The City of New York
Office of the Comptroller
Bureau of Financial Audit
ALAN G. HEVESI
Comptroller
Audit Report on the
Financial Practices of the
Center for Animal Care and Control
FM98-093A
June 30, 1998
EXECUTIVE SUMMARY
Background
The Center for Animal Care and Control (CACC) is a not-for-profit institution incorporated under section 402 of the New York State Not-for Profit Corporation Law. On September 1, 1994, CACC succeeded the American Society for the Prevention of Cruelty to Animals (ASPCA) as New York City's provider of animal care and control services. Pursuant to its contract with New York City's Department of Health (DOH), CACC provides animal capture, seizure, rescue, adoption, and disposition services to control the population of lost, stray, and abandoned animals in the City. CACC operates three animal shelters and two receiving centers, and provides Animal Rescue Services throughout New York City.
CACC's operations are monitored by DOH's Bureau of Veterinary Public Health Services. In this connection, DOH prepares and approves a line item operating budget at the start of each calendar year and requires CACC to submit monthly financial reports to DOH. During calendar year 1997, CACC had a total budget of $5.4 million. To finance CACC's budget, the City provided $5.1 million; the remaining $300,000 was funded from CACC's shelter revenues (i.e., adoption fees). In addition, CACC accepts donations from the public and participates in fund-raising activities and events.
Objectives, Scope, and Methodology
To review CACC's internal controls, we interviewed CACC personnel to obtain an understanding of its procedures related to processing, recording, and reporting revenue and expenses. Based on the information gathered during interviews and our understanding of CACC's accounting systems, we developed detailed audit procedures to determine whether:
Our specific audit tests are discussed in detail on pages 3-6 of this report.
In addition, during the course of our audit, CACC officials informed us of a DOH practice that delays the timely release of animals that have bitten humans or other animals. CACC refers to these cases as "bite holding cases." According to CACC officials, these delays caused CACC to incur extra boarding fees. To determine whether this was a valid claim, we analyzed a random sample of cases where animals were held by CACC 13 days or longer (allowing two additional days for weekends and holidays) in calendar year 1997 and calculated the related boarding costs.
In addition, during the audit, we were asked to investigate whether donations included with dog license applications received by DOH were being forwarded to CACC. We surveyed 100 dog owners who submitted applications to DOH to determine whether they expected their donations to be used by DOH, CACC, or some other recipient.
This audit was conducted in accordance with Generally Accepted Government Auditing Standards (GAGAS) and included such tests of records and other auditing procedures considered necessary. The audit was conducted in accordance with the City Comptroller's audit responsibilities as set forth in Chapter 5, Section 93, of the New York City Charter.
Results in Brief
Our audit found that CACC generally adhered to the provisions of its contract with DOH. CACC received approximately $5 million in City funding, and $479,000 in shelter revenues during calendar year 1997. We found that CACC expended these funds in accordance with the DOH approved budget. We also found that CACC spent $89,000 in restricted grants reasonably and in compliance with the guidelines governing these funds. Specifically, based on our review of CACC's financial records related to its revenue for calendar year 1997, we conclude that:
Our review of CACC's 1997 OTPS expenditures concluded that:
Based on our observations and a review of CACC's payroll and timekeeping documentation for the month of September 1997, we conclude that:
However, we found that CACC spent $42,000 of its $157,000 in unrestricted private funds to lease a private parking lot for its customers. We also noted that another lot of equal size, which is City-owned, is available for customer parking. Instead, CACC apparently decided to use the City-owned parking lot to provide its employees with parking for their personal vehicles. In essence, CACC is spending $42,000 a year so the lot provided by the City can be used to provide parking for CACC's employees. In addition, on March 5, 1998, CACC submitted a budget modification to DOH for approval to allocate $42,000 of its City funds for the leasing costs incurred during calendar year 1997. To justify this expense, CACC indicated that the lot was to be used to store CACC's animal rescue vehicles. However, according to CACC officials, CACC's vehicles are stored in the City-owned lot adjacent to the Brooklyn shelter.
