Audit 290474

FY End
2023-08-31
Total Expended
$11.61M
Findings
4
Programs
8
Organization: Easter Seals Serving Dc/md/va (MD)
Year: 2023 Accepted: 2024-02-14
Auditor: Aprio LLP

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
369083 2023-001 - Yes G
369084 2023-002 Significant Deficiency - L
945525 2023-001 - Yes G
945526 2023-002 Significant Deficiency - L

Contacts

Name Title Type
ZN9ZL7XENSB8 Bradley Freedman Auditee
3015888700 Mark Robins Auditor
No contacts on file

Notes to SEFA

Title: Basis of presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Such expenditures are recognized following the cost principles contained in OMB Circular A-122 “Cost Principles for Non-Profit Organizations” or in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal award activity of Easter Seals Serving DC | MD | VA, Inc. under programs of the federal government for the year ended August 31, 2023. 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 Easter Seals Serving DC | MD | VA, Inc., it is not intended to and does not present the financial position, changes in net assets, functional expenses, or cash flows of Easter Seals Serving DC | MD | VA, Inc.
Title: Summary of significant accounting policies Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Such expenditures are recognized following the cost principles contained in OMB Circular A-122 “Cost Principles for Non-Profit Organizations” or in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Such expenditures are recognized following the cost principles contained in OMB Circular A-122 “Cost Principles for Non-Profit Organizations” or in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: Indirect cost rate Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Such expenditures are recognized following the cost principles contained in OMB Circular A-122 “Cost Principles for Non-Profit Organizations” or in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Organization has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: Loan balances Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Such expenditures are recognized following the cost principles contained in OMB Circular A-122 “Cost Principles for Non-Profit Organizations” or in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Outstanding balances of government loans from federal sources at August 31, 2023 are as follows: United States Department of Housing and Urban Development Pass-through from D.C. Department of Housing and Community Development Community Development Block Grant (CDBG Cluster) $ 325,839 Community Development Block Grant (CDBG Cluster) 990,627 Total government loans outstanding (CDBG – Entitlement Grants Cluster) $ 1,316,466
Title: Reconciliation to revenue Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Such expenditures are recognized following the cost principles contained in OMB Circular A-122 “Cost Principles for Non-Profit Organizations” or in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. A reconciliation of the Schedule to the Statement of Activities and Changes in Net Assets for the year ended August 31, 2023 is as follows: Federal award expenditures $ 11,606,026 Less: Federal cost-reimbursement contract (777,454) Employee retention tax credit 57,094 Total government grants $ 10,885,666

Finding Details

Finding 2023-001: Reportable Finding - Failure to Meet Matching Requirement Program name: Head Start (Cluster) Assistance Listing: 93.600 Federal awarding agency: United States Department of Health and Human Services Compliance requirement: Matching, level of effort, earmarking Criteria: The grant agreement (03CH010635-05-00 and 03CH012317-01-00) for Head Start requires a non-federal matching of 20% unless a waiver is approved by the agency. Condition: As previously reported at 2022-04, the Organization did not meet the 20% non-federal match requirement for the year ended August 31, 2023, which includes the budget periods from August 1, 2022 through July 31, 2023 and August 1, 2023 through July 31, 2024. Context: It was determined that the matching requirement was not met due to not enough volunteer activity as a result of the COVID-19 pandemic. The Organization has requested a waiver from the agency. Cause: The Organization was not able to meet the non-federal matching contributions due to health department requirements to shut-down the Child Development Centers due to the COVID-19 pandemic. Due to the closures of the centers, there were fewer volunteer hours which the Organization uses to meet the matching requirement. Effect: The Organization is in violation of the matching requirement stipulated in the award agreement. Repeat finding: This is a repeat finding. Questioned costs: There are no questioned costs associated with this finding. Recommendation: We recommend that the Organization ensure that the non-federal matching requirements for each federal award be met every fiscal year or obtain a waiver. Management’s response and corrective action plan (unaudited): See corrective action plan.
Finding 2023-002: Reportable Finding Considered a Significant Deficiency - Failure to Meet Reporting Requirement Program name: Head Start (Cluster) Assistance Listing: 93.600 Federal awarding agency: United States Department of Health and Human Services Compliance requirement: Reporting Criteria: The grant agreement (03CH012075-02-02) for Head Start requires the submission of the Real Property Status Report (SF-429), as expenditures for leasehold improvements were reimbursed under the award during the year ended August 31, 2023. Condition: The Organization did not submit the SF-429 report due during the year ended August 31, 2023. Context: The year under audit was the first year the Organization was subject to these reporting requirements. Cause: The Organization is aware of the requirement and has requested assistance with the preparation of the report from the Federal agency, but has not received assistance as of the date of the audit report. Effect: The Organization did not meet reporting requirements for the award during the year ended August 31, 2023. Repeat finding: This is not a repeat finding. Questioned costs: There are no questioned costs associated with this finding. Recommendation: We recommend that the Organization follow up with the relevant parties to ensure proper reporting requirements are met on a timely basis. Management’s response and corrective action plan (unaudited): See corrective action plan.
Finding 2023-001: Reportable Finding - Failure to Meet Matching Requirement Program name: Head Start (Cluster) Assistance Listing: 93.600 Federal awarding agency: United States Department of Health and Human Services Compliance requirement: Matching, level of effort, earmarking Criteria: The grant agreement (03CH010635-05-00 and 03CH012317-01-00) for Head Start requires a non-federal matching of 20% unless a waiver is approved by the agency. Condition: As previously reported at 2022-04, the Organization did not meet the 20% non-federal match requirement for the year ended August 31, 2023, which includes the budget periods from August 1, 2022 through July 31, 2023 and August 1, 2023 through July 31, 2024. Context: It was determined that the matching requirement was not met due to not enough volunteer activity as a result of the COVID-19 pandemic. The Organization has requested a waiver from the agency. Cause: The Organization was not able to meet the non-federal matching contributions due to health department requirements to shut-down the Child Development Centers due to the COVID-19 pandemic. Due to the closures of the centers, there were fewer volunteer hours which the Organization uses to meet the matching requirement. Effect: The Organization is in violation of the matching requirement stipulated in the award agreement. Repeat finding: This is a repeat finding. Questioned costs: There are no questioned costs associated with this finding. Recommendation: We recommend that the Organization ensure that the non-federal matching requirements for each federal award be met every fiscal year or obtain a waiver. Management’s response and corrective action plan (unaudited): See corrective action plan.
Finding 2023-002: Reportable Finding Considered a Significant Deficiency - Failure to Meet Reporting Requirement Program name: Head Start (Cluster) Assistance Listing: 93.600 Federal awarding agency: United States Department of Health and Human Services Compliance requirement: Reporting Criteria: The grant agreement (03CH012075-02-02) for Head Start requires the submission of the Real Property Status Report (SF-429), as expenditures for leasehold improvements were reimbursed under the award during the year ended August 31, 2023. Condition: The Organization did not submit the SF-429 report due during the year ended August 31, 2023. Context: The year under audit was the first year the Organization was subject to these reporting requirements. Cause: The Organization is aware of the requirement and has requested assistance with the preparation of the report from the Federal agency, but has not received assistance as of the date of the audit report. Effect: The Organization did not meet reporting requirements for the award during the year ended August 31, 2023. Repeat finding: This is not a repeat finding. Questioned costs: There are no questioned costs associated with this finding. Recommendation: We recommend that the Organization follow up with the relevant parties to ensure proper reporting requirements are met on a timely basis. Management’s response and corrective action plan (unaudited): See corrective action plan.