United Cancer Council, Inc. - Page 88

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                    approximately 50% of the time.  It is possible that               
                    bids were obtained over the phone, but not documented.            
                    In some instances, the documentation we reviewed stated           
                    that a bid could not be obtained due to time                      
                    constraints.  We do not understand how this could occur           
                    as the mailing schedule is determined months in                   
                    advance.  Another possibility which exists is that                
                    competitive bids are not obtained but documentation is            
                    provided that states bids were obtained to pacify                 
                    council personnel requesting adherence to the stated              
                    procedures regarding obtaining bids.  True compliance             
                    testing of the procedures can only be achieved through            
                    independent verification with the vendors involved.               
               3.   Lack of Timely Information.                                       
                    The final major item we would like to discuss concerns            
                    the lack of adequate, timely financial information                
                    summarizing the activities of the direct mail campaign.           
                    It is our understanding that management decisions are             
                    often based on financial information obtained from                
                    reports generated by W&H and the modified cash-basis              
                    monthly financial statements prepared by the Council’s            
                    accountant.  This could be a dangerous course.  We have           
                    made two attempts to reconcile financial information in           
                    the W&H reports to the Council’s financial records and            
                    have been unable to do so.  We were then informed by              
                    * * * Watson that these reports were not complete,                
                    contain several estimates, and would probably not agree           
                    with the Council’s books.  Therefore, we strongly                 
                    recommend that the Board not rely quite so heavily on             
                    the reports generated by W&H.  The best course of                 
                    action would be for Council personnel to prepare the              
                    monthly financial statements in the same manner as they           
                    have been prepared at December 31, 1985.  However,                
                    given current circumstances, it would be impossible to            
                    do this on a timely basis.  One problem is that W&H can           
                    take up to four months to record an invoice in accounts           
                    payable, particularly W&H’s own invoices.  With that              
                    kind of time lag, the Council cannot determine the true           
                    accounts payable at month-end until four months later.            
                    * * *                                                             
               Petitioner’s concern about W&H’s use of reasonable efforts             
          to obtain competitive bids from vendors continued throughout the            
          term of the Contract.  During 1986 and 1987, petitioner further             
          discussed with W&H petitioner’s desire to exercise more control             



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