Purpose of Audit

The purpose of our audit was to review the Executive Director’s oversight of the processes and procedures governing the disbursement process to determine whether disbursements were for appropriate DIBID purposes for the period January 1, 2011, to October 5, 2012.

Background

The DIBID is a not-for profit corporation that operates under the Downtown Ithaca Alliance (DIA) and is charged with the revitalization, development, promotion, and management of the downtown Ithaca area. The DIA is governed by a 24-member Board of Directors (Board) which comprises 10 members who represent property owners in the DIBID, five members who represent commercial tenants, one residential tenant member, three City members, one County member, and four non-voting members. In 2011, the DIBID received $347,875 from special assessments on approximately 200 taxable parcels, generated an additional $176,901 from promotional events, and received $91,000 in government funding, for a total of $615,776 of total income.

Key Findings

• The Executive Director did not ensure that disbursements were for proper DIBID purposes. He did not ensure that claims for payments had sufficient supporting documentation that would provide proof that they were for valid DIBID expenditures. We found that six of the 20 checks we tested, totaling $3,316, did not have sufficient documentation. Although DIA officials provided explanations for these expenditures, which appeared to be reasonable DIBID expenditures, without proper supporting documentation such as receipts, invoices, or bills attached to the claims, taxpayers do not have any assurance that these monies were used for valid DIBID purposes.
• The Executive Director did not provide proper oversight of the disbursement process by monitoring the use of his signature stamp and the work performed by individuals who performed incompatible financial duties, or by reviewing payroll to ensure that it was accurate.

Key Recommendations

• Require adequate documentation for claims prior to disbursing a check.
• Ensure that the Executive Director’s monitors the use of his signature stamp.
• Segregate incompatible financial duties so that no one person controls all of cash disbursement functions. Review the payroll to ensure that all employees are paid at proper Board-approved rates and for hours actually worked and that withholdings are accurate.