Condition: Our examination of the Foundation’s Schedule of Expenditures of Federal Awards (SEFA) found
various errors that resulted in adjustments to both direct and indirect grant revenue. We received several
iterations of the SEFA and adjustments had to be made to each version before a complete SEFA was
received that reconciled to the general ledger.
Criteria: The SEFA is used to determine the amount expended for federal grants that is reported to the
government.
Cause: There is a lack of established procedures for preparing and reviewing the SEFA.
Effect: Multiple iterations of the SEFA were received and adjustments had to be made to each version
causing a delay in finalizing our single audit procedures.
Recommendation: We recommend management implement procedures to prepare an accurate SEFA and
a second layer of review is performed before the SEFA is finalized to identify any inaccuracies or
inconsistencies with the general ledger.
Views of Responsible Officials and Planned Corrective Actions: The Foundation is strictly enforcing a policy
that AMEX receipts from staff are due three days after the statement is posted to ensure all expenditure
information is received and recorded timely for purposes of inclusion in the SEFA.
Condition: A sample of three (3) contractors were selected for testing procurement, suspension, and
debarment. Our test work indicated that there was no documentation for the verification of suspension and
debarment for all three contractors selected for testing.
Criteria: Suspension and debarment regulations under 2 CFR should be followed.
Cause: Procedures have not been established to verify if vendors contracted with the Foundation related to
the federal program in excess of $25,000 are not suspended, debarred or otherwise excluded from doing
business.
Effect: Noncompliance with the federal award program’s suspension and debarment compliance
requirements could occur and not be detected and corrected timely.
Recommendation: We recommend that the Foundation establish and document suspension and debarment
reviews for all contracts entered into using federal awards.
Views of Responsible Officials and Planned Corrective Actions: The Foundation has always had procedures
in place to research whether an organization is suspended and debarred. The Foundation has also
developed a process by which the grant administration team both looks up and takes screen shots of the
search for each vendor’s status in the database (both upon contract renewal or when entering a new contract
with a value of more than $25,000). This information is maintained by the grant administration team.
Condition: A sample of four (4) drawdowns were selected for testing cash management procedures. Our
test work found that the Foundation could not produce adequate documentation of the expenses supporting
each drawdown request and the drawdown requests did not have documented approvals. Additionally, we
found that there is no process in place to prevent entries from being recorded in the accounting ledger once
a period has been closed. In reviewing the federal drawdowns made during the year, we determined that
the Foundation rounded drawdowns to the nearest hundred dollar.
As a result of our review of the federal grants receivable general ledger, we also found that the Foundation
erroneously failed to drawdown $76,235 of federal funds related to FY23 expenditures incurred. We notified
management of this matter and the amount was subsequently drawn down.
Criteria: The Uniform Guidance requires organizations who receive funds on a cost reimbursement basis to
draw down funds based on allowable expenditures under the grant.
Cause: Overall lack of policies and procedures regarding retention of drawdown documentation and
approval of drawdowns.
Effect: Reports showing expenses for drawdowns were run real-time and were not maintained. Accounting
records are not closed at each period end, which allows for erroneous journal entries to be made. Based on
our tests performed over federal expenditures, we found no unallowable costs included in the drawdown
request. Additionally, there was an outstanding receivable at the end of FY23, which was drawn down
subsequent to year end. Recommendation: We recommend that the Foundation save all supporting schedules used to calculate
each drawdown. We also recommend that the Foundation drawdown federal funds in an amount equal to
the exact expenses incurred during the period and the drawdowns are approved. Furthermore, we
recommend that only the accounting team have ability to affect the accounting records. Lastly, we
recommend that the Foundation reconcile and review the grants receivable balance monthly to ensure all
drawdowns occur on a timely basis.
Views of Responsible Officials and Planned Corrective Actions: The Foundation is strictly enforcing a policy
that AMEX receipts from staff are due three days after the statement is posted. With this clear policy in
place, the period end is accurate with drawdowns reflecting the activity incurred in that period. All supporting
schedules are being saved.
Condition: A sample of forty (40) payroll transactions were selected for testing, spanning across five (5)
months. For one month selected, the Foundation was unable to provide key payroll reports to reconcile
payroll to the amount charged to the federal program.
Criteria: The Uniform Guidance requires organizations to establish internal controls to detect potential
noncompliance.
Cause: Overall lack of policies and procedures regarding retention of documentation. Management believes
the payroll report was overwritten by a subsequent month.
Effect: Noncompliance with the federal award program’s allowance costs compliance requirements could
occur and not be detected and corrected timely.
Recommendation: We recommend that the Foundation establish procedures to back up all pertinent payroll
reports to a secure location to prevent loss of data.
Views of Responsible Officials and Planned Corrective Actions: A previous staff member (who is no longer
with the Foundation) appears to have erroneously overwritten a payroll report. We now have a process
where each month, a payroll folder is created with the correct reports and supporting documents. Once
again, this process is in place with documentation. As part of our collation process, these will be gathered
into a procedural manual.
Condition: Our testwork over the reporting compliance requirement included a sample of annual and
quarterly financial and performance reports. We noted that the reports did not have a documented review
of the reports prior to submission.
Criteria: The Uniform Guidance requires organizations to establish internal controls to detect potential
noncompliance.
Cause: Overall lack of policies and procedures regarding retention of review documentation.
Effect: Non-compliance with adequate review over required financial and program reports.
Recommendation: We recommend that management establish procedures to document the review and
approval of the required financial and performance reports. Views of Responsible Officials and Planned Corrective Actions: The reports to the CDC are provided in
quarterly meetings. We were able to provide these reports to the Auditors and are now receiving these
reports from the program office so that they can be maintained in a file which can be used for audit purposes.
