FAC Explorer

Audit 23531

FY End
2022-06-30
Total Expended
$6.21M
Findings
6
Programs
11
Organization: Career and Recovery Resources, Inc. (TX)
Year: 2022 Accepted: 2023-01-04
Auditor: Carr Riggs & Ingram LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
21209 2022-003 Significant Deficiency - BG
21210 2022-003 Significant Deficiency - BG
21211 2022-003 Significant Deficiency - BG
597651 2022-003 Significant Deficiency - BG
597652 2022-003 Significant Deficiency - BG
597653 2022-003 Significant Deficiency - BG

Programs

ALN Program Spent Major Findings
21.023 Covid-19 Emergency Rental Assistance Program $1.33M Yes 0
64.033 Covid -19 Va Supportive Services for Veteran Families Program $954,023 Yes 1
14.231 Covid-19 Emergency Solutions Grant Program $712,383 - 0
14.218 Covid-19 Community Development Block Grants/entitlement Grants $567,028 Yes 0
93.959 Block Grants for Prevention and Treatment of Substance Abuse $382,884 - 0
64.033 Va Supportive Services for Veteran Families Program $203,362 Yes 1
14.235 Supportive Housing Program $114,312 - 0
14.231 Emergency Solutions Grant Program $106,458 - 0
93.959 Women's Block Grants for Prevention and Treatment of Substance Abuse $50,167 - 0
64.033 Va Supportive Services for Veteran Families Program - Shallow Subsidy $33,298 Yes 1
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $9,199 - 0

Contacts

Name Title Type
X572E6M5A455 Kelly Young Auditee
7137547008 Ana Gallardo Auditor
No contacts on file

Notes to SEFA

Title: Note 1: BASIS OF PRESENTATION Accounting Policies: Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts, if any, shown on the Schedule represent adjustments or credit made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Note 6: INDIRECT COSTThe Agency has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance for the year ended June 30, 2022. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Career and Recovery Resources, Inc. (the Agency) under programs of the federal government for the year ended June 30, 2022. 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 the operations of the Agency, it is not intended to and does not present the financial position, change in net assets, or cash flows of the Agency.
Title: Note 3: RECONCILIATION TO FINANCIAL STATEMENTS Accounting Policies: Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts, if any, shown on the Schedule represent adjustments or credit made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Note 6: INDIRECT COSTThe Agency has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance for the year ended June 30, 2022. The following reconciles the accompanying schedule of expenditures of Federal awards to government fees and grants as reported in the financial statements of the Agency: Total expenditures of federal awards per accompanying schedule $6,214,934 plus State awards $66,330 plus Other federal and state vendor contracts $1,030,670 equal Total government fees and grants per Statements of Activities $7,311,934.
Title: Note 4: INSURANCE COVERAGE Accounting Policies: Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts, if any, shown on the Schedule represent adjustments or credit made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Note 6: INDIRECT COSTThe Agency has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance for the year ended June 30, 2022. During the year ended June 30, 2022, the Agency maintained the following types of insurance:?Commercial general liability including professional liability and property coverage includes $1,000,000 each occurrence, $3,000,000 general aggregate.?Automobile liability- $1,000,000 combined single limit.?Umbrella liability coverage includes $3,000,000 each occurrence, $3,000,000 aggregate.?Directors and officer liability (including fiduciary and employment practices)-$2,000,000 aggregate.?Workers compensation coverage includes $1,000,000 for each accident.
Title: Note 5: NONCASH ASSISTANCE Accounting Policies: Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts, if any, shown on the Schedule represent adjustments or credit made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Note 6: INDIRECT COSTThe Agency has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance for the year ended June 30, 2022. The Agency did not receive any federal noncash assistance for the year ended June 30, 2022.
Title: Note 7: LOANS AND LOAN GUARANTEES Accounting Policies: Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts, if any, shown on the Schedule represent adjustments or credit made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Note 6: INDIRECT COSTThe Agency has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance for the year ended June 30, 2022. The Agency did not have any loans or loan guarantee programs required to be reported on the Schedule for the year ended June 30, 2022.

