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Among the concerns raised by petitioner’s certified public
accounting firm in its later management letter dated May 23,
1986, to petitioner’s board of directors and executive committee,
are the following:
2. W&H Responsibility for Documentation.
It is our understanding that certain procedures in the areas
of purchasing and cash disbursements are executed by W&H
personnel. We performed a limited test of such procedures
and have the following observations:
a. We could not locate a check request for each cash
disbursement. It was our understanding that at the
very minimum, each check issued is to have a
corresponding check request identified with it. The
check request is the only document which indicates W&H
approval of the cash disbursement.
b. During our testing, there were several instances where
we could not locate the invoice(s) associated with
specific checks. We recommend that Council personnel
perform a timely limited review of all cash
disbursements to insure that the proper supporting
documentation exists. One area that needs special
attention is postage. Although invoices are not issued
for postage disbursements, receipts are given to W&H
upon payment. We strongly recommend that the Council
request that the original postage receipt be sent to
the Council and if W&H requires the receipts for their
files, they could retain a copy of the receipt.
Although our testing did not indicate that any of the
checks written for postage were used for items other
than postage, the receipts would provide verification
of these substantial expenditures. [See supra table 7,
which shows that postage and shipping was petitioner’s
largest category of expenses for 1985, 1986, 1987, and
1988.]
c. W&H appears to be decidedly lacking in its adherence to
the stated procedures regarding obtaining competitive
bids on behalf of the Council. A number of the goods
and services are paid for on a contractual basis so
that the main items subject to purchase using
competitive bids are printing and mailhouse costs. Of
the items we examined on a test basis which should have
been subject to competitive bids, we could find
documentation that bids had been obtained only
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