We also noted that CACC did not comply with various provisions of its contract. Specifically, CACC violated its contract by: (1) not requiring individuals adopting dogs to submit applications and related fees for dog licenses, (2) not soliciting a minimum of three bids and not obtaining DOH's pre-approval for repair and maintenance expenses over $500, and (3) not submitting quarterly revenue reports to DOH.
In addition, during our review we identified delays in DOH's processing of cases involving animals that were being held and examined for rabies at CACC's shelters. It should be noted that these delays were not caused by CACC. However, we decided to report on this issue since the delays resulted in CACC providing additional boarding days for animals involved in bite holding cases, and incurring additional boarding costs during calendar year 1997.
We also noted that DOH received donations from dog owners totaling $43,108 in 1996 and $33,596 in 1997. According to DOH officials, these donations were deposited in the City's General fund and were not specifically designated for animal care and control programs. However, we found that most dog owners who made donations to DOH were under the impression that their donations would be designated for animal care.
Recommendations
Auditee's and DOH's Responses
The matters covered in this report were discussed with CACC and DOH officials during, and at the conclusion of, this audit. A preliminary draft report was sent and discussed with CACC and DOH at exit conferences held May 20 and May 21, 1998, respectively. On May 22, 1998, we submitted a draft report to CACC and DOH officials with a request for comments. We received written responses from CACC and DOH on June 9, 1998. CACC and DOH generally agreed with the report's findings and recommendations. In fact, they have taken certain steps to address seven of the eight recommendations. However, it should be noted that CACC disagreed with our finding and recommendations related to CACC's lease of a parking lot. CACC stated that the lot is necessary to provide parking for its customers. Although CACC still believes that the City should cover the rent payments for the lot, CACC indicated that it will not charge the City for this expense.
The full text of the written comments received from CACC and DOH are included as addenda to this report.
Table of Contents
INTRODUCTION
Background
Objective
Scope and Methodology
Auditee's and DOH's Responses
FINDINGS AND RECOMMENDATIONS
Use Of $42,000 in Private Funds to Lease a Parking Lot
Recommendations 1
Recommendations 2CACC Does Not Require Individuals Adopting Dogs to Submit Applications for Dog Licenses
Recommendation 3CACC Did Not Adhere to Terms of its Contract for Certain Repair And Maintenance Expenses
Recommendations 4 and 5CACC Does Not Report Revenue to DOH
Recommendation 6Other Issues
Delays in DOH's Processing of Bite Holding Case
Recommendation 7DOH's use of Private Donations
Recommendation 8Addendum I - CACC's Response
Addendum II - DOH's Response
The City of New York
Office of the Comptroller
Bureau of Financial Audit
Audit Report on the
Financial Practices of the
Center for Animal Care and Control
FM98-093A
INTRODUCTION
Background
The Center for Animal Care and Control (CACC) is a not-for profit institution incorporated under section 402 of the New York State Not-for Profit Corporation Law. On September 1, 1994, CACC succeeded the American Society for the Prevention of Cruelty to Animals (ASPCA) as New York City's provider of animal care and control services. Pursuant to its contract with DOH, CACC provides animal capture, seizure, rescue, adoption, and disposition services to control the population of lost, stray, and abandoned animals in the City.
CACC operates three animal shelters and two receiving centers located throughout New York City. The shelters and receiving centers, operated and maintained by CACC, are owned by the City. The three animal shelters, which are located in Manhattan, Brooklyn, and Staten Island, offer animal intake and adoption services and are equipped to house animals overnight. CACC's two receiving centers, which are located in the Bronx and Queens, are storefront facilities that only offer animal intake and adoption services. Therefore, any animal received at these centers during the day must be transported to one of CACC's animal shelters for overnight stay.
In addition to animal intake and adoption services, CACC provides Animal Rescue Services. CACC's Rescue Unit, based in the Brooklyn shelter, is equipped with 11 rescue vans servicing all five boroughs. Dispatchers and drivers are on call Monday through Friday, from 8:00 a.m. to 8:00 p.m., responding to calls requesting pickup of stray, sick, injured, or dangerous animals.
