2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
2023-005 Allocation of Costs Based on Budgeted Numbers
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Allowable Costs/Cost Principles
Criteria – Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals.
Condition – The Organization’s current method of charging some indirect costs to grants is based on budgeted allocations. Specifically, the allocation of workers compensation and facilities charges are based on budgeted allocations. Also, several individuals who work on multiple programs allocate their time to grants based on a budget allocation. The Organization did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine.
Cause – Due to the change in the accounting system, the true up of these costs was not performed as required in the financial policies.
Effect – Some of the programs and related federal grants may have been overcharged.
Recommendations – The Organization should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed.
Auditee's comments and response – Management agrees with the finding and plans to true up budgeted allocations with actual allocations annually effective fiscal year 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-002
2023-005 Allocation of Costs Based on Budgeted Numbers
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Allowable Costs/Cost Principles
Criteria – Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals.
Condition – The Organization’s current method of charging some indirect costs to grants is based on budgeted allocations. Specifically, the allocation of workers compensation and facilities charges are based on budgeted allocations. Also, several individuals who work on multiple programs allocate their time to grants based on a budget allocation. The Organization did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine.
Cause – Due to the change in the accounting system, the true up of these costs was not performed as required in the financial policies.
Effect – Some of the programs and related federal grants may have been overcharged.
Recommendations – The Organization should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed.
Auditee's comments and response – Management agrees with the finding and plans to true up budgeted allocations with actual allocations annually effective fiscal year 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-002
2023-005 Allocation of Costs Based on Budgeted Numbers
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Allowable Costs/Cost Principles
Criteria – Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals.
Condition – The Organization’s current method of charging some indirect costs to grants is based on budgeted allocations. Specifically, the allocation of workers compensation and facilities charges are based on budgeted allocations. Also, several individuals who work on multiple programs allocate their time to grants based on a budget allocation. The Organization did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine.
Cause – Due to the change in the accounting system, the true up of these costs was not performed as required in the financial policies.
Effect – Some of the programs and related federal grants may have been overcharged.
Recommendations – The Organization should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed.
Auditee's comments and response – Management agrees with the finding and plans to true up budgeted allocations with actual allocations annually effective fiscal year 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-002
2023-005 Allocation of Costs Based on Budgeted Numbers
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Allowable Costs/Cost Principles
Criteria – Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals.
Condition – The Organization’s current method of charging some indirect costs to grants is based on budgeted allocations. Specifically, the allocation of workers compensation and facilities charges are based on budgeted allocations. Also, several individuals who work on multiple programs allocate their time to grants based on a budget allocation. The Organization did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine.
Cause – Due to the change in the accounting system, the true up of these costs was not performed as required in the financial policies.
Effect – Some of the programs and related federal grants may have been overcharged.
Recommendations – The Organization should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed.
Auditee's comments and response – Management agrees with the finding and plans to true up budgeted allocations with actual allocations annually effective fiscal year 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-002
2023-005 Allocation of Costs Based on Budgeted Numbers
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Allowable Costs/Cost Principles
Criteria – Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals.
Condition – The Organization’s current method of charging some indirect costs to grants is based on budgeted allocations. Specifically, the allocation of workers compensation and facilities charges are based on budgeted allocations. Also, several individuals who work on multiple programs allocate their time to grants based on a budget allocation. The Organization did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine.
Cause – Due to the change in the accounting system, the true up of these costs was not performed as required in the financial policies.
Effect – Some of the programs and related federal grants may have been overcharged.
Recommendations – The Organization should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed.
Auditee's comments and response – Management agrees with the finding and plans to true up budgeted allocations with actual allocations annually effective fiscal year 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-002
2023-006 Reasonable Rents Documentation
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Special Tests and Provisions
Criteria – Assistance Listing 14.267 requirements state that a non-federal entity using grant funds for rents must insure the rents be reasonable in relation to rents being charged in the area for comparable space (i.e. not exceeding the HUD-determined fair market rents). Good controls around this process would ensure that the process be documented and that a review be performed by someone other than the preparer.
