Projections indicated that there would be record numbers of homeless people over the next few years, so the city decided that it was important to make shelters available. Accordingly, contracts were signed with two hotels in the downtown area over a three-year period. The hotels committed to have rooms available in the two coldest months of the year, and the city agreed to pay for the rooms at the rate of $40 per night. The hotel rooms were intended for homeless families.
At the same time, local churches got together and arranged to have volunteers staff the churches and provide hot meals so that the churches could be used as shelters by single individuals. The result was that the hotel rooms were not used, and over a period of three years, the city paid almost $850 000 for empty rooms. This was publicized when the city's auditor general published his annual report.
REQUIRED
a. What criteria would the city's auditor general use to conduct the audit of expenditures for the homeless?
b. What are the key findings?
c. What recommendations for improvement might be included in the audit report?
d. What type of audit report-an attestation or a direct report-would the auditor general most likely issue? Explain why.