Geriatric Authority of Holyoke

This is a Massachusetts State Auditor performance audit of the Geriatric Authority of Holyoke covering January 1, 2010 through June 30, 2012.

“This report details the audit objectives, scope, methodology, findings, and recommendations for the audit period, January 1, 2010 through June 30, 2012.”

Holyoke officials and GAH's board asked for the audit so new board members could understand how the authority was operating and what its financial condition was.

“The Holyoke City Council, in conjunction with the GAH Board of Directors (the Board), requested that the Office of the State Auditor (OSA) perform an audit of GAH in order to provide GAH’s new Board members with a report on GAH’s operations and current fiscal condition.”

The audit matters because the authority provides elder care services and its financial problems could leave it dependent on city support instead of standing on its own.

“Otherwise, GAH’s financial viability will depend on the City’s willingness to continue its financial support.”

For a Holyoke resident or taxpayer, the key issue is that the authority’s problems affected city finances because the city was covering costs and tracking money it said GAH owed.

“This occurred because GAH did not have sufficient revenue to pay all its obligations and relied on the City to pay for certain operating expenses.”

The auditors concluded that GAH lacked adequate controls over money coming in and going out, and did not have efficient, effective procedures.

“Based on our audit, we have concluded that, for the period January 1, 2010 through June 30, 2012, the Authority lacked adequate internal controls over revenues and expenditures and did not establish efficient and effective operating policies and procedures, as described below.”

The auditor recommended that GAH fix its controls, seek more revenue, cut unnecessary costs, and work with city and state officials to resolve the disputed state funding issue.

“GAH and City officials should obtain a legal opinion as to whether the amounts reported by GAH as City appropriations are actually appropriations or are amounts due the City from GAH.”

The report is significant because it describes a public elder-care authority with repeated financial losses, weak safeguards, missed income opportunities, and possible improper state payments.

“During our audit period, GAH’s management and Board of Directors did not effectively manage its financial operations.”

In plain English, 'fixed assets' means things like buildings and equipment that the authority owns and cannot quickly turn into cash.

“Fixed assets, also known as non-current assets or as property, plant, and equipment (PP&E), are assets and property that cannot easily be converted into cash.”