Audit 20660

Potential Conflict of Interest not Disclosed Timely- ALN 11.307- Economic Adjustment Assistance Criteria The control deficiency exists as the Corporation did not disclose a potential conflict of interest, as required b the grant, to the U.S. Department of Commerce when it arose. Condition A board member of the Organization, appointed by a local governmental entity, was a party to a consulting contract with that governmental entity regarding issues surrounding the Department of Commerce grant, with work commencing in August 2019. The board member was also employed by a vendor which the Organization used to expend grant funds. The grant states that all potential conflicts of interest are required to be disclosed in writing; this potential conflict was not disclosed until more than a year into utilization of the grant. The disclosure occurred subsequent to June 30, 2022, as soon as it was noted by the Organization. Cause The Organization did not have in place a standing requirement to have a complete conflict of interest disclosure written and signed by each board member immediately upon appointment or election to the Board, which would have brought the matter to light immediately. Instead, each member of the Board signs a conflict of interest disclosure annually, usually at the first Board meeting of the fiscal year. Effect The Organization was not in compliance with grant requirements regarding disclosure of potential conflicts of interest. The Organization complied with this requirement as soon as the potential conflict was noted. Context The Organization had an internal conflict of interest policy but did not have controls in place which ensured its completeness and utilization. Recommendation It is our recommendation that the Organization require each Board member to write and sign a document that indicates any potential conflicts of interest immediately upon appointment or election to the Board in addition to the annual disclosure, which is then reviewed by the CEO. This control allows the CEO to continually be aware of any potential conflicts of interest and act accordingly. Views of Responsible Officials and Planned Corrective Actions See Exhibit I.

Potential Conflict of Interest not Disclosed Timely- ALN 11.307- Economic Adjustment Assistance Criteria The control deficiency exists as the Corporation did not disclose a potential conflict of interest, as required b the grant, to the U.S. Department of Commerce when it arose. Condition A board member of the Organization, appointed by a local governmental entity, was a party to a consulting contract with that governmental entity regarding issues surrounding the Department of Commerce grant, with work commencing in August 2019. The board member was also employed by a vendor which the Organization used to expend grant funds. The grant states that all potential conflicts of interest are required to be disclosed in writing; this potential conflict was not disclosed until more than a year into utilization of the grant. The disclosure occurred subsequent to June 30, 2022, as soon as it was noted by the Organization. Cause The Organization did not have in place a standing requirement to have a complete conflict of interest disclosure written and signed by each board member immediately upon appointment or election to the Board, which would have brought the matter to light immediately. Instead, each member of the Board signs a conflict of interest disclosure annually, usually at the first Board meeting of the fiscal year. Effect The Organization was not in compliance with grant requirements regarding disclosure of potential conflicts of interest. The Organization complied with this requirement as soon as the potential conflict was noted. Context The Organization had an internal conflict of interest policy but did not have controls in place which ensured its completeness and utilization. Recommendation It is our recommendation that the Organization require each Board member to write and sign a document that indicates any potential conflicts of interest immediately upon appointment or election to the Board in addition to the annual disclosure, which is then reviewed by the CEO. This control allows the CEO to continually be aware of any potential conflicts of interest and act accordingly. Views of Responsible Officials and Planned Corrective Actions See Exhibit I.