Purpose of Audit
The purpose of our audit was to review the Land Bank’s monitoring of the Subcontractor’s performance for the period July 1, 2014 through June 9, 2016.
The Rochester Land Bank Corporation is a not-for-profit corporation created in 2013 to facilitate, manage and implement designated community development projects or redevelopment plans in the City of Rochester. The Land Bank, which is governed by a seven-member Board of Directors, entered into a written agreement with the not-for-profit Rochester Housing Development Fund Corporation (Subcontractor) to assist with the use of grants to acquire, perform environmental remediation and rehabilitate vacant homes for affordable owner-occupied use. The Land Bank funds its operations primarily with grants, which have totaled $4.6 million since 2014.
- Land Bank officials do not adequately monitor aspects of performance such as the selection of construction managers, awarding of contracts for projects or Subcontractor performance.
- Land Bank officials do not adequately monitor cash disbursements or profits from the sale of rehabilitated homes.
- There is no formal process to ensure a thorough and proper audit of claims is conducted prior to payment.
- Amend the agreement with the Subcontractor or develop written policies and procedures to improve documentation for selecting qualified managers and contractors, awarding contracts to the lowest bidders, cash disbursements, claims auditing and monitoring profits from the sale of rehabilitated homes.
- Review individual cash disbursements.
- Ensure that a proper audit of claims is conducted prior to payment.