FAC Explorer

Audit 13558

FY End
2023-06-30
Total Expended
$1.46M
Findings
2
Programs
5
Organization: First Step, Inc. (AR)
Year: 2023 Accepted: 2024-01-25
Auditor: Ata PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
9923 2023-001 Significant Deficiency - A
586365 2023-001 Significant Deficiency - A

Programs

ALN Program Spent Major Findings
21.019 Coronavirus Relief Fund $806,742 Yes 1
10.558 Child and Adult Care Food Program $574,272 Yes 0
84.187 Supported Employment Services for Individuals with the Most Significant Disabilities $39,000 - 0
10.555 National School Lunch Program $20,875 - 0
10.565 Commodity Supplemental Food Program $14,768 - 0

Contacts

Name Title Type
CSM5JNPA5AK5 Chris Smith Auditee
5016205530 Courtney W. Moore Auditor
No contacts on file

Notes to SEFA

Title: Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the schedules are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A Expenditures reported on the schedules are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: Basis of Accounting Accounting Policies: Expenditures reported on the schedules are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A The accompanying schedules of expenditures of federal and state awards includes the federal and state grant activities of the Organization and are presented on the accrual basis of accounting. The information in the schedules 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 schedules present only a selected portion of the operations of the Organization, they are not intended to and DO not present the financial position, changes in net assets or cash flows.
Title: Federal Indirect Rate Accounting Policies: Expenditures reported on the schedules are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A First Step, Inc. has elected not to use the 10% de minimus indirect cost rate as allowed under the uniform guidance.

Finding Details

Finding 2023-001
Failure to comply with grant time-based requirements U.S. Department of Treasury - ALN: 21.019 COVID Funds Known and likely questioned costs: Known: $1,398, Likely: 18,509 Condition: During audit testing it was found in 10% of the sampled population were paid incorrectly, resulting in overpayment to employees and departure from grant compliance. Employees were given retention bonuses before the mandated 6 month mark as outlined in the compliance requirements of the ARPA grant. Criteria: ARPA grant document states "The retention bonus incentive category allows for bonus payments to DSPs who exceeded six (6) continuous months of employment with the same employer." Requirement #3: "The provider must certify the DSP completed six (6) continuous months of employment". Cause: Improper internal controls allowed the spreadsheet, created internally for tracking hire dates and their 6 month marks, was incorrectly calculating the fiscal year number of days and was not under review by a second employee. Effect: Known misuse of funding was $1,397.50, and when applied to the entire population resulted in likely early payment of $18,509. Departure from grant compliance. Recommendation: We recommend that management corrects the formulas on their tracking spreadsheet and require that a member of HR or payroll review the employees hire dates and bonus dates before the payment is approved. Management Response: All funds have been expended and spreadsheet was reviewed after it was brought to my attention during fieldwork.
Finding 2023-001
Failure to comply with grant time-based requirements U.S. Department of Treasury - ALN: 21.019 COVID Funds Known and likely questioned costs: Known: $1,398, Likely: 18,509 Condition: During audit testing it was found in 10% of the sampled population were paid incorrectly, resulting in overpayment to employees and departure from grant compliance. Employees were given retention bonuses before the mandated 6 month mark as outlined in the compliance requirements of the ARPA grant. Criteria: ARPA grant document states "The retention bonus incentive category allows for bonus payments to DSPs who exceeded six (6) continuous months of employment with the same employer." Requirement #3: "The provider must certify the DSP completed six (6) continuous months of employment". Cause: Improper internal controls allowed the spreadsheet, created internally for tracking hire dates and their 6 month marks, was incorrectly calculating the fiscal year number of days and was not under review by a second employee. Effect: Known misuse of funding was $1,397.50, and when applied to the entire population resulted in likely early payment of $18,509. Departure from grant compliance. Recommendation: We recommend that management corrects the formulas on their tracking spreadsheet and require that a member of HR or payroll review the employees hire dates and bonus dates before the payment is approved. Management Response: All funds have been expended and spreadsheet was reviewed after it was brought to my attention during fieldwork.