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EAC MANAGEMENT DECISION:

Resolution of the OIG Audit Report on the Administration of 

Payments Received Under the Help America Vote Act by the 

New York State Board of Elections for the Period May 1, 2003 

Through April 30, 2010, Report No. E-HP-NY-08-10 

May 5, 2011 

BACKGROUND

The EAC is an independent, bipartisan agency created by the Help America Vote Act of 

2002 (HAVA). EAC assists and guides state and local election officials in improving the 

administration of elections for Federal office. EAC distributes HAVA funds to States for 

the acquisition of voting systems, and supports the establishment of statewide voter 

registration lists, and other activities to improve the administration of elections for 

Federal office. EAC monitors State use of HAVA funds to ensure funds distributed are 

being used for authorized purposes. To help fulfill this responsibility, the EAC 

determines the necessary corrective actions to resolve issues identified during Single 

Audit Act and Department of Inspector General (OIG) audits of state administration of 

HAVA funds. The EAC OIG has established a regular audit program to review the use 

of HAVA funds by States. The OIG’s audit plan and audit reports can be found at 

www.eac.gov. 

The EAC Audit Follow-up Policy authorizes the EAC Executive Director to issue the 

management decision for OIG audits of Federal funds to state and local governments, to 

non-profit and for-profit organizations, and for single audits conducted by state auditors 

and independent public accountants (external audits). The Executive Director has 

delegated the evaluation of final audit reports provided by the OIG and single audit 

reports to the Director of the HAVA Grants Division of EAC. The Division provides a 

recommended course of action to the Executive Director for resolving questioned costs, 

administrative deficiencies, and other issues identified during an audit. The EAC 

Executive Director issues the EAC Management Decision that addresses the findings of 

the audit and details corrective measures to be taken by the State. In this particular 

instance, citing a potential conflict of interest, the Executive Director has delegated this 

responsibility to the EAC General Counsel. 

States may appeal the EAC management decisions. The EAC Commissioners serve as 

the appeal authority. A State has 30 days to appeal the EAC management decision. All 

appeals must be made in writing to the Chair of the Commission. The Commission will 

render a decision on the appeal no later than 60 days following receipt of the appeal or, in 

the case where additional information is needed and requested, 60 days from the date that 

the information is received from the State. The appeal decision is final and binding. 
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Please note, with two vacancies the Commission presently lacks a quorum to conduct 

appeals. The 30 day period to file an appeal remains in place. However, the 60 day 

period for a decision will toll until a Commission quorum is reestablished. 

AUDIT HISTORY 

The OIG issued an audit report on the administration of payments received under the 

Help America Vote Act (HAVA) by the New York State Board of Elections (BOE) on 

March 7, 2011. The audit concluded that the BOE generally accounted for and expended 

HAVA funds in accordance with financial management requirements for the period from 

May 1, 2003 through April 30, 2010 except for issues with providing state matching 

funds on a timely basis, time cards and semi-annual certifications in support of HAVA 

funded payroll charges, and maintenance of adequate property records to properly 

account for HAVA funded equipment. 

Finding 1 – HAVA Section 251 State Match 

The BOE established an election fund to hold HAVA funds in accordance with the 

requirements of HAVA Section 254. HAVA also requires that the election fund hold the 

five percent state matching funds that enabled New York to qualify for federal HAVA 

Section 251 funds. Furthermore, interest earned from the investment of the money in the 

election fund must also be deposited into the election fund. The timely deposit of the 

state match and of monthly interest earnings increases the election fund balance upon 

which each subsequent month’s interest earnings are based, resulting in a compounding 

effect that adds additional funds to the program. 

BOE determined that the state had a requirement to provide matching funds totaling 

$9,052,509 to be eligible to receive Section 251 funds. However, the state did not 

deposit the matching funds into its election fund. The matching funds were appropriated 

by the state, but remained in the general fund until expended. The state partially met its 

match by requiring counties to contribute five percent of the cost of voting equipment 

purchased by the state on behalf of the counties as well as through state funded HAVA 

related expenditures. New York’s Office of General Services (OGS), the office that 

tracks HAVA financial activity, calculated that, as of April 30, 2010, the state and its 

counties had only expended $8,462,457 against the state matching requirement, resulting 

in a shortfall of $590,052. Further, the state did not transfer any interest earned on the 

balances in the general funds into the HAVA election fund as required. The state 

estimated that the lost interest was $1,017,958 as of April 30, 2010. 

Recommendations: 

The auditors recommended that the BOE: 

1. Deposit into the election fund the state match shortfall of $590,052, or such other 

amount as determined at the date of transfer. 
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2. Transfer the lost interest earnings of $1,017,958 into the election fund along with 

any additional interest that may accrue until the date of the transfer. 

BOE’s Response: 

BOE said that they take no exception to this finding and will work with EAC to ensure 

that appropriate corrective action is taken. 

EAC Response: 

EAC will work with the BOE to ensure the appropriate amounts are transferred into the 

election fund. 

Finding 2 – Personnel Certifications 

The BOE used HAVA funds to pay salaries for employees during the periods from May 

4, 2006 through December 26, 2007 and July 23, 2009 through April 30, 2010. Between 

May 4, 2006 and December 26, 2007, the BOE charged the HAVA fund $495,602 for the 

full salaries for personnel who worked on HAVA activities. These charges were not 

supported by semi-annual certifications that the employees worked only on HAVArelated activities or by other documentation such as timecards that showed the employees 

worked on HAVA-related activities. 

BOE officials said that they were not aware of the requirement to prepare semi-annual 

certifications. 

Recommendation: 

3. The auditors recommended that the EAC resolve with the BOE the appropriate 

corrective action regarding the untimely completion of the semi-annual 

certifications and the lack of other documentation, such as time cards for the 2006 

to 2007 period personnel costs were paid with HAVA funds. 

BOE’s Response: 

BOE said that they take no exception to this finding and will work with EAC to ensure 

that appropriate corrective action is taken. 

EAC Response: 

EAC will work with the BOE to resolve the issue regarding the lack of personnel 

documentation for the period in question. 

Finding 3 – Property Records 
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The inventory records for the BOE HAVA funded State Voter Registration System 

(SVRS) equipment did not contain all of the elements required by the Common Rule. 

The records did not list the source of the property, who holds the title, the percentage of 

federal participation, and the condition. 

BOE election officials informed the auditors that they were not aware of the detailed 

recordkeeping requirements of the Common Rule. 

Recommendation: 

4. The auditors recommended that the BOE ensure that the property management 

records for HAVA equipment list the source of the property, who holds the title, 

the percentage of federal participation, and the condition. 

BOE’s Response: 

BOE said that they take no exception to this finding and will work with EAC to ensure 

that appropriate corrective action is taken. 

EAC Response: 

EAC will work with the BOE to ensure appropriate corrective action consistent with the 

Common Rule.