OPWDD and other governmental agencies will audit how a program handles personal allowance. They will review the ledgers and supporting documentation, and count the cash on hand.

Common Audit Problems

Some common problems have been found during audits. These common problems include:

  • Personal allowance was not separated from countable income within three (3) days of receipt
  • Funds were missing
  • Full personal allowance amount was not allocated to the person when the amount of their unearned income decreased 
  • Annual review of the required percentage of personal allowance accounts for people living in the different types of residences was not completed
  • Cash in the house exceeded the statutory per person cash cap
  • Expenditures from personal allowance were inappropriate, for example, personal allowance was used to pay for local phone service, prescriptions and other expenses that should have been paid for by the agency or Medicaid
  • The person’s money handling skills in the MMA were not re-evaluated periodically 
  • Internal written procedures on how to handle personal allowance funds did not exist
  • Documentation of the receipt and separate accounting of the semi-annual clothing allowance from OPWDD was lacking
  • The semi-annual clothing allowance funds were not being used 

There have also been common problems with ledgers, such as:

  • Cash transactions were not entered on the ledger at the time they occurred
  • The person who made the purchase was not recorded
  • Ledgers were poorly maintained or non-existent
  • Mathematical errors were made on the ledger
  • Purchases did not have supporting receipts
  • Generic receipts did not include the vendor, date, or description of items purchased 
  • Individuals who were capable did not initial or sign for money they were given 


Pledging is when an agency or staff lends agency funds or their own money to a person and expects repayment from personal allowance funds. Lending money to personal allowance recipients, even for a short period, and later being repaid from personal allowance funds, is forbidden by State law. 

If staff at the residence do not have access to the cash at the time of request, the residence may not take funds from petty cash or loan personal funds and later reimburse petty cash or staff from the person’s personal allowance. Prior planning can eliminate situations in which staff may be tempted to loan agency funds or their own funds. The agency should review its procedures to ensure that there are plans to ensure individuals have access to their funds when staff who can open the safe are off duty. 

It is difficult to make some purchases using cash today. OPWDD has developed policies to address the use of a credit card to make purchases in a manner that avoids pledging when necessary (such as airline tickets). The DDSOO or voluntary agency may use their business credit card for the purchase of an item(s) for a person for whom the DDSOO or voluntary agency Director manages personal allowance funds. The individual’s funds must be set aside prior to the purchase and for the full amount of the purchase. If the funds are not set aside prior to the purchase, it would be considered a pledging of funds, and this would be a violation of the OPWDD Personal Allowance regulations (14 NYCRR 633.15).

For purchases requiring a credit card, the agency can ensure they allow people access to items and ensure they are not pledging money by:

  • Reviewing the personal allowance account and verifying there is a sufficient balance to cover the purchase
  • Setting aside the full cost prior to using the credit card
  • Paying the full cost from the personal account to the credit card bill immediately after the transaction

An agency may provide funds to purchase items or participate in community outings when the person does not have income. This is not advancing funds as there is no expectation the person will repay the agency. If an agency provides funds to a person without income, the funds for personal spending cannot be reimbursed if the person later becomes eligible for benefits. 

Sub-Ledgers And Money Accessibility

Procedures can be developed to allow staff access to small amounts of personal allowance funds when staff who have access to the safe are off duty. One way is to use a sub-ledger system. 

Sub-ledgers are recommended as a best practice because:

  • Cash outside of secure areas will be minimized
  • It provides accountability for funds
  • People can access their cash when needed 

Example - Sub-ledgers

This example describes the sub-ledger procedures used by one provider.

Ledger sheets are secured and funds are kept locked in a safe. The provider designates a ledger manager who has access to the ledger and safe. A ledger co-manager can be designated as a back-up to cover when the designated manager is off duty. A full reconciling of ledgers and cash must be done before responsibility can shift from the manager to the co-manager. 

If funds are needed when there is no access to the safe, small sums can be given to another responsible staff person in advance and secured within the residence when the outings are complete. The staff person signs the ledger sheet, and the funds are put in a sub-ledger envelope designating the purpose of the funds. The staff person must document how all the money is spent and provide receipts. The funds and sub-ledger are secured when the staff is not out with the individual or shopping on their behalf.  If there is a specific purpose for the cash, the responsible staff person must shop and return the receipts and change to the ledger manager within seven (7) days. If more money is requested for the same person, the staff person must turn in the sub-ledger before the additional funds are granted.

Whenever a staff person transfers a person's funds to another staff person, there must be a ledger entry. 

The provider has several policies which help safeguard the money:

  • Staff are not allowed to transfer or loan money from one person’s account to another’s 
  • Loans from personal allowance funds to staff are prohibited
  • Staff are not allowed to spend their own funds and later be reimbursed
  • Comingling staff and individual funds is not allowed; each person’s funds are kept separately
  • The ledger manager can audit sub-ledgers at any time


As personal allowance impacts the quality of a person’s life, misuse is punishable by law. Mismanagement of personal allowance can be a Class A misdemeanor. Civil and criminal punishments include:

  • Up to 2 years in jail
  • Fine of $10,000
  • Judgments of up to twice the misused amount