Condition – During our procedures for testing the reasonable rent rates, we noted files that did not have the proper compliance documentation for controls.
Cause – This occurred because there was no procedure in place to document the source of the reasonable rent check, when the reasonable rent check was performed, or who reviewed the results.
Context – We tested 4 of a population of 40 case files. None of the files had documentation of when review was performed of the rental rate check. Additional, 2 of the 4 case files tested did not have documentation around when the reasonable rent check was run.
Effect – Participants of this program may receive rents in excess of the HUD-determined fair market rents or receive rent payments that are not comparable to units in the applicable area. As a result, the Organization may be overcharging the grant for ineligible costs.
Recommendation – We recommend that the Organization adopt a policy to consistently document the source of the reasonable rent check, when the reasonable rent check was performed, and who reviewed the results of the rent check.
Auditee's comments and response – Management has reviewed the current practice and has implemented a new form for documenting the determination and approvals in the case files.
Responsible party for corrective action: Laura Straw, Finance Director and Elizabeth Machart, Director of Contracts, Compliance, & Special Initiatives
Repeat Finding: No
2023-006 Reasonable Rents Documentation
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Special Tests and Provisions
Criteria – Assistance Listing 14.267 requirements state that a non-federal entity using grant funds for rents must insure the rents be reasonable in relation to rents being charged in the area for comparable space (i.e. not exceeding the HUD-determined fair market rents). Good controls around this process would ensure that the process be documented and that a review be performed by someone other than the preparer.
Condition – During our procedures for testing the reasonable rent rates, we noted files that did not have the proper compliance documentation for controls.
Cause – This occurred because there was no procedure in place to document the source of the reasonable rent check, when the reasonable rent check was performed, or who reviewed the results.
Context – We tested 4 of a population of 40 case files. None of the files had documentation of when review was performed of the rental rate check. Additional, 2 of the 4 case files tested did not have documentation around when the reasonable rent check was run.
Effect – Participants of this program may receive rents in excess of the HUD-determined fair market rents or receive rent payments that are not comparable to units in the applicable area. As a result, the Organization may be overcharging the grant for ineligible costs.
Recommendation – We recommend that the Organization adopt a policy to consistently document the source of the reasonable rent check, when the reasonable rent check was performed, and who reviewed the results of the rent check.
Auditee's comments and response – Management has reviewed the current practice and has implemented a new form for documenting the determination and approvals in the case files.
Responsible party for corrective action: Laura Straw, Finance Director and Elizabeth Machart, Director of Contracts, Compliance, & Special Initiatives
Repeat Finding: No
2023-006 Reasonable Rents Documentation
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Special Tests and Provisions
Criteria – Assistance Listing 14.267 requirements state that a non-federal entity using grant funds for rents must insure the rents be reasonable in relation to rents being charged in the area for comparable space (i.e. not exceeding the HUD-determined fair market rents). Good controls around this process would ensure that the process be documented and that a review be performed by someone other than the preparer.
Condition – During our procedures for testing the reasonable rent rates, we noted files that did not have the proper compliance documentation for controls.
Cause – This occurred because there was no procedure in place to document the source of the reasonable rent check, when the reasonable rent check was performed, or who reviewed the results.
Context – We tested 4 of a population of 40 case files. None of the files had documentation of when review was performed of the rental rate check. Additional, 2 of the 4 case files tested did not have documentation around when the reasonable rent check was run.
Effect – Participants of this program may receive rents in excess of the HUD-determined fair market rents or receive rent payments that are not comparable to units in the applicable area. As a result, the Organization may be overcharging the grant for ineligible costs.
Recommendation – We recommend that the Organization adopt a policy to consistently document the source of the reasonable rent check, when the reasonable rent check was performed, and who reviewed the results of the rent check.