Finding Details

Finding 2022-003
2022-003 Compliance and Internal Controls over Allowable Costs and Earmarking (Significant Deficiency) Assistance Listing Number 64.033 VA Supportive Services for Veteran Families, VA Supportive Services for Veteran Families ? Shallow Subsidy, and COVID ? 19 VA Supportive Services for Veteran Families 2020-2021 and 2021-2022 Funding U.S. Department of Veteran Affairs Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of administrative costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Furthermore, the grant agreement requires that no more than 10% of supportive services grant funds may be used for administrative costs. Condition: Indirect cost allocation methodology used by the Agency to charge expenses to the grant is not allowable per grant. Additionally, administrative costs charged to closed out grants during the year exceeded the total allowable administrative costs by $6,365. Cause: The Company was charging administrative expenses to the grant based on an internally drafted allocation methodology and not on actual administrative costs incurred, which is not in line with grant agreement. Additionally, with the turnover in the Agency, reconciliation of grant funds received to the maximum allowed administrative costs per the agreement was not performed. Effect: While indirect costs charged to grants may be allowable, these need to be supported by actual expense incurred or the Agency risks elimination of indirect costs from future awards and / or loss of entire award and / or return of unsubstantiated administrative costs to the grantor. Questioned Costs: $6,365 Perspective: Grantor has identified that the Agency?s indirect allocation methodology is not in compliance with award requirements. Methodology as revised by the Agency was still not deemed in compliance. Recommendation: The Agency should establish and follow allowable indirect allocation policy based on identifiable measures. The indirect costs charged to grant should be able to be substantiated by actual costs incurred. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
Finding 2022-003
2022-003 Compliance and Internal Controls over Allowable Costs and Earmarking (Significant Deficiency) Assistance Listing Number 64.033 VA Supportive Services for Veteran Families, VA Supportive Services for Veteran Families ? Shallow Subsidy, and COVID ? 19 VA Supportive Services for Veteran Families 2020-2021 and 2021-2022 Funding U.S. Department of Veteran Affairs Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of administrative costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Furthermore, the grant agreement requires that no more than 10% of supportive services grant funds may be used for administrative costs. Condition: Indirect cost allocation methodology used by the Agency to charge expenses to the grant is not allowable per grant. Additionally, administrative costs charged to closed out grants during the year exceeded the total allowable administrative costs by $6,365. Cause: The Company was charging administrative expenses to the grant based on an internally drafted allocation methodology and not on actual administrative costs incurred, which is not in line with grant agreement. Additionally, with the turnover in the Agency, reconciliation of grant funds received to the maximum allowed administrative costs per the agreement was not performed. Effect: While indirect costs charged to grants may be allowable, these need to be supported by actual expense incurred or the Agency risks elimination of indirect costs from future awards and / or loss of entire award and / or return of unsubstantiated administrative costs to the grantor. Questioned Costs: $6,365 Perspective: Grantor has identified that the Agency?s indirect allocation methodology is not in compliance with award requirements. Methodology as revised by the Agency was still not deemed in compliance. Recommendation: The Agency should establish and follow allowable indirect allocation policy based on identifiable measures. The indirect costs charged to grant should be able to be substantiated by actual costs incurred. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
Finding 2022-003
2022-003 Compliance and Internal Controls over Allowable Costs and Earmarking (Significant Deficiency) Assistance Listing Number 64.033 VA Supportive Services for Veteran Families, VA Supportive Services for Veteran Families ? Shallow Subsidy, and COVID ? 19 VA Supportive Services for Veteran Families 2020-2021 and 2021-2022 Funding U.S. Department of Veteran Affairs Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of administrative costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Furthermore, the grant agreement requires that no more than 10% of supportive services grant funds may be used for administrative costs. Condition: Indirect cost allocation methodology used by the Agency to charge expenses to the grant is not allowable per grant. Additionally, administrative costs charged to closed out grants during the year exceeded the total allowable administrative costs by $6,365. Cause: The Company was charging administrative expenses to the grant based on an internally drafted allocation methodology and not on actual administrative costs incurred, which is not in line with grant agreement. Additionally, with the turnover in the Agency, reconciliation of grant funds received to the maximum allowed administrative costs per the agreement was not performed. Effect: While indirect costs charged to grants may be allowable, these need to be supported by actual expense incurred or the Agency risks elimination of indirect costs from future awards and / or loss of entire award and / or return of unsubstantiated administrative costs to the grantor. Questioned Costs: $6,365 Perspective: Grantor has identified that the Agency?s indirect allocation methodology is not in compliance with award requirements. Methodology as revised by the Agency was still not deemed in compliance. Recommendation: The Agency should establish and follow allowable indirect allocation policy based on identifiable measures. The indirect costs charged to grant should be able to be substantiated by actual costs incurred. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
