… government auditors want to get money out of an ACORN.
Auditors questioned about $2 million because ACORN Associates didn’t document open competition by contractors — many of them ACORN affiliates throughout the country.
The inspector general said HUD should demand records that document why contractors were selected and records that justify the lack of competition.
Another $1.2 million was found to have been spent on ineligible activities, such as payroll taxesand workmen’s compensation insurance. A small portion of that money, about $6,000, went for fundraising and political campaigns.
Attorneys for ACORN disputed the inspector general’s findings. Arthur Z. Schwartz wrote that the audit was severely flawed and ignored that ACORN Associates “reached thousands of Americans and helped clean up thousands of homes.”
Now, as an audit professional, I am not entirely sure how “ignoring that ACORN associates reached thousands of Americans,” technically speaking, means that the audit was severely flawed. I mean, audits are, as a rule, not interested whatever good deed the mis-used money was put to. What they are concerned with is that government grants and payments weren’t misused by the recipient. Contracts between related parties should lead to an investigation, since these cannot be arm’s length transactions and would not normally be reimbursable under government regulations — in Medicare, such arrangements would normally be reduced down to cost.