusion

The audit found that DFTA did not consistently comply with Directive #24 or Directive #6 regarding the use of miscellaneous payment vouchers.  Although the payment voucher files we reviewed generally contained documentation to indicate the expenses being paid, some of those expenses should not have been paid through miscellaneous vouchers.  Of the 34 vouchers we sampled, totaling $76,304, we found that 13 vouchers (38 percent of the vouchers sampled) contained ineligible expenses totaling $10,088 (13 percent of the total dollar amount sampled).  Ineligible expenses included payments for contracted services, imprest fund-type expenditures (small purchases under $250),[4] and reimbursement for commuting expenses.  We also found that several invoices were not stamped “paid” as required and that reimbursement claims were not submitted timely.  Finally, we found that the object codes used to categorize expenses were incorrect in six of the 34 vouchers sampled.

Audit Recommendations

Based on the audit we make four recommendations:

• DFTA should reiterate to staff that they must comply with guidelines regarding the appropriate use of miscellaneous vouchers. The required actions include maintaining sufficient funds in the imprest fund account at all times to cover imprest fund-type expenses, and ensuring that miscellaneous vouchers are used only for purposes that are allowed by Comptroller’s Directive #24.
• DFTA should ensure that employees are not reimbursed for commuting expenses except in limited circumstances where expressly permitted by Comptroller’s Directive #6. In such instances, prior approval by the agency head or his or her designee must be obtained and documented in the payment file.
• DFTA should establish and enforce an agency policy, consistent with Comptroller’s Directive #6, mandating the maximum time period for the submission of reimbursement claims, following which reimbursement would not be permitted, to ensure that all claims for reimbursements of authorized expenses incurred are submitted timely.
• DFTA should ensure that all invoices paid by the agency are stamped “paid” and that all payments are charged to the correct object codes.

Agency Response

In its response, DFTA agreed with the audit’s four recommendations.

[1]  “About DFTA,” New York City Department for the Aging, accessed February 7, 2017,

http://www.nyc.gov/html/dfta/html/about/about.shtml.

[2]   OTPS is funding for expenses other than salaries, such as supplies, equipment, and contractual services. Understanding the Budget, at 13, New York City Independent Budget Office, July 2017, http://www.ibo.nyc.ny.us/iboreports/understandingthebudget.pdf.

[3] DFTA administers a Foster Grandparent Program where volunteers provide mentoring services to low income children in schools and in foster homes

[4] Imprest Funds are agency-controlled checking accounts that can be used for small purchases and petty cash transactions. Comptroller’s Directive #3, Administration of Imprest Funds, at December 6, 2016.