Condition: Our examination of the Foundation’s Schedule of Expenditures of Federal Awards (SEFA) found
various errors that resulted in adjustments to both direct and indirect grant revenue. We received several
iterations of the SEFA and adjustments had to be made to each version before a complete SEFA was
received that reconciled to the general ledger.
Criteria: The SEFA is used to determine the amount expended for federal grants that is reported to the
government.
Cause: There is a lack of established procedures for preparing and reviewing the SEFA.
Effect: Multiple iterations of the SEFA were received and adjustments had to be made to each version
causing a delay in finalizing our single audit procedures.
Recommendation: We recommend management implement procedures to prepare an accurate SEFA and
a second layer of review is performed before the SEFA is finalized to identify any inaccuracies or
inconsistencies with the general ledger.
Views of Responsible Officials and Planned Corrective Actions: The Foundation is strictly enforcing a policy
that AMEX receipts from staff are due three days after the statement is posted to ensure all expenditure
information is received and recorded timely for purposes of inclusion in the SEFA.
Condition: A sample of three (3) contractors were selected for testing procurement, suspension, and
debarment. Our test work indicated that there was no documentation for the verification of suspension and
debarment for all three contractors selected for testing.
Criteria: Suspension and debarment regulations under 2 CFR should be followed.
Cause: Procedures have not been established to verify if vendors contracted with the Foundation related to
the federal program in excess of $25,000 are not suspended, debarred or otherwise excluded from doing
business.
Effect: Noncompliance with the federal award program’s suspension and debarment compliance
requirements could occur and not be detected and corrected timely.
Recommendation: We recommend that the Foundation establish and document suspension and debarment
reviews for all contracts entered into using federal awards.
Views of Responsible Officials and Planned Corrective Actions: The Foundation has always had procedures
in place to research whether an organization is suspended and debarred. The Foundation has also
developed a process by which the grant administration team both looks up and takes screen shots of the
search for each vendor’s status in the database (both upon contract renewal or when entering a new contract
with a value of more than $25,000). This information is maintained by the grant administration team.
Condition: A sample of four (4) drawdowns were selected for testing cash management procedures. Our
test work found that the Foundation could not produce adequate documentation of the expenses supporting
each drawdown request and the drawdown requests did not have documented approvals. Additionally, we
found that there is no process in place to prevent entries from being recorded in the accounting ledger once
a period has been closed. In reviewing the federal drawdowns made during the year, we determined that
the Foundation rounded drawdowns to the nearest hundred dollar.
As a result of our review of the federal grants receivable general ledger, we also found that the Foundation
erroneously failed to drawdown $76,235 of federal funds related to FY23 expenditures incurred. We notified
management of this matter and the amount was subsequently drawn down.
Criteria: The Uniform Guidance requires organizations who receive funds on a cost reimbursement basis to
draw down funds based on allowable expenditures under the grant.
Cause: Overall lack of policies and procedures regarding retention of drawdown documentation and
approval of drawdowns.
Effect: Reports showing expenses for drawdowns were run real-time and were not maintained. Accounting
records are not closed at each period end, which allows for erroneous journal entries to be made. Based on
our tests performed over federal expenditures, we found no unallowable costs included in the drawdown
request. Additionally, there was an outstanding receivable at the end of FY23, which was drawn down
subsequent to year end. Recommendation: We recommend that the Foundation save all supporting schedules used to calculate
each drawdown. We also recommend that the Foundation drawdown federal funds in an amount equal to
the exact expenses incurred during the period and the drawdowns are approved. Furthermore, we
recommend that only the accounting team have ability to affect the accounting records. Lastly, we
recommend that the Foundation reconcile and review the grants receivable balance monthly to ensure all
drawdowns occur on a timely basis.
Views of Responsible Officials and Planned Corrective Actions: The Foundation is strictly enforcing a policy
that AMEX receipts from staff are due three days after the statement is posted. With this clear policy in
place, the period end is accurate with drawdowns reflecting the activity incurred in that period. All supporting
schedules are being saved.
Condition: A sample of forty (40) payroll transactions were selected for testing, spanning across five (5)
months. For one month selected, the Foundation was unable to provide key payroll reports to reconcile
payroll to the amount charged to the federal program.
Criteria: The Uniform Guidance requires organizations to establish internal controls to detect potential
noncompliance.
Cause: Overall lack of policies and procedures regarding retention of documentation. Management believes
the payroll report was overwritten by a subsequent month.
Effect: Noncompliance with the federal award program’s allowance costs compliance requirements could
occur and not be detected and corrected timely.
Recommendation: We recommend that the Foundation establish procedures to back up all pertinent payroll
reports to a secure location to prevent loss of data.
Views of Responsible Officials and Planned Corrective Actions: A previous staff member (who is no longer
with the Foundation) appears to have erroneously overwritten a payroll report. We now have a process
where each month, a payroll folder is created with the correct reports and supporting documents. Once
again, this process is in place with documentation. As part of our collation process, these will be gathered
into a procedural manual.
Condition: Our testwork over the reporting compliance requirement included a sample of annual and
quarterly financial and performance reports. We noted that the reports did not have a documented review
of the reports prior to submission.
Criteria: The Uniform Guidance requires organizations to establish internal controls to detect potential
noncompliance.
Cause: Overall lack of policies and procedures regarding retention of review documentation.
Effect: Non-compliance with adequate review over required financial and program reports.
Recommendation: We recommend that management establish procedures to document the review and
approval of the required financial and performance reports. Views of Responsible Officials and Planned Corrective Actions: The reports to the CDC are provided in
quarterly meetings. We were able to provide these reports to the Auditors and are now receiving these
reports from the program office so that they can be maintained in a file which can be used for audit purposes.