Certain Activities of the Economic Opportunity Commission of Nassau County, New York

GAO reviewed activities of the Economic Opportunity Commission and the Community Economic Development Corporation in Nassau County, New York. It was alleged that Emergency Energy Assistance Program (EEAP) funds were used for other purposes or were unaccounted for. The Commission commingled the funds with other Community Services Administration funds in the same bank account and made advances from the account to cover expenses of other programs. Other allegations of misuse of EEAP funds concerned: (1) participating vendors not being paid, (2) funds being funneled to a Corporation-owned supermarket, (3) duplicate payments being made to participants, and (4) participants using program benefits to purchase unauthorized items.

Accounting for EEAP funds was difficult because costs were recorded in different books of account or paid from different bank accounts, and many checks were voided and written out of sequence. Nevertheless, GAO was able to account for the full amount of the grant. GAO found that the Commission had paid program benefits and incurred costs for administering the program in excess of the grant amount. In addition, GAO found that: (1) payments to some vendors participating in the program were delayed; (2) program payments were advanced to the Corporation-owned supermarket on the basis of anticipated participation contrary to the Commission's operating procedures; (3) some duplicate payments may have been made to participants, but the Commission acted to correct the problem; and (4) some participants used their program benefits to purchase such items as swimsuits and pocketbooks, but the amounts involved, according to an independent accountant's estimates, would not have affected the total costs allowed under the grant. While Federal grants are usually restricted as to their use, the Commission had considerable funds available from non-Federal sources which were considered to be unrestricted. The principal source of the funds was the county's annual grant for administration. The funds were used to pay the executive director's automobile and business expenses, which may not have been allowed under Federal regulations. The cost of publishing the Commission's monthly newsletter was also paid from the nonrestricted funds.