Audit Report On The Purchasing Practices Of The Board Of Correction

Executive Summary

The Board of Correction (BOC) is a non-judicial board tasked with regulating, monitoring, and inspecting Department of Correction (DOC) facilities.  Pursuant to Chapter 25, §626 of the New York City Charter, the BOC is required to: establish and ensure compliance with minimum standards “for the care, custody, correction, treatment, supervision, and discipline of all persons held or confined under the jurisdiction of the Department of Correction;” investigate any matters within the DOC’s jurisdiction; review grievances from inmates and staff; evaluate the DOC’s performance; and make recommendations on key areas of correctional planning.

The BOC incurred Other Than Personal Service (OTPS) expenditures of $108,038 and $184,374 in Fiscal Years 2017 and 2018, respectively.

We conducted this audit to determine whether the BOC maintained adequate financial controls over its purchasing practices for OTPS expenditures as required by Comptroller’s Directives, Department of Citywide Administrative Services’ (DCAS’) purchasing guidelines, and BOC’s policies and procedures.

Audit Findings and Conclusions

Although the BOC generally maintained adequate controls over its purchasing practices, we found several weaknesses in the BOC’s financial controls.  Specifically, we found that the BOC: (1) had inadequate controls over its Imprest Fund account; (2) was not in compliance with the Policies and Procedures for DCAS Cardholders when using BOC’s agency P-cards for purchases; (3) did not record two expenses in the correct fiscal year; and (4) did not properly document its approval and post-review procedures for out-of-town travel.

Audit Recommendations

To address these issues, we make seven recommendations to the BOC.
Specifically, the BOC should:

· Strengthen its controls over its Imprest Fund by:

o   Ensuring that Imprest Fund payments are made only where permitted by and only in accordance with the governing rules and regulations;

o   Maintaining proper documentation to support its Imprest Fund transactions, including Reimbursement Forms with proper signatures and approvals, and receipts or invoices;

o   Properly coding all travel expenditures in the City’s Financial Management System (FMS) to ensure the data entered is consistent with the nature of the expense; and

o   Including a void period on the Imprest Fund checks, requiring dual signature authorizations on Imprest Fund check payments, and following up to void or resolve the status of outstanding checks issued from the Imprest Fund in a timely manner;

· Cease using its P-cards to pay for non-permissible items;

· Maintain documentation to ensure and show that all City requirement contracts and other city resources were reviewed and considered prior to using its P-cards for purchases;

· Utilize transaction logs and conduct timely reconciliations of P-card purchases and statements to ensure that all such purchases that resulted in the BOC’s receipt of goods and services were properly authorized;

· Create and maintain receiving reports for all goods received at BOC locations;

· Ensure that all OTPS purchases are recorded in the correct fiscal year in accordance with delivery and service dates; and

· Enhance controls over employee travel to include formal pre-approval of potential expenses and that the staff members who travel at the City’s expense timely submit the required post-travel synopses of the conferences they attended or the activities they engaged in and that those submissions are adequately and timely reviewed and are retained as required to show the benefits that the agency received as a result of the expenditure.

Agency Response

The BOC agreed with all of the audit’s recommendations.  In its response, the BOC stated,

The Board also acknowledges that the audit found areas for improvement.  While the Board had previously identified and resolved nearly all concerns identified in the Comptroller’s May 2019 report, the agency welcomes and accepts all seven (7) Comptroller recommendations set forth in the Draft Audit Report (FN 19-056A) dated May 24, 2019.