Centro Las Americas Inc.
September 6, 2016 · Read the full official report (PDF) ↗
Published September 6, 2016 Audit covers July 1, 2013 – June 30, 2015 Under Suzanne M. Bump · 2011–2023
source
“Centro charged $57,341 in unallowable administrative expenses against its state contracts.”
Read the plain-English breakdown
This is a Massachusetts State Auditor performance audit of Centro Las Americas Inc., a Worcester nonprofit that provides human services, covering July 1, 2013 through June 30, 2015.
“I am pleased to provide this performance audit of Centro Las Americas Inc.”
The auditor reviewed whether Centro followed certain laws, regulations, and contract rules, including how it handled expenses and some MassHealth claims.
“The purpose of our audit was to determine whether Centro complied with certain laws, regulations, and contractual requirements in the areas reviewed.”
Centro gets a large share of its money from state contracts, so misuse or weak controls over those funds affects public accountability.
“Centro receives approximately half of its funding from contracts with state agencies.”
If you are a Massachusetts taxpayer or someone who depends on human-service programs, the issue is whether public money was spent on services and properly controlled.
“This $57,341 could have been used by Centro’s state contracting agencies to pay for program-related expenses for needy citizens.”
The audit found two main problems: unallowable expenses charged to state contracts and no competitive process for buying the CEO's vehicle.
“Centro did not use a competitive procurement process when it purchased its chief executive officer’s vehicle.”
The auditor recommended that Centro repay the $57,341 and tighten its procedures so nonreimbursable costs and large purchases are handled properly.
“Centro should reimburse the Commonwealth for this $57,341 in nonreimbursable expenses.”
The report says the problems were not just paperwork issues: Centro's controls did not adequately identify costs that should not be paid with state contract funds.
“Centro’s Accounting Department Policy and Procedures Manual requires employees to identify nonreimbursable costs and exclude them from billings against state contracts but does not give guidance as to what costs are nonreimbursable according to OSD regulations.”
Adult foster care means help for eligible elderly or disabled MassHealth members with daily tasks like eating, bathing, dressing, walking, and household needs.
“The Adult Foster Care Program provides elderly or disabled MassHealth members with assistance in performing activities of daily living (ADLs) and instrumental activities of daily living (IADLs).”
1 figure(s) pending source verification - not shown
What the Auditor checked
- Did not comply Did Centro’s adult foster care (AFC) recipients concurrently receive duplicative home health care services?
- Did not comply Did Centro comply with state regulations regarding the processing, payment, and reporting of administrative expenses charged to its state contracts?
- Did not comply Did Centro administer its purchases of goods and services in accordance with state regulations?
What the Auditor found
Why it matters: State contract funds that could have supported program services were used for nonreimbursable expenses, and Centro's financial reports lacked required transparency.
Standard: 808 CMR 1.05; OSD UFR Audit and Preparation Manual; OMB Circular A-122 ( Section 12 of Chapter 11 of the Massachusetts General Laws; 808 CMR 1.05(23); 808 CMR 1.05(26); 808 CMR 1.05(12); 808 CMR 1.05(22); 808 CMR 1.05(10) )
2 recommendations
- Centro should reimburse the Commonwealth for this $57,341 in nonreimbursable expenses.agency: disagreed
- Centro should amend its policies and procedures to ensure that all nonreimbursable expenses are properly identified and reported in its UFRs and that no state funds are used to pay for these expenses.agency: disagreed
Agency response & Auditor reply
Agency: "Finally, in addition to all other required documentation for those expenses, we provided detailed expense reports with copies of all receipts, detailing the reason for the meeting and who the meeting was with, for every such expense and every month of both years audited."
Auditor: "As stated in our report, Centro’s controls over the processing of expenses are inadequate in that its policies and procedures do not provide any guidance as to what expenses cannot be charged to state contracts, and management is not ensuring that any nonreimbursable expenses are effectively identified and classified."
Why it matters: Centro could not be certain that it obtained the best value for the vehicle purchase.
Standard: 808 CMR 1.03(8) ( 808 CMR 1.03(8) )
1 recommendation
- Centro should establish policies and procedures that ensure that it uses a competitive bidding process for purchases of goods and services over $25,000.agency: disagreed
Agency response & Auditor reply
Agency: "The assertion that no process was utilized is inaccurate and is a complete mischaracterization of actual events and of the process that did occur."
Auditor: "Although Centro states that it received prices from at least three potential vendors, it was not able to provide us with documentation to substantiate this assertion."
Verified dollar findings
Money paid out that the audit found should not have been - overpayments, unallowable and nonreimbursable charges, improper claims.