During calendar year 1997, CACC had a total budget of $5.4 million. To finance CACC's budget, the City provided $5.1 million; the remaining $300,000 was funded from CACC's shelter revenues (i.e., adoption fees). In addition, CACC accepts donations from the public and participates in fund raising activities and events.
CACC's operations are monitored by the New York City Department of Health's (DOH~ Bureau of Veterinary Public Health Services. The Bureau of Veterinary Public Health Services administers various programs relating to animals in New York City and monitors CACC's compliance with the terms of its contract with the City. In this connection, DOH prepares and approves a line item operating budget at the start of each calendar year. CACC is required to submit monthly financial reports to DOH. These reports contain the monthly and year-to-date contract expenses in relation to the budgeted amounts. CACC is also required to submit quarterly revenue reports to DOH detailing all revenue and income generated by CACC during the period.
At the end of each calendar year, two independent audits are performed by certified public accounting firms on the financial practices of CACC. The first audit determines whether CACC's financial statements fairly present the financial position of CACC. The second audit is performed at the request of DOH. Specifically, DOH contracts with a CPA firm to review CACC's financial position and verify that the records support the expenses reported to DOH during the year.
Objectives
Our objectives were to determine whether:
Scope and Methodology
To review CACC's internal controls, we interviewed CACC personnel to obtain an understanding of its procedures related to processing, recording, and reporting revenue and expenses. Based on the information gathered during the interviews and our understanding of CACC's accounting systems and procedures, we developed detailed audit procedures, as discussed below.
Revenues
We determined whether CACC's revenue for calendar year 1997 was deposited timely and into the appropriate bank account. We verified that City funds released to CACC were deposited into a money market account, in accordance with contract requirements. In this connection, we traced all City funds to CACC's bank statements. We then traced the deposited amounts to the amounts posted to CACC's General Ledger.
We also determined whether all revenue generated at the shelters was deposited into CACC's accounts. To accomplish this, we obtained CACC's Cash Receipt Count forms and cash register tapes prepared by each shelter for the third quarter of 1997. We compared the amounts listed on the Cash Receipt Count forms to the amounts on the cash register receipts. We then traced the amounts listed on the Cash Receipt Count forms to the deposits made into CACC's accounts, as reported on the bank statements.
To determine whether restricted grants were properly recorded and expended in accordance with grant terms, we obtained copies of the grant letters, donor checks, invoices, and budgets for calendar year 1997. We verified that donor checks were properly deposited and recorded by CACC. We reviewed the terms of restricted grants and all invoices associated with specific grants to ensure that monies were spent in accordance with grantors' specifications. We also reviewed CACC's use of unrestricted private funds it received during calendar year 1997.
Other Than Personnel Services
To determine whether CACC's Other than Personnel Service (OTPS) costs were properly authorized and recorded, we obtained from CACC's Controller a detailed transaction list containing vendors and payment information for the third quarter of 1997. This list showed that CACC processed 436 OTPS transactions (excluding repairs, maintenance, and consulting) during the third quarter of 1997. We randomly selected a sample of 42 transactions for review. For each sampled transaction, we obtained purchase orders, supporting invoices, receiving reports, and canceled checks. We examined invoices for payment authorization and
cancellation, reviewed canceled checks for proper endorsements, and traced expense amounts to the general ledger to determine whether they were properly classified and recorded. In addition, we reconciled the amounts listed on the activity reports sent to DOH to amounts posted to CACC ' s general ledger.
Personnel Services
To determine the accuracy of CACC's Personnel Service (PS) costs, we obtained a list of authorized personnel from CACC's Human Resource Director, employee timesheets from CACC's Payroll Clerk and payroll registers for the month of September 1997 from CACC's Controller. We recalculated the number of hours worked as indicated on the timesheets for all CACC employees and traced these figures to the hours reported on the payroll registers to ensure that employees were only paid for hours actually worked. Furthermore, we compared personnel records to the names on the payroll registers to verify that only active employees were paid. In addition, we obtained a copy of the union agreement defining overtime rates and holiday pay for union employees. We analyzed amounts paid for overtime and holiday time to ensure that these amounts were calculated in accordance with the union agreement.
