Audit of Brockton Area Multi-Services, Inc. (BAMSI)
June 1, 2021 · Brockton Area Multi-Services, Inc. · Read the full official report on mass.gov ↗
Published June 1, 2021 Audit covers July 1, 2017 – June 30, 2019 Under Suzanne M. Bump · 2011–2023
source
“BAMSI charged $11,311 in nonreimbursable expenses to its state contracts.”
Read the plain-English breakdown
This is a Massachusetts State Auditor performance audit of Brockton Area Multi-Services, Inc., covering July 1, 2017 through June 30, 2019, with one hiring review extended through October 31, 2019.
“This report details the audit objectives, scope, methodology, findings, and recommendations for the audit period, July 1, 2017 through June 30, 2019.”
Auditors checked whether BAMSI followed rules for state-funded expenses, executive compensation, board appointments, CEO hiring, and restricted donations.
“In this audit, we determined whether (1) BAMSI’s non-payroll expenses were allowable and in accordance with state regulations, (2) the level of compensation provided to BAMSI’s executive staff was in accordance with state regulations, (3) BAMSI appointed its board members in accordance with its bylaws, (4) BAMSI followed its procedures when hiring its new president and chief executive officer (CEO), and (5) BAMSI spent its received donations in accordance with any applicable donor restrictions.”
The report says money charged improperly to state contracts could have been used for services for people in state-funded programs.
“BAMSI could have used this $11,311 to pay for reimbursable expenses to benefit the clients in its state-funded programs.”
If you live in a community served by BAMSI, this matters because the organization provides human services to many people across several Massachusetts counties.
“It operates adult, child, and family services (see Appendix A and Appendix B), assisting approximately 30,000 individuals each year in Worcester, Middlesex, Norfolk, Bristol, and Plymouth Counties.”
The auditor did not say BAMSI failed everything: CEO hiring passed, but the audit found problems with costs, inventory, board appointment records, and donations.
“Did BAMSI follow its procedure for hiring the new president and CEO?”
BAMSI is expected to work with the state Operational Services Division and repay any costs that the state determines must be returned.
“BAMSI should cooperate with OSD to resolve the identified issues regarding $11,311 of nonreimbursable costs and should reimburse the Commonwealth for any such costs that OSD determines must be repaid.”
A restricted donation means the donor gave money for a specific purpose, so BAMSI cannot treat it like general-use money.
“Restricted donations can only be spent on programs or items in accordance with the donors’ instructions; unrestricted donations have no stipulations from donors about how they can be spent.”
8 figure(s) pending source verification - not shown
What the Auditor checked
- Did not comply Are BAMSI’s non-payroll contract expenses compliant with Sections 1.04 and 1.05 of Title 808 of the Code of Massachusetts Regulations (CMR) as well as the terms and conditions of its state contracts?
- Partially Is the compensation (including salaries and fringe benefits) that is provided to BAMSI’s executive management team compliant with 808 CMR 1.05(5), 808 CMR 1.05(9), and 808 CMR 1.05(24), as well as established agency policies and procedures?
- Did not comply Does BAMSI follow its bylaws and policies for board appointments?
- Complied Did BAMSI follow its procedure for hiring the new president and CEO?
- Did not comply Are restricted cash donations expended in accordance with donors’ restrictions?
What the Auditor found
Why it matters: State contract funds were used for undocumented, unallowable, or non-program expenses instead of reimbursable expenses benefiting clients in state-funded programs.
