FAC Explorer

Audit 10984

FY End
2023-06-30
Total Expended
$2.34M
Findings
4
Programs
3
Organization: Paratransit, Inc. (CA)
Year: 2023 Accepted: 2024-01-11
Auditor: Richardson & Company LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
8276 2023-001 Material Weakness - P
8277 2023-002 Material Weakness - B
584718 2023-001 Material Weakness - P
584719 2023-002 Material Weakness - B

Programs

ALN Program Spent Major Findings
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $300,000 - 1
20.507 Federal Transit_formula Grants $280,000 Yes 1
10.175 US Department of Agriculture $11,922 - 0

Contacts

Name Title Type
N3AUSJHMTN48 Lisa Cappellari Auditee
9164292009 Ingrid Sheipline Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenses reported on the Schedule are reported on the accrual basis of accounting. Such expenses are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited as to reimbursement. De Minimis Rate Used: Both Rate Explanation: The auditee used the de minimis indirect cost rate on the 20.507 Federal Transit Cluster grants only. The accompanying schedule of expenditures of federal awards includes the federal grant activity of Paratransit, Inc. under programs of the federal government for the year ended June 30, 2023. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of Paratransit’s operations, it is not intended to be and does not present the financial position, changes in net position, or cash flows of Paratransit.
Title: PROGRAM COSTS/MATCHING CONTRIBUTIONS Accounting Policies: Expenses reported on the Schedule are reported on the accrual basis of accounting. Such expenses are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited as to reimbursement. De Minimis Rate Used: Both Rate Explanation: The auditee used the de minimis indirect cost rate on the 20.507 Federal Transit Cluster grants only. The amounts shown as current year expenses represent only the (federal/state/local) grant portion of the program costs. Entire program costs may be more than shown.
Title: NONCASH AWARDS Accounting Policies: Expenses reported on the Schedule are reported on the accrual basis of accounting. Such expenses are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited as to reimbursement. De Minimis Rate Used: Both Rate Explanation: The auditee used the de minimis indirect cost rate on the 20.507 Federal Transit Cluster grants only. No noncash awards existed in the current year.
Title: MISSING PASS-THROUGH IDENTIFYING NUMBER Accounting Policies: Expenses reported on the Schedule are reported on the accrual basis of accounting. Such expenses are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited as to reimbursement. De Minimis Rate Used: Both Rate Explanation: The auditee used the de minimis indirect cost rate on the 20.507 Federal Transit Cluster grants only. Department of Transportation Federal Transit Cluster 20.507 Federal Transit - Formula Grants (Urbanized Area Formula Program) Mobility Management Transit Services Programs Cluster 20.513 - Enhanced Mobility of Seniors and Individuals With Disabilities
Title: SUBRECIPIENTS Accounting Policies: Expenses reported on the Schedule are reported on the accrual basis of accounting. Such expenses are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited as to reimbursement. De Minimis Rate Used: Both Rate Explanation: The auditee used the de minimis indirect cost rate on the 20.507 Federal Transit Cluster grants only. There were no subrecipients of the Paratransit’s programs during the year ended June 30, 2023.
Title: LOAN PROGRAMS Accounting Policies: Expenses reported on the Schedule are reported on the accrual basis of accounting. Such expenses are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited as to reimbursement. De Minimis Rate Used: Both Rate Explanation: The auditee used the de minimis indirect cost rate on the 20.507 Federal Transit Cluster grants only. None

