May 24, 1999
Office of the Inspector General
The Office of the Inspector General, Audit Division, has completed an audit of the Healing Little Hearts Project, Grant No. 96-VI-GX-0012, administered by Tender Hearts Against Family Violence, Inc. (Tender Hearts), for the period July 1, 1996, to December 31, 1998. Tender Hearts received an initial and a supplemental award, totaling $134,777, under Grant No. 96-VI-GX-0012 which was effective July 1, 1996, through October 31, 1998. This audit was conducted at the request of the Office of Justice Programs (OJP).
Based on information obtained from former Tender Hearts employees and the grantee's records, we determined that the grantee had implemented substantially all of the planned activities and had met the grant objectives. However, we identified the following concerns:
- Tender Hearts has neither filed tax returns nor paid payroll taxes timely. Tender Hearts' failure to remain current with federal tax obligations creates a situation in which grant funds may be seized by the Internal Revenue Service (IRS) to pay past-due payroll taxes.
- Tender Hearts did not submit all required Financial Status Reports and Categorical Assistance Progress Reports, and those submitted were not always timely.
- Financial Status Reports were not accurate. The grantee's procedures were not adequate to ensure the preparation of accurate Financial Status Reports.
- Expenditures totaling $18,888 were incorrectly charged to the grant. These expenditures were questioned because they were in excess of budgeted amounts or federal guidelines, had little or no relation to grant projects, or were unsupported.
- Grant budgets did not include all grant-related expenses and certain types of expenses were not budgeted in an appropriate manner. The budget contained specific amounts to be charged to the grant for expenses, such as utilities, that benefitted Tender Hearts as an organization and not just the Healing Little Hearts Project. The budget should have contained an allocation plan for these types of expenses so the amount charged to the grant was based on the relative benefits received by the Healing Little Hearts Project.
- The internal controls did not include procedures to ensure: the accuracy of entries in the accounting records, expenditures were within budgeted amounts, and expenditures were properly authorized and supported before checks were signed.
These weaknesses are discussed in the Findings and Recommendations and Other Matters sections of this report. Our audit scope and methodology are described in Appendix I.