Editorial: The Mosaic audit

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On Friday the city released its internal audit of the administration of the state’s Prevention and Wellness Trust Fund grant.

[Read the report here: City Auditor’s report to City Council]

In July, the Worcester City Council ordered the audit after Councilors Gary Rosen and Michael T. Gaffney questioned the legitimacy of the Mosaic Cultural Complex, a partner in the grant. At the time, City Manager Edward M. Augustus Jr. suggested expanding the audit to all 11 grant participants and the vote for an audit passed unanimously.

Mosaic drew the ire of local media company Turtleboy Sports when it discovered some people affiliated with Mosaic participated in a Black Lives Matter protest in January that blocked traffic in Kelley Square and led to charges against some of the protesters. Mosaic has denied involvement in the protest.

Advocates of Mosaic countered with claims that questions surrounding its legitimacy by Turtleboy Sports, which supports Gaffney’s candidacy for mayor and whose site Gaffney advertises on, are racially and politically motivated.

Unfortunately, it does not appear the audit will be the end of the story.

While the audit found no evidence of fraud on the part of Mosaic or the other partner organizations, it revealed deficiencies in internal controls and possible violations of state labor law by Mosaic.

Most damaging to Mosaic are revelations of nonpayment of payroll.

According to the audit: “The contract [signed in April] requires partners to pay its staff and then submit related payroll registers to the City with reimbursement claims. The MA Wage Act requires that employers pay employees 6 days after the end of the payroll period which is usually weekly or biweekly.

“Mosaic submitted a claim for reimbursement dated May 12, 2015 for payroll expenses incurred for the period October 1 – December 31, 2014 without payroll registers.  Mosaic paid employees for this work period, October 1, 2014 – December 31, 2014, on September 23, 2015.”

Aside from requesting reimbursement before payroll was paid, in violation of the terms of the contract, nonpayment appears to violate state law.

In response to the city’s denial of reimbursement, Mosaic wrote to the city in July acknowledging a shortage of funds and asking to be allowed a reimbursement to cover payroll. The city agreed to a contract amendment, paid Mosaic and received confirmation of payroll.

The city has said it will not allow Mosaic to continue receiving funds, so its future in the grant program will hinge on its ability to secure a line of credit against future receipts from the program.

Not related to Mosaic is the finding that the city, as the Coordinating Partner, did not submit invoices with correct documentation to the state in a timely manner.

As partner organizations grappled with the problem of timely reporting, the city was unable to fulfill its obligation to report on a quarterly basis. The audit does not address the question of whether the city reported incomplete data in a timely fashion or failed to file on a quarterly basis. [The Sun has asked the city for clarification.]

Overall, the audit paints a picture of the city and its partners rushing to implement programs designed to increase public health by offering courses on chronic disease self-management. While the goal is laudable, the audit makes clear that such a rush can overwhelm organizations committed to the common good.

Moreover, while the audit did not find what opponents of Mosaic expected, they are vindicated to the extent the audit identified the need for better internal controls.

The state grant is designed to promote public health in our community. Toward that goal, the audit just released should help ensure that, going forward, the finances and administration of the grant’s partner organizations are in shape.

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