To determine whether persons reportedly working at CACC facilities were bona fide employees, we made an unannounced visit to the Brooklyn Shelter and Animal Rescue unit on January 23, 1998. We requested picture identification cards for all employees at the facility. We then compared the names on the identification cards to the names listed on CACC's personnel roster, which we obtained from CACC ' s personnel director.
Contractual Requirements
We met with CACC officials and reviewed certain financial documents to determine whether CACC complied with its agreements in relation to:
To determine whether CACC obtained the minimum number of bids and the necessary DOH approvals for repairs and maintenance expenses, we reviewed documentation related to all purchases processed during the period January through September 1997.
To determine whether CACC accurately reports expenses to DOH on a monthly basis, we obtained CACC's Monthly Activity Reports submitted to DOH for the third quarter of 1997 and traced the reported amounts to the general ledger.
In addition, we interviewed CACC shelter directors and other CACC officials to determine whether CACC required individuals who are adopting dogs to fill out dog license applications and pay the to CACC.
We met with CACC's Controller and requested copies of quarterly financial reports submitted by CACC to determine whether they were reporting revenues in accordance with the contract requirements.
Finally, to determine whether CACC obtained the required insurance bond to protect it against employee theft, we reviewed its bond policy and contacted the insurance company to confirm that CACC maintained the required coverage.
Other Issues
During the course of our audit, CACC officials informed us that DOH did not approve the timely release of animals that had bitten humans, or other animals. CACC refers to these cases as "bite holding cases". According to CACC officials, these delays caused CACC to incur extra boarding fees. To determine whether this was the case, we obtained a listing from both DOH and CACC of all bite holding cases processed during calendar year 1997. With the assistance of our statistician, we selected a random sample of bite holding cases for review. We analyzed those cases where animals were held by CACC 13 days or longer (allowing two additional days for weekends and holidays) and determined the related boarding costs.
In addition, during the audit, we were asked to investigate whether donations included with dog license applications received by DOH were being forwarded to CACC. In this connection, we obtained a computer file from DOH containing a list of dog owners who submitted dog license applications to DOH during calendar years 1996 and 1997. Our EDP unit provided us with two random samples of dog owners that remitted donations with their licensing fees to DOH. One sample consisted of 50 dog owners who submitted applications to DOH in 1996; the second sample consisted of 50 dog owners who submitted applications to DOH in 1997. We then surveyed the 100 dog owners to determine the purpose of their donations (i.e., whether they expected their donations to be used by DOH, CACC, or some other recipient).
* * * * *
This audit was conducted in accordance with Generally Accepted Government Auditing Standards (GAGAS) and included such tests of records and other auditing procedures considered necessary. The audit was conducted in accordance with the City Comptroller's audit responsibilities as set forth in Chapter 5, Section 93, of the New York City Charter.
Auditee's and DOH's Responses
The matters covered in this report were discussed with CACC and DOH officials during, and at the conclusion of this audit. A preliminary draft report was sent and discussed with CACC and DOH at exit conferences held May 20 and May 21, 1998, respectively. On May 22, 1998, we submitted a draft report to CACC and DOH officials with a request for comments. We received written responses from CACC and DOH on June 9, 1998. CACC and DOH generally agreed with the report-s findings and recommendations. In fact, they have taken certain steps to address seven of the eight recommendations. However, it should be noted that CACC disagreed with our finding and recommendations related to CACC's lease of a parking lot. CACC stated that the lot is necessary to provide parking for its customers. Although CACC still believes that the City should cover the rent payments for the lot, CACC indicated that it will not charge the City for this expense.
The full text of the written comments received from CACC and DOH are included as addenda to this report.
