Audit of the Old Colony Young Men’s Christian Association, Inc. Objectives, Scope, and Methodology

An overview of the purpose and process of auditing the Old Colony Young Men’s Christian Association, Inc.

Overview

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of certain activities of Old Colony Young Men’s Christian Association, Inc. (OCY) for the period July 1, 2017 through June 30, 2019.

We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective.

Below is our audit objective, indicating the question we intended our audit to answer and the conclusion we reached regarding the objective.

Objective	Conclusion
Do OCY’s non-payroll purchase-of-service (POS) state contract expenses comply with Sections 1.04(1) and 1.05 of Title 808 of the Code of Massachusetts Regulations (CMR)?	Yes

 

To achieve our audit objective, we gained an understanding of the internal controls we determined to be relevant to the objective by reviewing agency policies and procedures, as well as conducting interviews with OCY’s staff and management. We evaluated the design and implementation, and tested the operating effectiveness, of controls over non-payroll expenditures associated with OCY’s POS contracts. We also conducted further audit testing, as described below.

Non-payroll POS State Contract Expenses

Our total population included 39,681 non-payroll POS expenditures, totaling $15,690,025. We judgmentally selected a sample of 30 non-payroll POS contract expenditures, totaling $55,804, that included all expenditures greater than or equal to $1,000 from three expense categories: training, conferences and meetings, and promotion. From the remaining population of 39,651 expenditures, totaling $15,634,222 (including the transactions under $1,000 from the expense categories in the previous test), we selected a statistical, random sample (with a confidence level² of 95%, a tolerable error rate³ of 5%, and an expected error rate⁴ of 0%) of 60 expenditures, totaling $43,929. We reviewed supporting documentation (i.e., receipts, invoices, monthly statements, and purchase orders) for all non-payroll POS contract expenditures in our samples to determine whether they were properly documented in compliance with the recordkeeping requirements of 808 CMR 1.04(1) and that no nonreimbursable costs, as defined in 808 CMR 1.05, were charged to the contracts.

Data Reliability Assessment

OCY uses the Stock, Garber, and Associates, Inc. (SGA) accounting system to record and process all accounting transactions. We determined the reliability of SGA by testing selected controls (access controls, configuration management, contingency planning, security management, and segregation of duties) implemented during our audit period. We also performed the following tests:

• We selected a judgmental sample of 20 expenses from SGA and determined whether the information in SGA matched information on hardcopy supporting documentation (e.g., invoices and monthly statements).
• We selected a judgmental sample of 20 expenses from hardcopy supporting documentation and traced them to SGA for agreement.

Based on our audit work, we determined that the data obtained for our audit were sufficiently reliable for the purposes of our audit work.

Conclusion

Our audit revealed no significant instances of noncompliance that must be reported under generally accepted government auditing standards.

2.     The confidence level is the measure of how confident we can be that our results reflect what we would have obtained if the entire population had been tested.

3.     The expected error rate is the anticipated rate of occurrence of noncompliance with 808 CMR 1.04(1) and 1.05.

4.     The tolerable error rate is the maximum error in the population we would be willing to accept and still conclude that the result from the sample had achieved the audit objective.

Date published:	February 23, 2021