2023-002 Allowable Costs: Segregation of Duties over Financial Reporting Process.
Federal Program Information: Activities to Support State, Tribal, Local and Territorial Health
Department Response to Public Health or Healthcare Crises (Assistance Listing #93.391)
Condition and Criteria: During the course of the audit, we noted lack of segregation of duties
as it relates to cash receipts, cash disbursements, and cash reconciliation. There should be
segregation of duties over the physical access to assets and the ability to record and track those
assets in the accounting system.
Prior Year Audit Finding: n/a
Cause and Effect: Lack of segregation of duties has resulted due to the limited personnel and
several employee transitions during the year. This increases the Organization’s risk of
misappropriation of assets and could result in intentional fraud or unintentional errors that
could occur and go undetected.
Recommendation: We recommend the Organization review all financial internal control
policies and procedures to ensure proper segregation of duties and minimize the Organization’s
risk to misappropriation of assets. This will help mitigate the risk of misappropriation of assets
and fraudulent reporting as it relates to lack of segregation of duties.
Management’s Response: Management understands the importance of segregating financial
and accounting duties in order to reduce the risk of fraud and error. Accordingly, as of fiscal
year 2024, management has hired a new Chief Financial Officer (“CFO”) and Finance Director.
The Interim CFO has continued to work with the new CFO to prevent separation of duties
issues wherever possible. Additionally, management plans to review the internal control
policies and procedures and make changes as considered necessary.
Prior year audit finding: n/a
Context: This represents a systemic problem.
Questioned Costs: None.
2023-003 Preparation of the Schedule of Expenditures of Federal Awards Federal Program Information: Activities to Support State, Tribal, Local and Territorial Health
Department Response to Public Health or Healthcare Crises (Assistance Listing #93.391) Condition and Criteria: The Schedule of Expenditures of Federal Awards (SEFA) did not
include all federal expenditures. As a result, the Organization's internally prepared SEFA did
not agree to the Organization's financial records of federal expenditures.
Prior Year Audit Finding: n/a
Cause and Effect: The SEFA was prepared by an individual who joined the Foundation after
the end of the fiscal year, who did not have sufficient knowledge to include all federal
expenditures.
Context: This represents a systemic problem.
Questioned Costs: None.
Recommendation: The SEFA should be prepared and reconciled to the general ledger by an
employee knowledgeable of the grant activity for the year. Someone other than the preparer
should review the SEFA for accuracy and completeness to identify any errors and maintain
proper internal controls over the preparation of the SEFA.
Management’s Response: Going forward, management will have someone who is
knowledgeable of federal activity during the year prepare the Schedule of Expenditures of
Federal Awards and ensure details on the schedule tie out on the financial details maintained in
QuickBooks.
2023-004 Allowable Costs: Improve Processes Over Review and Approval of Expenditures.
Federal Program Information: Activities to Support State, Tribal, Local and Territorial Health
Department Response to Public Health or Healthcare Crises (Assistance Listing #93.391)
Condition and Criteria: The Foundation’s internal processes state that the monthly Financial
Status Reports (“FSRs”) submitted to the Foundation by subrecipients should be reviewed by
an individual familiar with the program to ensure costs are allowable and all supporting
documentation has been submitted prior to entry of transaction into QuickBooks, and that all
timesheets should be approved prior to allocation of time to programs prior to entry into
QuickBooks. However, these processes were not followed consistently throughout the year.
Prior Year Audit Finding: N/A
Cause and Effect: There were several instances in which the monthly FSRs submitted to the
Foundation by subrecipients were not properly reviewed and authorized by the Foundation
prior to payment to subrecipients. Additionally, there was one instance noted for which the
time sheet was not properly approved prior to entry. If these expenditures are not allowable,
this could result in noncompliance with federal allowable costs guidelines, and could result in
the loss of federal funding.
Context: This represents a systemic problem.
Questioned Costs: None. Recommendation: All costs related to expenditures of federal funds should be reviewed and
approved by an individual familiar with the program requirements. This will ensure costs are
allowable, and the Foundation is not at risk of noncompliance, which could result in the loss of
federal funding.
Management’s Response: Going forward, management will have someone who is
knowledgeable of federal activity review and approve all federal expenditures and allocations,
including those relating to subrecipient FSRs. A new CFO was hired during FY24, who will be
reviewing all internal controls and processes for needed updates, as well as monitor activities to
prevent any unauthorized transactions or potential unallowable costs.
