FAC Explorer

Audit 27815

FY End
2022-09-30
Total Expended
$2.31M
Findings
4
Programs
3
Organization: Child Care Resources of Monmouth County, Inc. (NJ)
Year: 2022 Accepted: 2023-03-06
Auditor: Cullari Carrico LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
37417 2022-001 Significant Deficiency Yes L
37418 2022-002 Significant Deficiency - L
613859 2022-001 Significant Deficiency Yes L
613860 2022-002 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
93.575 Child Care and Development Block Grant $2.16M Yes 2
93.052 National Family Caregiver Support, Title Iii, Part E $88,476 - 0
10.558 Child and Adult Care Food Program $67,946 - 0

Contacts

Name Title Type
F4ACKMW4TW17 Doug Goudsward Auditee
7329189901 Robert Valas Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the schedule of expenditures of federal awards are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and New Jersey 15-08-OMB (Office of Management and Budget), Single Audit Policy for Recipients of Federal Grants, State Grants, and State Aid, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has not elected to use the 10-percent de minimus indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The information in the schedules are presented in accordance with the audit 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) and New Jersey 15-08-OMB (Office of Management and Budget), Single Audit Policy for Recipients of Federal Grants, State Grants, and State Aid. Because the schedules present only a selected portion of the operations of Child Care Resources of Monmouth County, Inc., they are not intended to and do not present the financial position, changes in net assets or cash flows of Child Care Resources of Monmouth County, Inc. Therefore, some amounts presented in the schedules may differ from amounts presented in, or used in the preparation of, the basic financial statements. Federal award program titles are reported as presented in the Catalog of Federal Domestic Assistance (CFDA).
Title: NEW JERSEY STATE SINGLE AUDIT POLICY Accounting Policies: Expenditures reported on the schedule of expenditures of federal awards are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and New Jersey 15-08-OMB (Office of Management and Budget), Single Audit Policy for Recipients of Federal Grants, State Grants, and State Aid, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has not elected to use the 10-percent de minimus indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The State of New Jersey requires all organizations that disburse federal grant, state grant or state aid funds to recipients that expend $750,000 or more in federal or state financial assistance within their fiscal year to have annual single audits or program-specific audits performed in accordance with the Uniform Guidance. All organizations that disburse federal grant, state grant or state aid funds to recipients that expend less than $750,000 in federal or state financial assistance within their fiscal year, but expend $100,000 or more in state and/or federal financial assistance within their fiscal year must have either a financial statement audit performed in accordance with Government Auditing Standards (Yellow Book) or a program-specific audit performed in accordance the Uniform Guidance.
Title: SUPPLEMENTAL FUNDING PROVIDED IN RESPONSE TO CORONAVIRUS Accounting Policies: Expenditures reported on the schedule of expenditures of federal awards are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and New Jersey 15-08-OMB (Office of Management and Budget), Single Audit Policy for Recipients of Federal Grants, State Grants, and State Aid, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has not elected to use the 10-percent de minimus indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Per the Office of Management and Budget (OMB) Memorandum M-20-21 and the CARES Act Pub. L. No. 116-136, reporting requirements apply to recipients receiving $150,000 or more in funding.