Auditee's comments and response – Management has reviewed the current practice and has implemented a new form for documenting the determination and approvals in the case files.
Responsible party for corrective action: Laura Straw, Finance Director and Elizabeth Machart, Director of Contracts, Compliance, & Special Initiatives
Repeat Finding: No
2023-006 Reasonable Rents Documentation
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Special Tests and Provisions
Criteria – Assistance Listing 14.267 requirements state that a non-federal entity using grant funds for rents must insure the rents be reasonable in relation to rents being charged in the area for comparable space (i.e. not exceeding the HUD-determined fair market rents). Good controls around this process would ensure that the process be documented and that a review be performed by someone other than the preparer.
Condition – During our procedures for testing the reasonable rent rates, we noted files that did not have the proper compliance documentation for controls.
Cause – This occurred because there was no procedure in place to document the source of the reasonable rent check, when the reasonable rent check was performed, or who reviewed the results.
Context – We tested 4 of a population of 40 case files. None of the files had documentation of when review was performed of the rental rate check. Additional, 2 of the 4 case files tested did not have documentation around when the reasonable rent check was run.
Effect – Participants of this program may receive rents in excess of the HUD-determined fair market rents or receive rent payments that are not comparable to units in the applicable area. As a result, the Organization may be overcharging the grant for ineligible costs.
Recommendation – We recommend that the Organization adopt a policy to consistently document the source of the reasonable rent check, when the reasonable rent check was performed, and who reviewed the results of the rent check.
Auditee's comments and response – Management has reviewed the current practice and has implemented a new form for documenting the determination and approvals in the case files.
Responsible party for corrective action: Laura Straw, Finance Director and Elizabeth Machart, Director of Contracts, Compliance, & Special Initiatives
Repeat Finding: No
2023-006 Reasonable Rents Documentation
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Special Tests and Provisions
Criteria – Assistance Listing 14.267 requirements state that a non-federal entity using grant funds for rents must insure the rents be reasonable in relation to rents being charged in the area for comparable space (i.e. not exceeding the HUD-determined fair market rents). Good controls around this process would ensure that the process be documented and that a review be performed by someone other than the preparer.
Condition – During our procedures for testing the reasonable rent rates, we noted files that did not have the proper compliance documentation for controls.
Cause – This occurred because there was no procedure in place to document the source of the reasonable rent check, when the reasonable rent check was performed, or who reviewed the results.
Context – We tested 4 of a population of 40 case files. None of the files had documentation of when review was performed of the rental rate check. Additional, 2 of the 4 case files tested did not have documentation around when the reasonable rent check was run.
Effect – Participants of this program may receive rents in excess of the HUD-determined fair market rents or receive rent payments that are not comparable to units in the applicable area. As a result, the Organization may be overcharging the grant for ineligible costs.
Recommendation – We recommend that the Organization adopt a policy to consistently document the source of the reasonable rent check, when the reasonable rent check was performed, and who reviewed the results of the rent check.
Auditee's comments and response – Management has reviewed the current practice and has implemented a new form for documenting the determination and approvals in the case files.
Responsible party for corrective action: Laura Straw, Finance Director and Elizabeth Machart, Director of Contracts, Compliance, & Special Initiatives
Repeat Finding: No
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-001 Audit Adjustments and Oversight of the Financial Reporting Process
Material Weakness
Criteria – Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America.
Condition – During the audit for the year ended June 30, 2023, 12 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries mostly were to correct errors that occurred in the accounting system transition which occurred in early 2023. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Organization’s financial statements. We consider this to be a material weakness because a misstatement of financial statements could occur and not be prevented or detected.
Cause – Changes in the accounting systems along with several temporary employees and the change in HR director resulted in some unusual adjustments during the year that were not recorded correctly and not identified before the audit began.
Effect – A material misstatement of the financial statements could occur and not be prevented or detected.
