Urban Development Corporation

Internal Controls Over Financial Operations

The Urban Development Corporation (UDC) is authorized to issue bonds to provide or obtain the capital resources necessary to acquire, construct, rehabilitate or improve industrial facilities, manufacturing facilities, commercial facilities, educational facilities, recreational and cultural facilities, and housing for low-income persons. UDC, which reportedly had 68 active subsidiaries at the time of our audit, does business under the trade name Empire State Development Corporation.

We examined the adequacy of UDC’s system of internal controls over its financial operations. We found these controls to be adequate in all material respects, but noted that improvements were needed in certain controls, particularly in the areas of payroll, cash disbursements and Board governance. For example, we identified a questionable arrangement in which an employee was allowed to work at home, full-time, with no regular work schedule and little, if any, supervision. When we asked to see evidence of the employee’s completed work assignments, we were informed that this information was not yet available because the individual submitted only a year-end summary of certain information and it was not yet the end of the year. We recommended that the work-at-home arrangement be terminated immediately, unless appropriate controls were established for the arrangement.

For a complete copy of Report 2004-S-30 click here.
For a copy of the 90-day response click here.