OFFICE OF THE COMPTROLLER
NEW YORK CITY
DATE FILED: June 30, 1998
FINDINGS AND RECOMMENDATIONS
Our audit found that CACC generally adhered to the provisions of its contract with DOH. CACC received approximately $5 million in City funding, and $479,000 in shelter revenues during calendar year 1997. We found that CACC expended these funds in accordance with the DOH approved budget. We also found that CACC spent $89,000 in restricted grants reasonably and in compliance with the guidelines governing these funds. Specifically, based on our review of CACC's financial records related to its revenue for calendar year 1997, we conclude that:
Our review of CACC's 1997 OTPS expenditures concluded that:
Based on our observations and a review of CACC's payroll and timekeepinq documentation for the month of September 1997. we conclude that:
However, we found that CACC used a City-owned lot to provide parking for its employees. As a result, CACC had to spend $42,000 of its $157,000 in unrestricted private funds to lease a separate parking lot for CACC customers. We also noted that CACC is not complying with various provisions of its contract. Specifically, CACC violated its contract by not: (1) requiring individuals adopting dogs to submit applications and related fees for dog licenses, (2) soliciting a minimum of three bids and not obtaining DOH's pre-approval for repair and maintenance expenses over $500, and (3) submitting quarterly revenue reports to DOH.
In addition, during our review we identified delays in DOH's processing of cases involving animals that were being held and examined for rabies at CACC's shelters. It should be noted that these delays were not caused by CACC. However, we decided to report on this issue since the delays resulted in CACC providing additional boarding days for animals involved in bite holding cases, and incurring additional boarding costs during calendar year 1997.
We also noted that DOH received donations from dog owners totaling $43,108 in 1996 and $33,596 in 1997. According to DOH officials, these donations were deposited in the City's General fund and were not specifically designated for animal care and control programs. However, we found that most dog owners who made donations to DOH were under the misconception that their donations would be designated for animal care.
These issues are discussed in greater detail in the next sections of this report.
Use of $42,000 in Private Funds to Lease a Parking Lot
We found that during calendar year 1997, CACC spent $42,000 (27 percent) of its $157,000 in unrestricted private funds to lease a parking lot adjacent to CACC's Brooklyn shelter. According to CACC officials, the lot was leased to provide CACC's customers with parking for their vehicles.
During our visits to CACC's Brooklyn shelter we noted that the leased lot was not used to provide customer parking. Instead, the lot was used to house a trailer and vehicles belonging to a contractor who was renovating the Brooklyn shelter. We also noted that another lot of equal size, which is City-owned, is available to CACC for customer parking. However, CACC apparently decided to use the City-owned parking lot to provide its employees with parking for their personal vehicles. In essence, CACC is spending $42,000 a year so the lot provided by the City can be used to provide parking for CACC's employees. In total, for the 46-month term of the lease, CACC will spend $165,100 of CACC's private funds for this leased property. We believe that this is a wasteful use of CACC's limited resources.
Even more disturbing, CACC has recently decided that the City should cover the costs of the leased lot. In this connection, on March 5, 1998, CACC submitted a budget modification to DOH for approval to allocate $42,000 of its City funds for the leasing costs incurred during calendar year 1997. To justify this expense, CACC indicated that the lot was to be used to store CACC's animal rescue vehicles. However, according to CACC officials, CACC's vehicles are stored in the City-owned lot adjacent to the Brooklyn shelter.
Overall, we are concerned with CACC's decision to allocate some of its limited resources to provide parking for its employees. We believe that CACC~s funds, both private and City, would be better spent on items directly related to caring for the animals housed at CACC's facilities.
Recommendations
1. CACC should not renegotiate the lease for the private lot. /1
Auditee's Response: CACC disagreed with this recommendation. CACC's response stated: CACC believes that this space is necessary as the adjacent area does not provide adequate or safe parking for customers. Although during the construction period it would be unwise and unsafe to allow customers to park in that lot, CACC fully intends to reopen the lot to customers when the construction is completed."