Recommendation – We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. This process should include reconciling significant statement of financial position line items to supporting schedules each month, such as bank reconciliations, receivable aging’s, depreciation schedules, etc.
Auditee's comments and response – Management agrees with the finding. Management developed and implemented a new financial review process as of February 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-001
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-002 Lack of Review on Payroll Transactions/Payroll Files
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process. A key element of internal control for payroll is the review of biweekly payroll transactions and the periodic review of personnel files.
Condition – Management discovered after the termination of a former Human Resources employee that there were significant errors in benefits. These were all corrected by year-end, but were not discovered and corrected until after her termination (i.e. Employee Benefit Plan errors, health insurance errors, life insurance errors, etc.). These errors crossed multiple years.
Cause – The HR Director the Organization inherited in the merger with House of Charities in 2021 was not qualified to do her job, but this was not obvious to management until after she left the Organization.
Effect – As a result of this condition, the Organization is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis. For example, incorrect costs may be paid due to not properly terminating benefits for former employees or not properly applying pay rate changes, or employees may not be receiving the benefits they are due because new employees were not added properly.
Recommendation – We encourage the Organization’s management to review their processes related to payroll and benefits to ensure the individual responsible for reviewing this information is qualified to perform the function and that the reviews take place timely and are documented appropriately.
Auditee's comments and response – Management agrees with the finding. Management is reviewing and assessing all of the payroll and human resources functions, and HR plans to hire additional staff. They expect to fully implement the new process by July 1, 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
2023-003 Lack of Support for Credit Card Charges for Former Employees
Significant Deficiency
Criteria – Management is responsible for establishing and maintaining internal controls over organizational credit cards in order to safeguard the assets of the Organization. A key element of internal control is the review and approval of supporting documentation submitted by employees for credit card transactions.
Condition – The Organization designed a control which required documentation, review and approval for credit card charges. However, this control was not enforced and credit card charges were paid by the Organization without any support showing the costs related to the Organization.
Cause – During the transition between Executive Directors, the Interim Executive Director waived this requirement to increase morale.
Effect – The Organization may have reimbursed costs that were not for the benefit of the Organization.
Recommendation – We recommend the Organization reinstate the policy and educate its employees regarding Organization credit card charges, and then make sure to enforce the policy. The Organization should consider reviewing and updating their policies and procedures.
Auditee's comments and response – Management agrees with the finding. Management has re-instated the credit card receipt policy and has begun to enforce this policy. Management is also taking action to review current policies and procedures surrounding employee credit cards and reimbursements.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: No
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
Finding 2023-004 – Lack of Documentation in Payroll Files
Material Weakness
Criteria – Management is responsible for establishing and maintaining internal controls over the payroll process, including maintaining proper documentation in personnel files. Uniform Guidance and the employee benefit plan audit specifically require adequate documentation of pay rates, benefit elections, time allocations, etc. to provide reasonable assurance that the amounts paid and deducted are accurate, allowable, and properly allocated.
Condition – During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Additionally, we noted that there was missing evidence of recent training, program allocation documentation, and recent annual performance evaluations.
Cause – The Organization’s policies and procedure around maintaining personnel file documentation were not followed by the Human Resources department.
Context – The number of deviations noted below for personnel file testing are as follows:
• Missing approved payrate letters for 4 of 7 employees selected.
• 2 of 7 employee selected did not have recent training in their file.
• 3 of the 7 employees did not have a program allocation documented in their file.
• 4 of the 7 employees selected did not have recent performance evaluations.
Effect – Effects could include:
• Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer.
• Salaries or wages may be overcharged or undercharged to grants if the proper program allocation is not documented.
• Benefits due to employees may not be appropriately paid or deducted, violating applicable laws and/or regulations
• Employees may not receive the proper training to execute program functions effectively.
• Management cannot develop expectations or standards for the program if employee performance is not being reviewed timely.
