Executive Summary
For Immediate Release
Jan. 7, 2015
Contact: Brian Dries
215-686-8869
Butkovitz Refers Audit Findings to District Attorney for Further Investigation
City Controller says Recreation Centers’ bank accounts at a high risk for impropriety
Review of Recreation Advisory Council’s Bank Accounts
PHILADELPHIA – City Controller Alan Butkovitz today released an audit of the Department of Parks and Recreation’s Advisory Council bank accounts that found select funds of the total $2 million to be at an increased risk for impropriety.
At the Fox Chase Recreation Center, the Advisory Council, which is responsible for managing the individual recreation center’s bank accounts, could not provide any accounting records detailing financial transactions. The former Treasurer never maintained a general ledger for the account, and when she left she took the financial records with her.
“We could not even reconcile the account because of how poorly it was managed by the former Treasurer,” said Butkovitz. “She was the only signer on disbursement checks, had cancelled checks mailed directly to her home address and even signed checks payable to herself.”
After obtaining copies of bank statements for a six month period, auditors did find a beginning cash balance of almost $187,400 and an ending balance of $117,500. In addition, the Controller’s auditors uncovered a computer where it was determined that the former Treasurer was the sole user of it and no one else had the ability to access her user account.
“We have already referred our findings regarding the former Treasurer at Fox Chase to the District Attorney’s Office for further investigation,” said Butkovitz.
According to Controller Butkovitz, the Department of Parks and Recreation was supportive during the audit, but there was a lack of cooperation by representatives of the Advisory Councils from the very start the auditors’ field work.
“This raised our level of skepticism regarding the potential for undetected fraudulent activity involving all of the accounts at the various recreation centers,” said Butkovitz.
Even though the Controller was met with resistance from the Advisory Councils, along with Fox Chase, his auditors were able to examine the financial activity at Vare and Vogt recreation centers. This included finding that Vare’s accounting records had no detail to support expenses.
In addition, a review of sampled cancelled checks, which included 49 at Vare and 52 at Fox Chase, revealed that the checks contained only one Advisory Council officer’s signature instead of two officers’ signatures, as required by the Advisory Council Manual.
“Requiring two signatures assures accountability and reduces the risk of fraud,” said Butkovitz.
According to Controller Butkovitz, to better safeguard the Advisory Council bank accounts, Parks and Recreation management along with Advisory Council officials must improve their oversight of these funds. This includes monthly monitoring to encompass the following:
• Ensuring that the Advisory Council maintains accounting records detailing the receipt and disbursement transactions,
• Reviewing the monthly bank and petty cash reconciliations for accuracy, and
• Examining payments to determine that these expenditures are for the benefit of the facility or its programs.
Controller Butkovitz added, “Parks and Recreation needs to designate staff independent of the recreation facilities and the Advisory Councils with the task of performing periodic site visits to review compliance with the Advisory Manual.”
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The Philadelphia Recreation Advisory Council, known as PRAC, is a partnership between community members and the Department of Parks and Recreation. It is governed by the Advisory Council Manual. The PRAC is the representative body of all local Advisory Councils which were established to serve as vehicles for citizen involvement in the individual Recreation Centers and to help ensure that recreation services are geared to the needs of the community.