Standard: 808 CMR 1.05(9)(a), Appendix B of 2 CFR 230, 808 CMR 1.02, 808 CMR 1.04(1), 808 CMR 1.05(26), and 808 CMR 1.05(23). ( Section 1.05(9)(a) of Title 808 of the Code of Massachusetts Regulations; Paragraph (8)(g)(4) of Appendix B of Part 230 of Title 2 of the Code of Federal Regulations; 808 CMR 1.02; Section 6(e) of Chapter 64H of the Massachusetts General Laws; 808 CMR 1.04(1); 808 CMR 1.05(26); Paragraph (8)(h)(4) of Appendix B of 2 CFR 230; 808 CMR 1.05(23) )
2 recommendations
- BAMSI should cooperate with OSD to resolve the identified issues regarding $11,311 of nonreimbursable costs and should reimburse the Commonwealth for any such costs that OSD determines must be repaid.agency: agreed
- BAMSI should implement internal controls to ensure that its staff reviews all the president and CEO’s expenses for reasonableness and allowability before they are paid.agency: already implemented
Agency response & Auditor reply
Agency: "BAMSI agrees to cooperate with OSD to reimburse the Commonwealth for any costs that OSD determines must be repaid."
Auditor: "Based on its response, BAMSI is taking measures to address our concerns in this area."
Why it matters: Fixed assets were at higher risk of theft and misuse because inventory records were incomplete and physical inventories were not performed.
Standard: OSD’s General Audit and Compliance Requirements; Office of the Comptroller and OSD Fixed Assets—Acquisition Policy; BAMSI’s Department of Developmental Services contract. ( OSD’s General Audit and Compliance Requirements; Office of the Comptroller of the Commonwealth and OSD Fixed Assets—Acquisition Policy; BAMSI’s contract with Department of Developmental Services )
2 recommendations
- BAMSI should establish policies and procedures to accurately record purchases, maintain inventory, and record disposals of non-capital fixed assets that have been charged to state programs.agency: already implemented
- BAMSI should perform an annual physical inventory of these assets to reconcile assets on hand to what is recorded in the inventory.agency: agreed
Agency response & Auditor reply
Agency: "BAMSI has instituted policies and procedures that strengthen internal controls regarding the purchasing and tracking of non-capital fixed assets charged to state programs."
Auditor: "Based on its response, BAMSI is taking measures to address our concerns in this area."
Why it matters: The board affairs committee might not have been aware of all applicants, rejected applicants might not know why they were not accepted, and a board member could be appointed without a completed criminal record review.
Standard: Article VIII, Section 2 of BAMSI’s bylaws and the board’s Policy for Selection of a New Board Member. ( Section 2 of Article VIII of BAMSI’s bylaws; Policy for Selection of a New Board Member )
3 recommendations
- BAMSI should develop and implement a procedure to ensure that all applicants complete applications, should document the notification of rejections sent to rejected applicants, and should perform CORI reviews before newly appointed board members attend meetings.agency: already implemented
- BAMSI should update its board application website software to ensure that the software notifies the chairperson of the board affairs committee when an application is received.agency: already implemented
- BAMSI should maintain a log of applicants to ensure that the board affairs committee has received all applications.
Agency response & Auditor reply
Agency: "BAMSI has instituted new policies [and] procedures for interviewing potential new board members, onboarding new board members and the resignation of current board members."
Auditor: "Based on its response, BAMSI is taking measures to address our concerns in this area: it is implementing procedures for the board application process and has updated its application software."
Why it matters: There was a higher risk that restricted donations might not be used for their intended purposes.
Standard: BAMSI’s Incoming Gifts and Donations Policy. ( BAMSI’s Incoming Gifts and Donations Policy )
1 recommendation
- BAMSI should establish monitoring controls to ensure that it sends donor acknowledgment letters for all donations received and properly records donations with restrictions.agency: already implemented
Agency response & Auditor reply
Agency: "BAMSI implemented a new donation tracking software (Donor Perfect) which will provide Philanthropy with better documentation for all donations and donors."
Auditor: "Based on its response, BAMSI is taking measures to address our concerns in this area."
Verified dollar findings
Money paid out that the audit found should not have been - overpayments, unallowable and nonreimbursable charges, improper claims.
Identified dollar findings that do not fall in a named band.
More audits of this entity
Other Office of the State Auditor reports on Brockton Area Multi-Services, Inc. .
- Brockton Area Multi-Services, Inc.Nonprofit / Vendor · May 14, 2015