Finding 2022-003
2022-003 Compliance and Internal Controls over Allowable Costs and Earmarking (Significant Deficiency) Assistance Listing Number 64.033 VA Supportive Services for Veteran Families, VA Supportive Services for Veteran Families ? Shallow Subsidy, and COVID ? 19 VA Supportive Services for Veteran Families 2020-2021 and 2021-2022 Funding U.S. Department of Veteran Affairs Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of administrative costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Furthermore, the grant agreement requires that no more than 10% of supportive services grant funds may be used for administrative costs. Condition: Indirect cost allocation methodology used by the Agency to charge expenses to the grant is not allowable per grant. Additionally, administrative costs charged to closed out grants during the year exceeded the total allowable administrative costs by $6,365. Cause: The Company was charging administrative expenses to the grant based on an internally drafted allocation methodology and not on actual administrative costs incurred, which is not in line with grant agreement. Additionally, with the turnover in the Agency, reconciliation of grant funds received to the maximum allowed administrative costs per the agreement was not performed. Effect: While indirect costs charged to grants may be allowable, these need to be supported by actual expense incurred or the Agency risks elimination of indirect costs from future awards and / or loss of entire award and / or return of unsubstantiated administrative costs to the grantor. Questioned Costs: $6,365 Perspective: Grantor has identified that the Agency?s indirect allocation methodology is not in compliance with award requirements. Methodology as revised by the Agency was still not deemed in compliance. Recommendation: The Agency should establish and follow allowable indirect allocation policy based on identifiable measures. The indirect costs charged to grant should be able to be substantiated by actual costs incurred. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
Finding 2022-003
2022-003 Compliance and Internal Controls over Allowable Costs and Earmarking (Significant Deficiency) Assistance Listing Number 64.033 VA Supportive Services for Veteran Families, VA Supportive Services for Veteran Families ? Shallow Subsidy, and COVID ? 19 VA Supportive Services for Veteran Families 2020-2021 and 2021-2022 Funding U.S. Department of Veteran Affairs Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of administrative costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Furthermore, the grant agreement requires that no more than 10% of supportive services grant funds may be used for administrative costs. Condition: Indirect cost allocation methodology used by the Agency to charge expenses to the grant is not allowable per grant. Additionally, administrative costs charged to closed out grants during the year exceeded the total allowable administrative costs by $6,365. Cause: The Company was charging administrative expenses to the grant based on an internally drafted allocation methodology and not on actual administrative costs incurred, which is not in line with grant agreement. Additionally, with the turnover in the Agency, reconciliation of grant funds received to the maximum allowed administrative costs per the agreement was not performed. Effect: While indirect costs charged to grants may be allowable, these need to be supported by actual expense incurred or the Agency risks elimination of indirect costs from future awards and / or loss of entire award and / or return of unsubstantiated administrative costs to the grantor. Questioned Costs: $6,365 Perspective: Grantor has identified that the Agency?s indirect allocation methodology is not in compliance with award requirements. Methodology as revised by the Agency was still not deemed in compliance. Recommendation: The Agency should establish and follow allowable indirect allocation policy based on identifiable measures. The indirect costs charged to grant should be able to be substantiated by actual costs incurred. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
Finding 2022-003
2022-003 Compliance and Internal Controls over Allowable Costs and Earmarking (Significant Deficiency) Assistance Listing Number 64.033 VA Supportive Services for Veteran Families, VA Supportive Services for Veteran Families ? Shallow Subsidy, and COVID ? 19 VA Supportive Services for Veteran Families 2020-2021 and 2021-2022 Funding U.S. Department of Veteran Affairs Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of administrative costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Furthermore, the grant agreement requires that no more than 10% of supportive services grant funds may be used for administrative costs. Condition: Indirect cost allocation methodology used by the Agency to charge expenses to the grant is not allowable per grant. Additionally, administrative costs charged to closed out grants during the year exceeded the total allowable administrative costs by $6,365. Cause: The Company was charging administrative expenses to the grant based on an internally drafted allocation methodology and not on actual administrative costs incurred, which is not in line with grant agreement. Additionally, with the turnover in the Agency, reconciliation of grant funds received to the maximum allowed administrative costs per the agreement was not performed. Effect: While indirect costs charged to grants may be allowable, these need to be supported by actual expense incurred or the Agency risks elimination of indirect costs from future awards and / or loss of entire award and / or return of unsubstantiated administrative costs to the grantor. Questioned Costs: $6,365 Perspective: Grantor has identified that the Agency?s indirect allocation methodology is not in compliance with award requirements. Methodology as revised by the Agency was still not deemed in compliance. Recommendation: The Agency should establish and follow allowable indirect allocation policy based on identifiable measures. The indirect costs charged to grant should be able to be substantiated by actual costs incurred. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.