Auditors' Comments: We disagree with CACC's contention that the private lot is necessary for its customers. Our audit established that a City-owned lot has been made available for CACC to provide parking for its customers. However, as stated in this report, CACC decided to use the City-owned parking lot for employee parking. Essentially, in 1997 CACC spent $42,000 in private funds to provide on-site parking for its employees. We believe that it would be more appropriate for CACC to spend these funds on the animals housed in its facilities. In this connection, CACC should reconsider our recommendation and not renegotiate the lease for the private lot.
2. DOH should not approve CACC's budget modification for reimbursement of the lease costs associated with the private lot.
Auditee's and DOH's Responses: Although CACC officials believe the City should cover the lease under the contract, CACC removed this expense in its Revised Budget Modification. CACC stated: ~The leasing of the parking lot is an expense that the City should cover under the contract. The lot was originally leased to provide parking for CACC customers. However, when the City began its renovation of the City owned facility, it deemed it necessary to house a construction trailer in the lot. Considering that the City made this decision, it follows that the costs should be covered. That being said, it should be noted that CACC removed this expense in the revised budget modification dated April 17."
DOH officials responded that: "No DOH action is necessary as CACC withdrew its request for DOH to reimburse lease costs associated with the private lot."
CACC Does Not Require Individuals Adopting Dogs
to Submit Applications for Dog Licenses
We found that CACC does not require its customers to submit applications and to pay the related dog licenses fees when they adopt dogs from CACC. Thus, CACC is not in compliance with the Fourth Amendment of its contract, which became effective January 1, 1997. Specifically, the Fourth Amendment states that CACC:
". . . shall require each person adopting a dog to submit a dog license application and pay all required dog licensing fees . . · . /2
CACC did not adhere to this provision of the contract, during calendar year 1997. However, it should be noted that at our exit conference on May 20, 1998, CACC officials stated that although the Fourth Amendment indicates a January 1, 1997 effective date, they did not sign the Amendment until July 3, 1997. Thus, CACC contends that they did not know about this requirement until July 3, 1997. Assuming CACC was required to adhere to this provision retroactively to January 1997, CACC inappropriately allowed individuals to adopt 3,649 unlicensed dogs from the shelter facilities. It should also be noted that the related fees, if collected by CACC, would have amounted to approximately $31,000. /3 Assuming CACC was not required to adhere to this provision until July 3, 1997, CACC inappropriately allowed individuals to adopt 1,775 unlicensed dogs from the shelter facilities and failed to collect $15,087
City dog licensing requirements were established to provide for the licensing and identification of dogs, and for the control and protection of the dog population. In this connection, CACC needs to make every effort to ensure that all individuals file dog license applications before they are allowed to adopt dogs from the shelter facilities. This requirement will help ensure that these dogs, if they are ever lost, can be returned to their rightful owners, which could ultimately reduce the number of stray animals in New York City.
Recommendation
3. CACC should ensure that all shelter personnel require individuals adopting dogs to submit applications for dog licenses, in accordance with CACC's contract.
Auditee's and DOH's Responses: CACC officials agreed and stated: "The application materials and the waiver forms were not supplied to CACC by the Department (NYC DOH) until April 30, 1998 . . . . Currently CACC, after receiving the materials from DOH on April 30,1998, has written a corporate protocol and has scheduled a meeting with shelter staff (May 28, 1998) to discuss and finalize the procedures. CACC intends to implement a procedure, in compliance with contract requirements, in June 1998."
In its response, DOH stated that it 'will be monitoring CACC's and pet shops' sales of dog licenses as of July 1, 1998."
Auditors' Comments: Given the importance of the City's dog licensing requirements, we are surprised that it took DOH nearly 11 months to provide CACC with the application materials and waiver forms. This delay resulted in CACC allowing individuals to adopt 3,649 unlicensed dogs from the shelter facilities. In any case, we strongly recommend that DOH work closely with CACC officials to ensure that all individuals submit dog license applications with the related fees to CACC before they are allowed to adopt any dogs from the shelter facilities.