Recommendation – We recommend that the Organization implement policies and procedures around maintaining personnel files to ensure consistent and appropriate documentation for approvals of all pay rates, recent trainings, program allocations, and performance evaluations in individual personnel files to ensure that all wage rate approvals are documented in employee personnel files, recent training documentation is maintained, approved program allocations are documented, performance evaluations are performed and documented and proper benefits are paid or deducted.
Auditee's comments and response – Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue.
Responsible party for corrective action: Laura Straw, Director of Finance and Morcine Scott-Warren, Deputy Director of HR and Dei.
Repeat Finding: Yes, 2022-003
2023-005 Allocation of Costs Based on Budgeted Numbers
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Allowable Costs/Cost Principles
Criteria – Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals.
Condition – The Organization’s current method of charging some indirect costs to grants is based on budgeted allocations. Specifically, the allocation of workers compensation and facilities charges are based on budgeted allocations. Also, several individuals who work on multiple programs allocate their time to grants based on a budget allocation. The Organization did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine.
Cause – Due to the change in the accounting system, the true up of these costs was not performed as required in the financial policies.
Effect – Some of the programs and related federal grants may have been overcharged.
Recommendations – The Organization should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed.
Auditee's comments and response – Management agrees with the finding and plans to true up budgeted allocations with actual allocations annually effective fiscal year 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-002
2023-005 Allocation of Costs Based on Budgeted Numbers
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Allowable Costs/Cost Principles
Criteria – Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals.
Condition – The Organization’s current method of charging some indirect costs to grants is based on budgeted allocations. Specifically, the allocation of workers compensation and facilities charges are based on budgeted allocations. Also, several individuals who work on multiple programs allocate their time to grants based on a budget allocation. The Organization did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine.
Cause – Due to the change in the accounting system, the true up of these costs was not performed as required in the financial policies.
Effect – Some of the programs and related federal grants may have been overcharged.
Recommendations – The Organization should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed.
Auditee's comments and response – Management agrees with the finding and plans to true up budgeted allocations with actual allocations annually effective fiscal year 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-002
2023-005 Allocation of Costs Based on Budgeted Numbers
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Allowable Costs/Cost Principles
Criteria – Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals.
Condition – The Organization’s current method of charging some indirect costs to grants is based on budgeted allocations. Specifically, the allocation of workers compensation and facilities charges are based on budgeted allocations. Also, several individuals who work on multiple programs allocate their time to grants based on a budget allocation. The Organization did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine.
Cause – Due to the change in the accounting system, the true up of these costs was not performed as required in the financial policies.
Effect – Some of the programs and related federal grants may have been overcharged.
Recommendations – The Organization should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed.
Auditee's comments and response – Management agrees with the finding and plans to true up budgeted allocations with actual allocations annually effective fiscal year 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-002
2023-005 Allocation of Costs Based on Budgeted Numbers
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Allowable Costs/Cost Principles
Criteria – Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals.
Condition – The Organization’s current method of charging some indirect costs to grants is based on budgeted allocations. Specifically, the allocation of workers compensation and facilities charges are based on budgeted allocations. Also, several individuals who work on multiple programs allocate their time to grants based on a budget allocation. The Organization did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine.
Cause – Due to the change in the accounting system, the true up of these costs was not performed as required in the financial policies.
Effect – Some of the programs and related federal grants may have been overcharged.
Recommendations – The Organization should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed.
Auditee's comments and response – Management agrees with the finding and plans to true up budgeted allocations with actual allocations annually effective fiscal year 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-002
2023-005 Allocation of Costs Based on Budgeted Numbers
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Allowable Costs/Cost Principles
Criteria – Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals.
Condition – The Organization’s current method of charging some indirect costs to grants is based on budgeted allocations. Specifically, the allocation of workers compensation and facilities charges are based on budgeted allocations. Also, several individuals who work on multiple programs allocate their time to grants based on a budget allocation. The Organization did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine.
Cause – Due to the change in the accounting system, the true up of these costs was not performed as required in the financial policies.
