FAC Explorer

Audit 299725

FY End
2023-06-30
Total Expended
$3.42M
Findings
6
Programs
6
Organization: The Network: Advocating Against Domestic Violence (IL)
Year: 2023 Accepted: 2024-03-28
Auditor: Ringold Financial Management Services INC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
387656 2023-001 Material Weakness Yes P
387657 2023-001 Material Weakness Yes P
387658 2023-002 - Yes L
964098 2023-001 Material Weakness Yes P
964099 2023-001 Material Weakness Yes P
964100 2023-002 - Yes L

Programs

ALN Program Spent Major Findings
16.034 Coronavirus Emergency Supplemental Funding Program $1.33M Yes 2
21.027 Coronavirus State and Local Fiscal Recovery Funds $887,646 Yes 0
97.024 Emergency Food and Shelter National Board Program $697,162 - 1
16.575 Crime Victim Assistance $420,684 - 0
14.267 Continuum of Care Program $29,980 - 0
14.218 Community Development Block Grants/entitlement Grants $24,245 - 0

Contacts

Name Title Type
DZ9KA5GMT9A6 Leah Hungerford Auditee
6176972978 Lily Bartkoske Auditor
No contacts on file

Notes to SEFA

Title: Note A - Basis of Presentation Accounting Policies: Expenditures reported in the Schedule are reported on an accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance The accompanying Schedule of Expenditures of Federal Awards (“the Schedule”) includes the federal grant activity of The Network: Advocating Against Domestic Violence (the Organization) under programs of the federal government for the year ended June 30, 2023. The information in this schedule is presented in accordance with requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.
Title: Note B - Summary of Significant Accouting Policies Accounting Policies: Expenditures reported in the Schedule are reported on an accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance Expenditures reported in the Schedule are reported on an accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: Note C - Subrecipients Accounting Policies: Expenditures reported in the Schedule are reported on an accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance Awards passed through to subrecipients totaled $1,194,446 for the year ended June 30, 2023
Title: Note D - Indirect Cost Rate Accounting Policies: Expenditures reported in the Schedule are reported on an accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance
Title: Note E - Other Accounting Policies: Expenditures reported in the Schedule are reported on an accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance The Organization did not have any outstanding federal loans or loan guarantees outstanding as of June 30, 2023. The Organization did not receive any federal noncash awards or insurance assistance for reimbursement losses during the year ended June 30, 2023.

