Foundation for Cooperative Housing, Inc (FCH)

support of the Foundation for Cooperative Housing, Inc. (FCH). Audit report covers the period 10/75-9/77 and is based on review of FCH documents and procedures. Based on a review of claims totalling $2,032,112, a $5,499 cost overrun and $70,830 in other claims were questioned. FCH"s controller does not exercise control over the entire accounting operation, and FCH records are inadequate. Moreover, the accounting system is deficient in that: (1) direct costs of domestic operations are not segregated from overhead; (2) direct costs of international operations are not segregated by contract or donor; (3) domestic records are kept on an accrual basis, while international records are on a cash basis; (4) salaries are sometimes charged to one cost center and related travel to another; (5) almost all rent, telephone, and backstopping salary expenses are charged to A.I.D.; (6) unsupported estimates are used to allocate costs to A.I.D.: (7) invoices and related documents are often unavailable; (8) cost data was on one occasion revised without explanation; and (9) financial records and the payroll register show different salary figures. In addition, vacation and leave policies and procedures are applied inequitably and inconsistently. When hiring consultants, FCH does not always pay fair salaries, does not execute written agreements, and has charged advances to A.I.D. at the wrong time. Also, A.I.D."s Office of Housing (AID/OH) has urged FCH to hire specific consultants. FCH does not maintain subsidiary records showing the cost and location of accountable property and has no definition of accountable property. Finally, monthly billings to A.I.D. are prepared from supporting documents (e.g., invoices) rather than from the ledger.