2023-002 Allowable Costs: Segregation of Duties over Financial Reporting Process.
Federal Program Information: Activities to Support State, Tribal, Local and Territorial Health
Department Response to Public Health or Healthcare Crises (Assistance Listing #93.391)
Condition and Criteria: During the course of the audit, we noted lack of segregation of duties
as it relates to cash receipts, cash disbursements, and cash reconciliation. There should be
segregation of duties over the physical access to assets and the ability to record and track those
assets in the accounting system.
Prior Year Audit Finding: n/a
Cause and Effect: Lack of segregation of duties has resulted due to the limited personnel and
several employee transitions during the year. This increases the Organization’s risk of
misappropriation of assets and could result in intentional fraud or unintentional errors that
could occur and go undetected.
Recommendation: We recommend the Organization review all financial internal control
policies and procedures to ensure proper segregation of duties and minimize the Organization’s
risk to misappropriation of assets. This will help mitigate the risk of misappropriation of assets
and fraudulent reporting as it relates to lack of segregation of duties.
Management’s Response: Management understands the importance of segregating financial
and accounting duties in order to reduce the risk of fraud and error. Accordingly, as of fiscal
year 2024, management has hired a new Chief Financial Officer (“CFO”) and Finance Director.
The Interim CFO has continued to work with the new CFO to prevent separation of duties
issues wherever possible. Additionally, management plans to review the internal control
policies and procedures and make changes as considered necessary.
Prior year audit finding: n/a
Context: This represents a systemic problem.
Questioned Costs: None.
2023-003 Preparation of the Schedule of Expenditures of Federal Awards Federal Program Information: Activities to Support State, Tribal, Local and Territorial Health
Department Response to Public Health or Healthcare Crises (Assistance Listing #93.391) Condition and Criteria: The Schedule of Expenditures of Federal Awards (SEFA) did not
include all federal expenditures. As a result, the Organization's internally prepared SEFA did
not agree to the Organization's financial records of federal expenditures.
Prior Year Audit Finding: n/a
Cause and Effect: The SEFA was prepared by an individual who joined the Foundation after
the end of the fiscal year, who did not have sufficient knowledge to include all federal
expenditures.
Context: This represents a systemic problem.
Questioned Costs: None.
Recommendation: The SEFA should be prepared and reconciled to the general ledger by an
employee knowledgeable of the grant activity for the year. Someone other than the preparer
should review the SEFA for accuracy and completeness to identify any errors and maintain
proper internal controls over the preparation of the SEFA.
Management’s Response: Going forward, management will have someone who is
knowledgeable of federal activity during the year prepare the Schedule of Expenditures of
Federal Awards and ensure details on the schedule tie out on the financial details maintained in
QuickBooks.
2023-004 Allowable Costs: Improve Processes Over Review and Approval of Expenditures.
Federal Program Information: Activities to Support State, Tribal, Local and Territorial Health
Department Response to Public Health or Healthcare Crises (Assistance Listing #93.391)
Condition and Criteria: The Foundation’s internal processes state that the monthly Financial
Status Reports (“FSRs”) submitted to the Foundation by subrecipients should be reviewed by
an individual familiar with the program to ensure costs are allowable and all supporting
documentation has been submitted prior to entry of transaction into QuickBooks, and that all
timesheets should be approved prior to allocation of time to programs prior to entry into
QuickBooks. However, these processes were not followed consistently throughout the year.
Prior Year Audit Finding: N/A
Cause and Effect: There were several instances in which the monthly FSRs submitted to the
Foundation by subrecipients were not properly reviewed and authorized by the Foundation
prior to payment to subrecipients. Additionally, there was one instance noted for which the
time sheet was not properly approved prior to entry. If these expenditures are not allowable,
this could result in noncompliance with federal allowable costs guidelines, and could result in
the loss of federal funding.
Context: This represents a systemic problem.
Questioned Costs: None. Recommendation: All costs related to expenditures of federal funds should be reviewed and
approved by an individual familiar with the program requirements. This will ensure costs are
allowable, and the Foundation is not at risk of noncompliance, which could result in the loss of
federal funding.
Management’s Response: Going forward, management will have someone who is
knowledgeable of federal activity review and approve all federal expenditures and allocations,
including those relating to subrecipient FSRs. A new CFO was hired during FY24, who will be
reviewing all internal controls and processes for needed updates, as well as monitor activities to
prevent any unauthorized transactions or potential unallowable costs.