Effect – Some of the programs and related federal grants may have been overcharged.
Recommendations – The Organization should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed.
Auditee's comments and response – Management agrees with the finding and plans to true up budgeted allocations with actual allocations annually effective fiscal year 2024.
Responsible party for corrective action: Laura Straw, Finance Director
Repeat Finding: Yes, 2022-002
2023-006 Reasonable Rents Documentation
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Special Tests and Provisions
Criteria – Assistance Listing 14.267 requirements state that a non-federal entity using grant funds for rents must insure the rents be reasonable in relation to rents being charged in the area for comparable space (i.e. not exceeding the HUD-determined fair market rents). Good controls around this process would ensure that the process be documented and that a review be performed by someone other than the preparer.
Condition – During our procedures for testing the reasonable rent rates, we noted files that did not have the proper compliance documentation for controls.
Cause – This occurred because there was no procedure in place to document the source of the reasonable rent check, when the reasonable rent check was performed, or who reviewed the results.
Context – We tested 4 of a population of 40 case files. None of the files had documentation of when review was performed of the rental rate check. Additional, 2 of the 4 case files tested did not have documentation around when the reasonable rent check was run.
Effect – Participants of this program may receive rents in excess of the HUD-determined fair market rents or receive rent payments that are not comparable to units in the applicable area. As a result, the Organization may be overcharging the grant for ineligible costs.
Recommendation – We recommend that the Organization adopt a policy to consistently document the source of the reasonable rent check, when the reasonable rent check was performed, and who reviewed the results of the rent check.
Auditee's comments and response – Management has reviewed the current practice and has implemented a new form for documenting the determination and approvals in the case files.
Responsible party for corrective action: Laura Straw, Finance Director and Elizabeth Machart, Director of Contracts, Compliance, & Special Initiatives
Repeat Finding: No
2023-006 Reasonable Rents Documentation
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Special Tests and Provisions
Criteria – Assistance Listing 14.267 requirements state that a non-federal entity using grant funds for rents must insure the rents be reasonable in relation to rents being charged in the area for comparable space (i.e. not exceeding the HUD-determined fair market rents). Good controls around this process would ensure that the process be documented and that a review be performed by someone other than the preparer.
Condition – During our procedures for testing the reasonable rent rates, we noted files that did not have the proper compliance documentation for controls.
Cause – This occurred because there was no procedure in place to document the source of the reasonable rent check, when the reasonable rent check was performed, or who reviewed the results.
Context – We tested 4 of a population of 40 case files. None of the files had documentation of when review was performed of the rental rate check. Additional, 2 of the 4 case files tested did not have documentation around when the reasonable rent check was run.
Effect – Participants of this program may receive rents in excess of the HUD-determined fair market rents or receive rent payments that are not comparable to units in the applicable area. As a result, the Organization may be overcharging the grant for ineligible costs.
Recommendation – We recommend that the Organization adopt a policy to consistently document the source of the reasonable rent check, when the reasonable rent check was performed, and who reviewed the results of the rent check.
Auditee's comments and response – Management has reviewed the current practice and has implemented a new form for documenting the determination and approvals in the case files.
Responsible party for corrective action: Laura Straw, Finance Director and Elizabeth Machart, Director of Contracts, Compliance, & Special Initiatives
Repeat Finding: No
2023-006 Reasonable Rents Documentation
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Special Tests and Provisions
Criteria – Assistance Listing 14.267 requirements state that a non-federal entity using grant funds for rents must insure the rents be reasonable in relation to rents being charged in the area for comparable space (i.e. not exceeding the HUD-determined fair market rents). Good controls around this process would ensure that the process be documented and that a review be performed by someone other than the preparer.
Condition – During our procedures for testing the reasonable rent rates, we noted files that did not have the proper compliance documentation for controls.
Cause – This occurred because there was no procedure in place to document the source of the reasonable rent check, when the reasonable rent check was performed, or who reviewed the results.
