Audit Report 4-03: Audit of Consponsorship Activities – Los Angeles District Office
On December 17, 2003, the OIG issued Audit Report 4-03, Audit of Consponsorship Activities – Los Angeles District Office. The objective of this audit was to determine if the Los Angeles District Office operated in compliance with Federal laws and Small Business Administration policies and procedures when planning an conducting SBA-sponsored and co-sponsored activities. The Los Angeles District Office cosponsored nine events from January 2000 to November 2002, which were reviewed for this audit. The OIG found that the events were not planned and conducted in accordance with Federal laws and SBA policies and procedures. Specifically, consponsorship events were not properly executed; excess registration and gift funds were not identified or disposed of properly; solicited funds were used for activities unrelated to cosponsored events; and gift funds were solicited from unapproved and proscribed (prohibited) sources. As a result, cosponsors inappropriately accumulated $248,000 in profits from cosponsored events, used $121,000 for activities unrelated to the events, and received $7,500 from prohibited sources. In addition, gift funds totaling $125,000 were solicited by District employees in support of cosponsored activity from donors whose participation could result in a potential conflict of interest. The OIG made five recommendations.