Audit 292503

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.

Type of Finding: Significant weakness in internal control over financials reporting, other matters Condition: The Organization did not file the single audit reporting package within 9 months after the year end. In addition, the Organization did not file annual audited financial statements within the required timeframe, including extensions, 2 CFR 200.512 Criteria: Based on the requirement in 2 CFR 200.512, report submission, the Organization is required to submit single audit reporting package within nine months after the Organization’s year end. Context: The Organization was unaware of the requirements for filing single audit reporting package within 9 months of the Organization’s year end being the first year they were required to have a Single Audit. Cause: Co-vid created a delay in having their annual audit in a timely matter due for both the Organization and the Auditor. Recommendation: We recommend that the organization improve the process for timely financial reporting Planned Corrective Action The organization agrees with the findings and is making every effort to catchup the time of completion of the Data collection form and the audit to be in compliance with financial reporting and single audit requirements.

Type of Finding: Significant weakness in allocation of administrative costs for financial reporting. Condition: For the major programs selected Dallas County System of Services, Inc. uses the de minimis 10% allocation of indirect administrative costs if indirect administrative costs are allowed for the grant. If not allowed for the grant, they are built in the approved grant budget at a rate lower than 10% allowed, so there is no reportable weakness for major programs. For financial reporting, there is no formal explainable allocation of administrative costs which could distort proper allocation of administrative costs. Costs are allocated for the administrative and accounting salaries at the budget level based on estimated time spent on programs and the remaining costs are posted to management and general for the program based on estimated non explainable allocations. Also noted in management and general, some costs that could be considered joint program costs (i.e. rent and occupancy for buildings which program supervisors are located) which could be spread to program costs of the grant based on square footages used by the program. Criteria: Under the Uniform Guidance (2 CFR 200) the organization has elected the 10 percent de minimis cost rate. Normally if the de minimis rate is elected under Uniform Guidance requires that you use the Modified Direct cost as your cost base which the Organization does on its grant budgets for federal costs. However, for financial reporting purposes there is no formal explainable allocation of indirect (administrative) costs which could distort the cost to run each program of the organization. Context: For financial reporting purposes the Organization is still using the same allocation method it used when there were only 4 grants with 1 large grant. With additional grants this allocation method may not be effective, and it is not easily explainable and there is no formal allocation of indirect costs to each program. Cause: Additional grants received by the Organization made the old allocation method not effective and not explainable. Recommendation: Come up with a formal allocation method to allocated indirect costs to each program using an explainable method (i.e. direct program costs to total direct costs) and review posting to administrative costs for joint program costs (i.e. Rent and Occupancy) and spread these costs to programs used based on an explainable method (i.e. square footage of program to total square footage). Planned corrective actions The organization agrees with the findings and will start implementing procedures to make their allocation of indirect costs using an explainable method allowed by uniform guidance and consistent with all programs.

Type of finding: Significant weakness in Internal Controls over cash disbursements. Condition: The Organization’s internal controls require a purchase order and or a check request for all non-payroll cash disbursements. When testing cash disbursements, it was noted this procedure was not always followed; however they did have an overriding control of review of bill, and allowability to budget before any checks were signed. Criteria: Strong internal controls requires authorization and approval of all purchases made by the Organization. Context: The Organization’s internal controls require authorization and approval for all non-payroll cash disbursements but they were not always followed. Cause Not following all the authorization and approval could allow an improper payment to be made. Recommendation: Require all non-payroll purchases to have a purchase order and/or a check request. Planned corrective actions: The Organization had implemented a new purchase order system and have simplified the check requests to make it easier to follow and will use for all non payroll, and non reoccurring purchases.

Type of finding: Lack of separation of duties Condition- Given the Organizations small size and limited staff created challenges in achieving robust segregation of duties especially within the disbursements and payroll process. Criteria: Proper segregation of duties is essential for minimizing errors, preventing fraud, and maintaining financial integrity within the Organization. Cause: Limited number of staff Recommendation: The organization needs to spread the duties to best separate the duties of authorizing the transaction, from entering the transaction, from paying the transaction, from reconciling the transaction, from reporting the transaction. Planned Corrective Action The organization agrees with the finding and has hired a new employee to separate the payroll from the disbursement and to further separate the duties of authorization, from data entry, to payment, from reconciling, and will perform additional overriding controls for timely reviewing the monthly reports.