2022-001 Condition: The Organization?s financial structure lacks appropriate segregation of financial duties. Adequate segregation of financial duties is not present among purchasing, receipting, and approval of financial transactions. Criteria: ? 200.303(a) requires non-federal entities to establish and maintain effective internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Segregation of employees? duties is a common practice in an effective internal control structure. Segregation of duties is when specific employee functions related to important accounting areas (such as cash receipting and cash disbursements) are separated among different individuals to significantly reduce the risk that any one individual could intentionally or unintentionally misappropriate assets.Effect: Failure to implement and maintain adequate segregation of duties exposes the Organization to greater risk of noncompliance with federal awards requirements. Cause: The Chief Executive Officer initiates and approves all financial transactions without any oversight from the board of directors. Recommendation: We recommend that the Organization implement an internal control policy to review and approve the Chief Executive Officer?s financial activity. The individual assigned to review and approve the Executive Director?s transactions should possess the financial acumen to review and approve financial transactions and identify any issues or concerns. Management Response: Management concurs with this finding. Management will immediately implement procedures to segregate financial duties to the extent possible with available resources.
2022-002 Condition: The Organization?s Chief Executive Officer utilizes a debit card for federal award program purchases. Effectively, the Chief Executive Officer executes and authorizes his own purchases. Criteria: ? 200.303(a) requires non-federal entities to establish and maintain effective internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The duties of purchasing and approval should be segregated among several personnel or members of the board of directors. Segregation of employees? duties is a common practice in an effective internal control structure. Effect: Failure to maintain adequate segregation of duties exposes the assets of the Organization to greater risk of misappropriation and noncompliance with federal, state, and grant contract guidelines. Cause: The Chief Executive Officer utilizes a debit card for federal award program purchases. Recommendation: We recommend the Executive Director immediately discontinue the use of the debit card. Management Response: Management concurs with this finding. Management will immediately cease use of the debit card.
2022-003 Condition: The Organization?s procurement policy does not clearly describe and document the details required for adequate financial management of the Organization. For example, the policy does not explicitly state who has authority to execute and approve financial transactions such as payroll and check signing. Inclusion of these elements are essential to an effective procurement policy. Criteria: ? 200.318 requires non-federal entities to have and use documented procurement procedures. ? 200.320 outlines procurement methods required to make purchases in compliance within the federal guidelines. At a minimum, an effective procurement policy should clearly outline who has the authority to execute and approve financial transactions such as payroll and check signing. Further, it should outline the threshold levels for execution and approval of financial transactions. Effect: Failure to implement an adequate procurement policy exposes the assets of the Organization to greater risk of misappropriation and noncompliance with federal, state, and grant contract guidelines. Cause: The Organization?s procurement policy does not clearly outline who has the authority to execute and approve (including threshold levels) financial transactions. Recommendation: We recommend the Organization immediately update its procurement policy to explicitly state who has the authority to execute and approve financial transactions. The policy should include guidance on threshold levels for purchase amounts. Management Response: Management concurs with this finding. Management will implement a more robust procurement policy immediately.
2022-004 Condition: The Organization does not maintain supporting documentation for approved payrates in employee personnel files. Criteria: ? 200.303(a) requires non-federal entities to establish and maintain effective internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. An effective internal control structure necessitates a formal policy that documents approved payrates in employee personnel files. Effect: Failure to implement an adequate policy for documenting approved pay rates exposes the assets of the Organization to greater risk of misappropriation due to fraud. Cause: The Organization has not implemented a policy to maintain supporting documents of approved payrates in employee personnel files. Recommendation: At a minimum, the board of directors should approve pay rates for all employees yearly. Updated, approved payrates should be maintained in each employee?s personnel files or on an approved master list. Management Response: Management concurs with this finding. Management will immediately implement a payroll policy that requires documentation of approved payrates in employee personnel files.
2022-005 Condition: During our audit procedures, we noted that monthly expenditure reports were not filed accurately or by the required deadline, the 5th day of the subsequent month.Criteria: The Organization?s contract with Athens-Clarke County, Georgia section 3.5.1.2 requires the Organization to submit complete and accurate monthly detailed reports outlining expenditures by the 5th of each month. Effect: Failure to file accurate monthly reports on time places the Organization in noncompliance with its contract requirements. Cause: The Organization did not file monthly expenditure reports on time. The monthly reports submitted were incomplete and inaccurate. Recommendation: We recommend the Organization immediately implement a policy that ensures accurate monthly expenditure reports are filed by the 5th of each month. Management Response: Management concurs with this finding. Management will implement a policy to ensure accurate monthly expenditure reports are filed on time each month.
