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Posted July 13, 2012 | comments 6 Comments

SAAA 2011 audit finds flaws, suggests improvements

By Joe Beck - jbeck@nvdaily.com

An independent audit of the Shenandoah Area Agency on Aging's finances for fiscal year 2011 released Friday depicts an agency in crisis weeks after the dismissals of the agency's three top executives last year.

John Hudson, executive director of the agency's board, said after a board meeting that the audit contained "no surprises" after months of lawsuits and investigations by government agencies into SAAA's financial turmoil.

The dismissals of executive director Helen Cockrell, director of development and community relations Ann T. McIntyre and finance director Jim Shaffer in September form the backdrop to the audit conducted by Winchester accounting firm Yount Hyde and Barbour.

Although none of the three is mentioned in the 31-page audit, several parts identifying "material weaknesses" and "significant deficiencies" in financial reporting and internal controls over major agency programs closely track issues raised by the board in dismissing the administrators. The audit also addresses some financial irregularities revealed last year in an investigation launched by a state agency into SAAA's management practices.

That investigation by the state Division for the Aging has led the Virginia State Police to investigate SAAA for possible criminal wrongdoing in the management of its finances.

The results of the state police investigation are still pending.

Among the auditors' findings, under a category listed as "segregation of duties," is the following finding: "We noted the former executive director's signature was printed on checks during the check printing process. A second manual signature was not required."

The audit states the effect of such a practice was to leave the accounts payable clerk "in complete control of cash disbursements during this time period. Requiring checks to be manually signed by two authorized check signers can prevent unauthorized check disbursements."

The agency has accused Cockrell of embezzlement in a lawsuit filed as a counterclaim to a suit that Cockrell filed challenging the circumstances of her dismissal. The agency's complaint asserts Cockrell paid bills from a company identified as "RLS Associates" with two checks from SAAA "when no money was due RLS Associates from SAAA."

The audit notes that the agency has begun requiring checks to be manually signed by two authorized persons in this fiscal year to "prevent unauthorized cash disbursements."

"To improve this control, we recommend that supporting documents be attached to checks to be signed and such documents be reviewed by the person signing the checks," the audit added.

Other findings and recommendations in the audit dealt with issues such as a formal review of the executive director's hours; credit card transactions lacking proper documentation; and the lack of a formal purchase approval process that led the agency to buy an SUV for Cockrell's use without any indication in board minutes that the directors approved the purchase.

Hudson said after the meeting the agency is on a path to recovery from its fiscal woes, although it still owes a large amount money to vendors, and the agency's legal conflicts with Cockrell remain scheduled for trial in October.

Hudson said the addition of a part-time certified public accountant to the staff has done much to bring order to the chaos that existed in fiscal year 2011.

"The finances have significantly improved," Hudson said, adding that the agency has a chance of reaching its goal of a balanced budget when this fiscal year ends Sept. 30.


6 Comments | Leave a comment

    When you kill off all of the chiefs, the tribe runs wild... Reggie Arno Danville VA

    I think that some new blood is needed in the agency. There are plenty of graduates looking for jobs and I think we could use some here. We need new ideas and new breath to this agency. We may be coming out of the hole, but we in Luray, are still doing without a bus, because the AC hasn't been fixed and it's been broke for WEEKS!. Things don't change, they just stay the same, and it's always the same ole story.........

      So let me get this straight. You are concerned about a large van that was ONLY used to deliver meals on the longest run in the district, and that needs work on the AC. Is that better than delivering the meals with a small station wagon that by it self saves this agency just under $400 per month in Gas??? The other van is usable in an emergency and the AC will be repaired when other more pressing things are taken care of first. By the way that van is only needed 1 or 2 times per year. So, with all your wisdom, you are going to tell the Agency what they need to do. The only one stuck in the last century is you. We you have something truthful to say, by all means do so. If all you want is to try to nitpik and to simply try to stir things up with half truths and out right lies. Then that is your right too. Just know that almost everyone else knows your agenda...

    Someone out of the goodness of their heart spent their own money to fix that bus, to get it on the road, because the Agency DID NOT have the funds to fix the bus. Now the bus sits idle, while, those that deliver the meals, MUST CRAWL OVER THE FRONT SEAT TO THE BACK to get to the meals!!!! You are obviously NOT the person delivering the MEAL in Stanley and Shenandoah. Why don't you come and volunteer for a few weeks and try this LITTTLE GAS SAVER OUT??? BE THERE,when it breaks down with you in 100 degree heat like it has with Maggie, TWICE!!! I am not trying to stir up trouble, all I want is for Maggie to get her bus back, running in good order, so the meals can be delivered on time and still be at the right temperature. That little car was NOT designed to run 2 HOT boxes and run the AC in this hot weather. I don't care about the gas saver... give it to some other group and quit treating Luray like a Step-child and giving us the broken down stuff.

    I have a question for someone who has better inside knowledge than I do. What happened to the 1.8M dollar loan that the US dept of Agriculture gave to the center last year for renovations? Was it spent? Is it still lying around in the bank to be used for future renovations tg the Agency?
    Just asking.....When does the Agency have to start paying it back?


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