A District organization that’s responsible for doling out millions of dollars in grants each year hasn’t reviewed its finances in nearly three years, a lapse legislators call a troubling extension of the corporation’s history of lax oversight.
The DC Children and Youth Investment Trust Corporation, or CYITC, which former D.C. Councilman Harry Thomas Jr. used to divert money meant for youth sports back to himself, has not received an internal audit of its finances since the 2009 fiscal year, its top financial adviser said Monday. Michael Ahearn, the corporation’s controller, said the 2010 audit was reassigned because of problems with the external accounting firm handling that audit, and it is now expected to finish in June.
That’s nearly two years after the fiscal year ended in September 2010. No estimate was given for when the 2011 audit will be completed.
The delay drew criticism from lawmakers during the corporation’s budget hearing in City Hall.
“This is something that is absolutely critical that you have to do,” said Ward 1 Councilman Jim Graham, who chairs the committee that oversees the corporation. The corporation is a city-run entity that typically hands out between $15 million and $19 million annually in grants from city funds.
“This is so central to how the agency is operated,” Graham continued, adding that was especially true as the agency had been previously cited for “significant compliance problems.”
Thomas pleaded guilty in January to using $353,000 that the corporation issued to nonprofits to pay for personal items, including cars and vacations. This year, a city auditor warned that a lack of sufficient internal controls “enabled the embezzlement” of those District funds and that more theft could be possible.
The organization was also cited for violating the District’s rules for grant recipients in a 2010 audit on the city’s now-defunct earmarking process.
Ahearn also said that since he joined the organization in the fall of 2010, he has instituted some changes addressing oversight such as requiring approvals for budgeted expenses. But not all the recommendations from the 2009 accounting firm audit had been implemented either by him or his predecessor because the organization isn’t equipped to handle them.
“Some of the recommendations are very difficult to implement because they require larger internal controls in place,” he said.
Legislators said although they supported the corporation’s purpose, the lax financial oversight hurt its goals.
“Obviously we need an audit and then we need a budget [proposal] that shows you’re solvent,” said Ward 6 Councilman Tommy Wells. “Those of us that want to preserve CYITC … need that.”