2022-001 Condition: The Organization?s financial structure lacks appropriate segregation of financial duties. Adequate segregation of financial duties is not present among purchasing, receipting, and approval of financial transactions. Criteria: ? 200.303(a) requires non-federal entities to establish and maintain effective internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Segregation of employees? duties is a common practice in an effective internal control structure. Segregation of duties is when specific employee functions related to important accounting areas (such as cash receipting and cash disbursements) are separated among different individuals to significantly reduce the risk that any one individual could intentionally or unintentionally misappropriate assets.Effect: Failure to implement and maintain adequate segregation of duties exposes the Organization to greater risk of noncompliance with federal awards requirements. Cause: The Chief Executive Officer initiates and approves all financial transactions without any oversight from the board of directors. Recommendation: We recommend that the Organization implement an internal control policy to review and approve the Chief Executive Officer?s financial activity. The individual assigned to review and approve the Executive Director?s transactions should possess the financial acumen to review and approve financial transactions and identify any issues or concerns. Management Response: Management concurs with this finding. Management will immediately implement procedures to segregate financial duties to the extent possible with available resources.
2022-002 Condition: The Organization?s Chief Executive Officer utilizes a debit card for federal award program purchases. Effectively, the Chief Executive Officer executes and authorizes his own purchases. Criteria: ? 200.303(a) requires non-federal entities to establish and maintain effective internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The duties of purchasing and approval should be segregated among several personnel or members of the board of directors. Segregation of employees? duties is a common practice in an effective internal control structure. Effect: Failure to maintain adequate segregation of duties exposes the assets of the Organization to greater risk of misappropriation and noncompliance with federal, state, and grant contract guidelines. Cause: The Chief Executive Officer utilizes a debit card for federal award program purchases. Recommendation: We recommend the Executive Director immediately discontinue the use of the debit card. Management Response: Management concurs with this finding. Management will immediately cease use of the debit card.
2022-003 Condition: The Organization?s procurement policy does not clearly describe and document the details required for adequate financial management of the Organization. For example, the policy does not explicitly state who has authority to execute and approve financial transactions such as payroll and check signing. Inclusion of these elements are essential to an effective procurement policy. Criteria: ? 200.318 requires non-federal entities to have and use documented procurement procedures. ? 200.320 outlines procurement methods required to make purchases in compliance within the federal guidelines. At a minimum, an effective procurement policy should clearly outline who has the authority to execute and approve financial transactions such as payroll and check signing. Further, it should outline the threshold levels for execution and approval of financial transactions. Effect: Failure to implement an adequate procurement policy exposes the assets of the Organization to greater risk of misappropriation and noncompliance with federal, state, and grant contract guidelines. Cause: The Organization?s procurement policy does not clearly outline who has the authority to execute and approve (including threshold levels) financial transactions. Recommendation: We recommend the Organization immediately update its procurement policy to explicitly state who has the authority to execute and approve financial transactions. The policy should include guidance on threshold levels for purchase amounts. Management Response: Management concurs with this finding. Management will implement a more robust procurement policy immediately.
2022-004 Condition: The Organization does not maintain supporting documentation for approved payrates in employee personnel files. Criteria: ? 200.303(a) requires non-federal entities to establish and maintain effective internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. An effective internal control structure necessitates a formal policy that documents approved payrates in employee personnel files. Effect: Failure to implement an adequate policy for documenting approved pay rates exposes the assets of the Organization to greater risk of misappropriation due to fraud. Cause: The Organization has not implemented a policy to maintain supporting documents of approved payrates in employee personnel files. Recommendation: At a minimum, the board of directors should approve pay rates for all employees yearly. Updated, approved payrates should be maintained in each employee?s personnel files or on an approved master list. Management Response: Management concurs with this finding. Management will immediately implement a payroll policy that requires documentation of approved payrates in employee personnel files.
2022-005 Condition: During our audit procedures, we noted that monthly expenditure reports were not filed accurately or by the required deadline, the 5th day of the subsequent month.Criteria: The Organization?s contract with Athens-Clarke County, Georgia section 3.5.1.2 requires the Organization to submit complete and accurate monthly detailed reports outlining expenditures by the 5th of each month. Effect: Failure to file accurate monthly reports on time places the Organization in noncompliance with its contract requirements. Cause: The Organization did not file monthly expenditure reports on time. The monthly reports submitted were incomplete and inaccurate. Recommendation: We recommend the Organization immediately implement a policy that ensures accurate monthly expenditure reports are filed by the 5th of each month. Management Response: Management concurs with this finding. Management will implement a policy to ensure accurate monthly expenditure reports are filed on time each month.