CACC Did Not Adhere to Terms of its Contract
for Certain Repair And Maintenance Expenses
We found that CACC did not process certain repair and maintenance expenses, in accordance with the terms of the contract. Specifically, the contract states that:
"The Corporation (CACC) shall solicit at least three bids for all repairs costing the City more than $500, except emergency repairs costing the City no more than $1,000-"
We found that CACC did not comply with this requirement. Our review of 266 invoices issued between January 1 and September 30, 1997, found 26 invoices for repair and maintenance charges that were in excess of $500. Fifteen invoices did not require bidding since they were emergency purchases under $1,000. However, for the remaining 11 invoices, CACC should have obtained at least three bids.
We also noted that CACC failed to obtain DOH approval for these 11 purchases, in accordance with the contract, which states:
"individual repairs . . . more than $500 must be approved in writing in advance by the department except in the case of emergency repairs, costing the city no more than $1, 000 . "
Recommendations
4. CACC should ensure that at least three bids are received for all repairs costing more than $500 ($1,000 in the case of emergency repairs) that are being charged to the City.
5. CACC should obtain prior approval from DOH before processing the purchases related to the above-mentioned repairs.
Auditee's and DOH's Responses: CACC officials stated that: "Although CACC agrees that eleven instances did not receive the proper approvals, there are some extenuating circumstances as to why." Furthermore, "CACC felt, and DOH concurred, that the $1,000 threshold was too low. Consequently, the 1998 (dated January 1, 1998) contract threshold was increased to $2,500 and all six of the 1997 emergency repairs were under that figure." In addition, "CACC underwent a change in its financial staff in the third quarter of 1997. Since then, CACC has complied with the contractual requirements."
DOH stated: "[It] recognized the hindrance imposed on CACC's daily operations by requiring at least three bids for all repairs costing more than $500 and $1,000 in the case of emergency repairs." Furthermore, "[I]n February 1998, the Bureau of Veterinary Public Health Services hired a new Contract Monitor who thoroughly reviews CACC's Financial Reports and notifies them of disallowed expenses. The Contract Monitor also responds promptly to CACC requests for prior approval."
CACC Does Not Report Revenue to DOH
CACC did not submit quarterly reports showing its revenue (both City and private) to DOH, in accordance with the contract, which states that:
"All income or revenue of any kind, irrespective of source, whether earned, donated or otherwise acquired by the Contractor . . . shall be itemized and reported to the Department quarterly."
Quarterly revenue reports would allow DOH to closely monitor CACC and ensure that it is generating sufficient revenue to cover its operating expenses.
Recommendation
6. CACC should submit Quarterly revenue reports listing all sources of revenue in a form approved by DOH.
Auditee's and DOH's Responses: CACC officials stated that they "[have] submitted the required revenue reports since the fourth quarter of 1997."
DOH stated: " CACC began submitting revenue reports to DOH starting with the calendar 1997 report and the information has been included in their 1998 Quarterly Revenue Report in an acceptable format."
Other Issues
The issues discussed in this section of the report represent weaknesses within DOH that directly impact upon CACC's operation.
Delays in DOH's Processing of Bite Holding Cases
We found delays in DOH's processing of cases involving animals that were being held in CACC's shelters to be examined for rabies. As a result, CACC had to board certain animals for extended periods of time, which is a burden on CACC's shelters since they have only limited space for the many animals they provide shelter for. In addition, these delays resulted in CACC spending a projected $14,575 in additional boarding costs during calendar year 1997.
Section 11.65 of the New York City Health Code states:
". . . when a person is bitten by a dog or other animal subject to rabies,. . . .The person who owns, possesses or controls the animal shall be required to confine and observe the animal in custody for a period of ten days."