Finding Details

Finding 2023-001
Finding 2023-001: SEFA – Material Weakness Criteria: U.S. Code § 200.508(b) states that an auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) in accordance with § 200.510. U.S. Code § 200.510(b)(3) states that at a minimum the SEFA provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. The inclusion of correct Assistance Listing numbers on the SEFA is a critical factor in determining major and non-major programs and designing appropriate audit procedures for individual grants. Condition: The SEFA prepared by management included an incorrect Assistance Listing (AL) number for one grant. Federal grant AL No. 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities was incorrectly identified as AL No. 20.507 Mobility Management. While both grants are from the Federal Transit Agency, they fall under different clusters in the Office of Management and Budget’s Compliance Supplement and thus have different audit requirements. Cause: Paratransit’s internal controls over the completeness of the SEFA were not operating effectively. Effect: The grant in question was initially identified as a major grant and certain audit procedures were applied. The revision of the AL number resulted in this grant being considered non-major, thus not required to be tested. Recommendation: We recommend management verify with the grantor the AL number of the grant. This can be done by obtaining this information from grant documents, or direct communication with the grantor. We further recommend the SEFA be reviewed for accuracy by an individual not included in the SEFA preparation process. Review should be notated with initials and date. Management’s Response: See Corrective Action Plan
Finding 2023-002
Finding 2023-002: Questioned Cost – Material Weakness Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Also, costs should not be included as a cost of any other federally financed programs in either the current or prior period. Costs charged to federal grants should be reviewed by an individual familiar with the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 as part of the SEFA review process. Condition: Costs for US Department of Transportation, Mobility Management Grant 20.507 Section 5307 included a $30,000 charge for use of the Data Management System (DMS). The charge is based on a contract rate charged to outside entities that varies depending on the number of users. Management stated the charge was to recoup costs for use of the DMS. Costs for the DMS consist of historical costs to get the system functioning, along with current personnel costs to operate the system and provide the contracted training. The historical costs occurred outside the period of performance and are thus unallowable. Personnel costs are already being charged to the grant through the allocated payroll and benefits of trainers and other personnel, and thus should not also be charged through the contract rate. In addition, if the contract rate includes a profit component this would also be unallowable to charge to the grant. We also noted the same $30,000 charge was included in US Department of Transportation, Enhanced Mobility of Seniors and Individuals with Disabilities, Section 5310. Cause: Paratransit’s internal controls over the determination of allowable costs were not operating effectively. Effect: The DMS costs were removed and replaced with an allowable 10% de minimus overhead charge. Recommendation: We recommend that costs charged to federal grants be reviewed by an individual familiar with the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 as part of the SEFA review process. Management’s Response: See corrective action plan.
Finding 2023-001
Finding 2023-001: SEFA – Material Weakness Criteria: U.S. Code § 200.508(b) states that an auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) in accordance with § 200.510. U.S. Code § 200.510(b)(3) states that at a minimum the SEFA provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. The inclusion of correct Assistance Listing numbers on the SEFA is a critical factor in determining major and non-major programs and designing appropriate audit procedures for individual grants. Condition: The SEFA prepared by management included an incorrect Assistance Listing (AL) number for one grant. Federal grant AL No. 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities was incorrectly identified as AL No. 20.507 Mobility Management. While both grants are from the Federal Transit Agency, they fall under different clusters in the Office of Management and Budget’s Compliance Supplement and thus have different audit requirements. Cause: Paratransit’s internal controls over the completeness of the SEFA were not operating effectively. Effect: The grant in question was initially identified as a major grant and certain audit procedures were applied. The revision of the AL number resulted in this grant being considered non-major, thus not required to be tested. Recommendation: We recommend management verify with the grantor the AL number of the grant. This can be done by obtaining this information from grant documents, or direct communication with the grantor. We further recommend the SEFA be reviewed for accuracy by an individual not included in the SEFA preparation process. Review should be notated with initials and date. Management’s Response: See Corrective Action Plan
Finding 2023-002
Finding 2023-002: Questioned Cost – Material Weakness Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Also, costs should not be included as a cost of any other federally financed programs in either the current or prior period. Costs charged to federal grants should be reviewed by an individual familiar with the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 as part of the SEFA review process. Condition: Costs for US Department of Transportation, Mobility Management Grant 20.507 Section 5307 included a $30,000 charge for use of the Data Management System (DMS). The charge is based on a contract rate charged to outside entities that varies depending on the number of users. Management stated the charge was to recoup costs for use of the DMS. Costs for the DMS consist of historical costs to get the system functioning, along with current personnel costs to operate the system and provide the contracted training. The historical costs occurred outside the period of performance and are thus unallowable. Personnel costs are already being charged to the grant through the allocated payroll and benefits of trainers and other personnel, and thus should not also be charged through the contract rate. In addition, if the contract rate includes a profit component this would also be unallowable to charge to the grant. We also noted the same $30,000 charge was included in US Department of Transportation, Enhanced Mobility of Seniors and Individuals with Disabilities, Section 5310. Cause: Paratransit’s internal controls over the determination of allowable costs were not operating effectively. Effect: The DMS costs were removed and replaced with an allowable 10% de minimus overhead charge. Recommendation: We recommend that costs charged to federal grants be reviewed by an individual familiar with the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 as part of the SEFA review process. Management’s Response: See corrective action plan.