Quarterly President's Message Tough Calls in Social Service Audits - Fall 2009
| Tough Calls in Social Service Audits - Fall 2009 | | Print | |
| Written by Amanda Noble |
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ALGA's President talks about two experiences in auditing by social services and the easy and difficult challenges we face.
One of my first experiences testing internal controls occurred several years before I'd heard of performance auditing, let alone realized it was a career option. I was a case manager for a program to help the homeless in a large, Midwestern city. Like many social services, the program was small and underfunded in proportion to the problem it was supposed to address. The city had continued the program after federal funding was discontinued in the mid-1980s. The program was intended to coordinate with other social service agencies to help families and individuals navigate the many obstacles they faced in trying to get and keep housing. One of the largest aspects of the program was paying for child care while a single parent was taking classes or looking for a job. Because my supervisor disliked numbers, it fell to me to tally the attendance sheets and ensure that the parents met the city's eligibility requirements. I didn't realize that I was monitoring a subrecipient, but in the course of preparing a monthly report, I found a discrepancy. Digging a little deeper, I discovered that the nuns had fudged the numbers to keep one little boy in day care. Sister Alma explained that his mother was a particularly hard case drug addict and that they could at least make sure he was adequately fed and clothed and in a nurturing environment for part of the day. I knew that the state moved slowly in cases of child neglect. I also knew that the city subsidy didn't pay the full cost of day care. The program was city-funded and not subject to restrictions and oversight by another level of government. Was it more important to enforce the eligibility rule or to help to the little boy? I'll leave it to the reader to decide the appropriate response, but note that the statute of limitations is long past and I've changed the names of the relevant parties. I've thought of Sister Alma over the years and wondered about the value of auditing social services. Is it really worth spending scarce audit resources to find out whether the nuns are skirting the rules? I might approach the question differently now than I did 20-some years ago, before I'd learned about audit risk and materiality, but I don't know that I'd come to a different conclusion. But isn't this the same thing that auditors hear frequently from critics - that it's better to spend money on direct service delivery than on bean counters to audit the services? I guess the answer is the same for social service programs as for other types of programs we audit; we review efficiency and effectiveness, as well as compliance. In this issue, Gary Blackmer and Pam Weipert offer insights into how we can play a beneficial role in auditing social services by targeting risks and evaluating outcomes. Incidentally, years after my first brush with subrecipient monitoring, I worked with the Regional HUD IG's office to audit a city subrecipient of federal housing funds. The agency primarily financed construction loans for new and redeveloped affordable housing and forgave the difference between the construction cost and selling price. Nearly $5 million of the approximately $25 million the city paid the agency in the year we reviewed went for administrative costs. Only 44 homes were sold, with direct public subsidies up to $81,000 per unit. The agency spent nearly $600,000 rehabilitating two single-family homes in a redevelopment area. The homes had not been offered for sale at the time of the audit. That would buy a lot of day care for neglected children.
Amanda Noble |