Context – We tested 4 of a population of 40 case files. None of the files had documentation of when review was performed of the rental rate check. Additional, 2 of the 4 case files tested did not have documentation around when the reasonable rent check was run.
Effect – Participants of this program may receive rents in excess of the HUD-determined fair market rents or receive rent payments that are not comparable to units in the applicable area. As a result, the Organization may be overcharging the grant for ineligible costs.
Recommendation – We recommend that the Organization adopt a policy to consistently document the source of the reasonable rent check, when the reasonable rent check was performed, and who reviewed the results of the rent check.
Auditee's comments and response – Management has reviewed the current practice and has implemented a new form for documenting the determination and approvals in the case files.
Responsible party for corrective action: Laura Straw, Finance Director and Elizabeth Machart, Director of Contracts, Compliance, & Special Initiatives
Repeat Finding: No
2023-006 Reasonable Rents Documentation
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Special Tests and Provisions
Criteria – Assistance Listing 14.267 requirements state that a non-federal entity using grant funds for rents must insure the rents be reasonable in relation to rents being charged in the area for comparable space (i.e. not exceeding the HUD-determined fair market rents). Good controls around this process would ensure that the process be documented and that a review be performed by someone other than the preparer.
Condition – During our procedures for testing the reasonable rent rates, we noted files that did not have the proper compliance documentation for controls.
Cause – This occurred because there was no procedure in place to document the source of the reasonable rent check, when the reasonable rent check was performed, or who reviewed the results.
Context – We tested 4 of a population of 40 case files. None of the files had documentation of when review was performed of the rental rate check. Additional, 2 of the 4 case files tested did not have documentation around when the reasonable rent check was run.
Effect – Participants of this program may receive rents in excess of the HUD-determined fair market rents or receive rent payments that are not comparable to units in the applicable area. As a result, the Organization may be overcharging the grant for ineligible costs.
Recommendation – We recommend that the Organization adopt a policy to consistently document the source of the reasonable rent check, when the reasonable rent check was performed, and who reviewed the results of the rent check.
Auditee's comments and response – Management has reviewed the current practice and has implemented a new form for documenting the determination and approvals in the case files.
Responsible party for corrective action: Laura Straw, Finance Director and Elizabeth Machart, Director of Contracts, Compliance, & Special Initiatives
Repeat Finding: No
2023-006 Reasonable Rents Documentation
Federal Program – Continuum of Care
Assistance Listing # 14.267
Compliance & Significant Deficiency
Category of Finding – Special Tests and Provisions
Criteria – Assistance Listing 14.267 requirements state that a non-federal entity using grant funds for rents must insure the rents be reasonable in relation to rents being charged in the area for comparable space (i.e. not exceeding the HUD-determined fair market rents). Good controls around this process would ensure that the process be documented and that a review be performed by someone other than the preparer.
Condition – During our procedures for testing the reasonable rent rates, we noted files that did not have the proper compliance documentation for controls.
Cause – This occurred because there was no procedure in place to document the source of the reasonable rent check, when the reasonable rent check was performed, or who reviewed the results.
Context – We tested 4 of a population of 40 case files. None of the files had documentation of when review was performed of the rental rate check. Additional, 2 of the 4 case files tested did not have documentation around when the reasonable rent check was run.
Effect – Participants of this program may receive rents in excess of the HUD-determined fair market rents or receive rent payments that are not comparable to units in the applicable area. As a result, the Organization may be overcharging the grant for ineligible costs.
Recommendation – We recommend that the Organization adopt a policy to consistently document the source of the reasonable rent check, when the reasonable rent check was performed, and who reviewed the results of the rent check.
Auditee's comments and response – Management has reviewed the current practice and has implemented a new form for documenting the determination and approvals in the case files.
Responsible party for corrective action: Laura Straw, Finance Director and Elizabeth Machart, Director of Contracts, Compliance, & Special Initiatives
Repeat Finding: No