To comply with the New York City Health Code, DOH'S Bureau of Veterinary Public Health Services dispatches a New York State Licensed Veterinarian from its staff to examine all animals involved in bite holding cases housed at CACC's shelters. Concurrently, CACC's veterinarians (who are also New York State Licensed Veterinarians) examine the animals, treat them for illnesses, and observe them daily. However, CACC~s veterinarians are not approved by DOH to declare animals ~rabies-free" and to authorize their release. DOH requires that a veterinarian (employed by DOH) see each animal at least twice before DOH can declare the animal "rabies-free" and authorize the release of the animal. In cases involving administrative holds, CACC may be required to retain the animals beyond 10 days. /4
We reviewed 282 of the 1,963 bite holding cases processed by DOH during calendar year 1997. We found that in 61 of the cases the animals were held by CACC for 13 days or longer. (To be conservative, we included two additional days beyond the normal 10 day holding period to allow for weekends and holidays.) Of these 61 cases, 23 involved administrative holds that justified the additional boarding days. The remaining 38 animals had to be held at CACC's shelters for extended periods of time because CACC could not release the animals until they were declared "rabies-free" by a DOH veterinarian. Based on these results, we project that DOH's delay in processing bite holding cases resulted in CACC providing an additional 972 boarding days for animals involved in bite holding cases, and incurring an additional $14,575 in related boarding costs during calendar year 1997. /5
Given its limited resources, CACC needs to work closely with DOH to ensure that bite holding cases are processed in a timely manner. By minimizing processing delays on these cases, CACC will have more resources and space available at its facilities to provide food and shelter for the thousands of stray and abandoned animals in New York City.
Recommendation
7. DOH should work closely with CACC to process bite holding cases within 10 days. In this connection, DOH should consider allowing CACC's New York State Licensed Veterinarians to determine whether the animals are ~rabies-free~ and to authorize their release or hire an additional veterinarian.
DOH's Response: DOH officials stated: "DOH has begun to work closer with CACC to process bite holding cases immediately after the required ten day time period needed to observe the health status of biting dogs and cats. As of April 13, 1998, DOH computerized all CACC holding cases to better track these biting animals. A pilot is being conducted to review the effectiveness of this tracking system through June 30, 1998."
DOH disagreed with allowing CACC's Veterinarians to determine whether the animals are rabies-free. DOH officials stated they "believe that the determination that an animal is rabies free is a public health function which should not be delegated. Instead, we have taken the following action. The Department has issued a posting, dated May 8, 1998, to hire a City Veterinarian (P/T) in order to increase our capacity to inspect and observe biting animals at the CACC Brooklyn and Manhattan Shelters."
DOH's Use of Private Donations
DOH solicits donations from the public when it renews or issues dog licenses. DOH received donations totaling $43,108 in 1996 and $33,596 in 1997. According to DOH officials, these donations were not specifically designated for any animal care and control program. Instead, the donations were deposited in the City's General Fund. However, we found that most dog owners who made donations to DOH expected that their donations would be designated for animal care.
During our review, we noted that DOH's 1995 dog license renewal application requested donations for animal control programs. Specifically, the form states: "You may continue to help support NYC's animal control programs by including your donation with your license fee payment." This statement was not imprinted on DOH's 1996 or 1997 dog license applications.
While the 1996 and 1997 dog license applications do not indicate how donations will be used by DOH, we found that most dog owners are under the impression that their donations would be used to fund the City's animal care and control efforts. Specifically, 68 of the 100 dog owners surveyed stated that they expected their donations to be used for animal care and control programs. Thirty one of the dog owners surveyed indicated that they did not have a specific recipient in mind for their donations. Only one of the dog owners surveyed indicated that he wanted his donation to go to DOH.
It should be noted that it is legal for DOH to deposit donations from dog owners into the City's General Fund. However, given the results of our survey, we believe that it would be more appropriate for DOH to designate these funds for animal care and control. Alternatively, DOH should make sure donors know that donated funds are for DOH/City, not CACC.
Recommendation
8. DOH should forward to CACC all private donations received with dog license applications. If DOH decides not to forward the donations, DOH should include a statement on the dog license applications indicating that the donated funds are for DOH/City, not CACC.
DOH's Response: In response to this recommendation, DOH stated: we have taken alternative action. Effective February 4, 1998, the DOH Bureau of Veterinary Public Health Services has deleted the word 'DONATION' from all dog license applications sent out. When new applications are printed, this correction will be made. Therefore, it will not be necessary to include the statement suggested by the auditors."