Finding Details

Finding 2022-001
Finding --- Internal controls over financial statement reporting lack segregation of duties. Criteria --- In order to detect, prevent and correct errors in financial reporting, a system of internal controls should be designed in order to overcome any lack of segregation of duties. Condition --- The chief financial officer reconciled bank accounts, created adjusting journal entries, prepared the Annex B and the Schedules of expenditures of federal awards and state financial assistance, maintained the general ledger and controlled the financial reporting process. Context --- The audit team assessed the design of internal controls surrounding this area and there was no evidence of review at a level higher than the chief financial officer, the person preparing the books and records. Effect --- When critical duties are not segregated, there is an increased risk of financial misstatement, whether by error or intentional, due to fraud. Cause --- Due to the size and nature of the Organization, accounting personnel are limited. Many critical duties are combined and assigned to employees with little management oversight. Recommendation --- The Organization should continue to seek out qualified personnel, board members or an external certified public accountant to perform reviews of accounting functions. Until a qualified hire is made, management and the board should continue to try and reassign tasks that could improve segregation of duties. Management response --- The Organization was awarded additional funding to fill necessary positions in the business office in order to provide segregation of duties. Due to the state of the overall economy, management faced challenges in recruiting and retaining personnel for the position. The Organization will continue to actively recruit for the position(s) necessary.
Finding 2022-002
Finding --- The reporting package was not made available to users timely. Criteria --- The Federal Audit Clearinghouse requires a reporting package to be submitted within the earlier of 30 days after receipt of the audit report(s), or nine months after the end of the audit period. Condition --- Cullari Carrico LLC (the audit firm) and the Organization submitted the reporting package on February 15, 2023. Context --- The audit team had a key member resign. Prior to termination, that employee inadvertently marked the assigned workflow as complete in lieu of reassigning the workflow and therefore the filing was never initiated within the required time frame. Effect --- The Organization cannot be considered low risk in the future year. Cause --- A late Federal Audit Clearinghouse Submission precludes the Organization from being considered low risk per the Uniform Guidance. Recommendation --- The audit firm and the Organization should develop procedures to ensure that future reporting packages are submitted to the Federal Audit Clearinghouse within the earlier of 30 days after receipt of the auditors? reports or 9 months after the end of the audit period. Management response --- The audit firm will work with the Organization to achieve a timetable that allows for timely completion of the audit and filing of the single audit report.
Finding 2022-001
Finding --- Internal controls over financial statement reporting lack segregation of duties. Criteria --- In order to detect, prevent and correct errors in financial reporting, a system of internal controls should be designed in order to overcome any lack of segregation of duties. Condition --- The chief financial officer reconciled bank accounts, created adjusting journal entries, prepared the Annex B and the Schedules of expenditures of federal awards and state financial assistance, maintained the general ledger and controlled the financial reporting process. Context --- The audit team assessed the design of internal controls surrounding this area and there was no evidence of review at a level higher than the chief financial officer, the person preparing the books and records. Effect --- When critical duties are not segregated, there is an increased risk of financial misstatement, whether by error or intentional, due to fraud. Cause --- Due to the size and nature of the Organization, accounting personnel are limited. Many critical duties are combined and assigned to employees with little management oversight. Recommendation --- The Organization should continue to seek out qualified personnel, board members or an external certified public accountant to perform reviews of accounting functions. Until a qualified hire is made, management and the board should continue to try and reassign tasks that could improve segregation of duties. Management response --- The Organization was awarded additional funding to fill necessary positions in the business office in order to provide segregation of duties. Due to the state of the overall economy, management faced challenges in recruiting and retaining personnel for the position. The Organization will continue to actively recruit for the position(s) necessary.
Finding 2022-002
Finding --- The reporting package was not made available to users timely. Criteria --- The Federal Audit Clearinghouse requires a reporting package to be submitted within the earlier of 30 days after receipt of the audit report(s), or nine months after the end of the audit period. Condition --- Cullari Carrico LLC (the audit firm) and the Organization submitted the reporting package on February 15, 2023. Context --- The audit team had a key member resign. Prior to termination, that employee inadvertently marked the assigned workflow as complete in lieu of reassigning the workflow and therefore the filing was never initiated within the required time frame. Effect --- The Organization cannot be considered low risk in the future year. Cause --- A late Federal Audit Clearinghouse Submission precludes the Organization from being considered low risk per the Uniform Guidance. Recommendation --- The audit firm and the Organization should develop procedures to ensure that future reporting packages are submitted to the Federal Audit Clearinghouse within the earlier of 30 days after receipt of the auditors? reports or 9 months after the end of the audit period. Management response --- The audit firm will work with the Organization to achieve a timetable that allows for timely completion of the audit and filing of the single audit report.