Finding Details

Finding 2023-001
Criteria In order to ensure that financial statements are properly stated, it is necessary that revenue be recognized as prescribed by applicable revenue recognition accounting standards. Condition During our audit, we noted that contribution revenue and net assets with donor restrictions were misstated by a material amount. We also noted cost-reimbursement grants for which government contract revenue and deferred revenue were also misstated by a material amount. In both cases, the applicable revenue recognition standards were not adhered to. Context There were several contributions where revenue was not properly recognized and net assets with donor restrictions were not properly identified, tracked, and released. Government contract revenue was misstated for two federal programs and deferred revenue was misstated for one of these programs. During the audit, we assisted management in preparing the adjustments necessary to correct these issues for the period under audit. This finding is a repeat of finding 2022-001. Effect Management may not be able to detect material errors and omissions in its financial reports. As a result, inaccurate financial data may be shared with outside users. Cause The misstatement of donor-restricted contributions was caused by an accounting process in which unconditional contribution revenue with donor restrictions was not recognized when awarded, but rather, when donor restrictions were released or when payments are received, thus causing a timing delay in the recognition of revenue. The misstatement of the cost-reimbursement grant was due to an oversight in which an adjusting journal entry was not recorded to report unspent federal advances as deferred revenue. Recommendation We recommend that all unconditional contributions be recognized as revenue as of the earlier of receipt or notification of the contribution. Conditional contributions should be recorded in the period in which substantially all conditions have been met. We also recommend that net assets with donor restrictions be properly tracked and released as restrictions are met. Releases from restriction should be recorded as a reclassification between net asset accounts with no effect on revenue. Lastly, we recommend that cost reimbursement grants, regardless of funding source, be reconciled at year-end so that receivables, deferred revenue, and revenue can be adjusted as needed to ensure that the accounts are properly stated. Management Response Management concurs with this finding. See corrective action plan.
Finding 2023-001
Criteria In order to ensure that financial statements are properly stated, it is necessary that revenue be recognized as prescribed by applicable revenue recognition accounting standards. Condition During our audit, we noted that contribution revenue and net assets with donor restrictions were misstated by a material amount. We also noted cost-reimbursement grants for which government contract revenue and deferred revenue were also misstated by a material amount. In both cases, the applicable revenue recognition standards were not adhered to. Context There were several contributions where revenue was not properly recognized and net assets with donor restrictions were not properly identified, tracked, and released. Government contract revenue was misstated for two federal programs and deferred revenue was misstated for one of these programs. During the audit, we assisted management in preparing the adjustments necessary to correct these issues for the period under audit. This finding is a repeat of finding 2022-001. Effect Management may not be able to detect material errors and omissions in its financial reports. As a result, inaccurate financial data may be shared with outside users. Cause The misstatement of donor-restricted contributions was caused by an accounting process in which unconditional contribution revenue with donor restrictions was not recognized when awarded, but rather, when donor restrictions were released or when payments are received, thus causing a timing delay in the recognition of revenue. The misstatement of the cost-reimbursement grant was due to an oversight in which an adjusting journal entry was not recorded to report unspent federal advances as deferred revenue. Recommendation We recommend that all unconditional contributions be recognized as revenue as of the earlier of receipt or notification of the contribution. Conditional contributions should be recorded in the period in which substantially all conditions have been met. We also recommend that net assets with donor restrictions be properly tracked and released as restrictions are met. Releases from restriction should be recorded as a reclassification between net asset accounts with no effect on revenue. Lastly, we recommend that cost reimbursement grants, regardless of funding source, be reconciled at year-end so that receivables, deferred revenue, and revenue can be adjusted as needed to ensure that the accounts are properly stated. Management Response Management concurs with this finding. See corrective action plan.
Finding 2023-002
Finding 2023-002 – Noncompliance with Federal and State Reporting Requirements This finding is: New X Repeat from Prior Year Year originally reported? 2022 Federal Program Name: Coronavirus Emergency Supplemental Funding Program Project Numbers: 546-000-2413/820010 Assistance Listing Number: 16.034 Passed Through: Illinois Criminal Justice Information Authority Federal Agency: U.S. Department of Justice Criteria Reporting - 2 CFR Part 200 requires grantees to submit the Single Audit reporting package to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after receiving the audit report or nine months after the fiscal year end. Additionally, the Organization has grant agreements from State of Illinois agencies with terms requiring compliance with the State of Illinois Grant Accountability and Transparency Act (GATA). The Organization is also required to submit the same Single Audit reporting package plus a Consolidated Year-End Financial Report (CYEFR) to the GATA portal within nine months after the fiscal year-end. Condition During our testing, we noted that the Single Audit and GATA reporting packages were not submitted within the required timeframe for fiscal year 2022. Questioned Costs None Context The complete reporting packages were submitted to the FAC and GATA portals in July 2023. This was more than nine months after the fiscal year end. Effect The Organization was not in compliance with 2 CFR Part 200 and was classified as a high-risk auditee for fiscal year 2023. Cause This Organization underwent a change of accountants from fiscal year 2021 to fiscal year 2022 and subsequent change of accountants after fiscal year 2022. As such, there was a delay in completing the recording of year-end financial transactions, performing account reconciliations, and preparing financial reports for fiscal year 2022 as needed for the audit.Recommendation We recommend that current accounting personnel establish a schedule for completing the recording of all financial transactions, preparation of account reconciliations, and financial reports, including a CYEFR and SEFA (if applicable). This should be done in a timely manner to allow for a review by management and the board of directors. We further recommend that these procedures be included in an updated set of financial policies and procedures that are reviewed and approved by the board of directors. Management Response Management concurs with this finding. See corrective action plan.
Finding 2023-001
Criteria In order to ensure that financial statements are properly stated, it is necessary that revenue be recognized as prescribed by applicable revenue recognition accounting standards. Condition During our audit, we noted that contribution revenue and net assets with donor restrictions were misstated by a material amount. We also noted cost-reimbursement grants for which government contract revenue and deferred revenue were also misstated by a material amount. In both cases, the applicable revenue recognition standards were not adhered to. Context There were several contributions where revenue was not properly recognized and net assets with donor restrictions were not properly identified, tracked, and released. Government contract revenue was misstated for two federal programs and deferred revenue was misstated for one of these programs. During the audit, we assisted management in preparing the adjustments necessary to correct these issues for the period under audit. This finding is a repeat of finding 2022-001. Effect Management may not be able to detect material errors and omissions in its financial reports. As a result, inaccurate financial data may be shared with outside users. Cause The misstatement of donor-restricted contributions was caused by an accounting process in which unconditional contribution revenue with donor restrictions was not recognized when awarded, but rather, when donor restrictions were released or when payments are received, thus causing a timing delay in the recognition of revenue. The misstatement of the cost-reimbursement grant was due to an oversight in which an adjusting journal entry was not recorded to report unspent federal advances as deferred revenue. Recommendation We recommend that all unconditional contributions be recognized as revenue as of the earlier of receipt or notification of the contribution. Conditional contributions should be recorded in the period in which substantially all conditions have been met. We also recommend that net assets with donor restrictions be properly tracked and released as restrictions are met. Releases from restriction should be recorded as a reclassification between net asset accounts with no effect on revenue. Lastly, we recommend that cost reimbursement grants, regardless of funding source, be reconciled at year-end so that receivables, deferred revenue, and revenue can be adjusted as needed to ensure that the accounts are properly stated. Management Response Management concurs with this finding. See corrective action plan.
Finding 2023-001
Criteria In order to ensure that financial statements are properly stated, it is necessary that revenue be recognized as prescribed by applicable revenue recognition accounting standards. Condition During our audit, we noted that contribution revenue and net assets with donor restrictions were misstated by a material amount. We also noted cost-reimbursement grants for which government contract revenue and deferred revenue were also misstated by a material amount. In both cases, the applicable revenue recognition standards were not adhered to. Context There were several contributions where revenue was not properly recognized and net assets with donor restrictions were not properly identified, tracked, and released. Government contract revenue was misstated for two federal programs and deferred revenue was misstated for one of these programs. During the audit, we assisted management in preparing the adjustments necessary to correct these issues for the period under audit. This finding is a repeat of finding 2022-001. Effect Management may not be able to detect material errors and omissions in its financial reports. As a result, inaccurate financial data may be shared with outside users. Cause The misstatement of donor-restricted contributions was caused by an accounting process in which unconditional contribution revenue with donor restrictions was not recognized when awarded, but rather, when donor restrictions were released or when payments are received, thus causing a timing delay in the recognition of revenue. The misstatement of the cost-reimbursement grant was due to an oversight in which an adjusting journal entry was not recorded to report unspent federal advances as deferred revenue. Recommendation We recommend that all unconditional contributions be recognized as revenue as of the earlier of receipt or notification of the contribution. Conditional contributions should be recorded in the period in which substantially all conditions have been met. We also recommend that net assets with donor restrictions be properly tracked and released as restrictions are met. Releases from restriction should be recorded as a reclassification between net asset accounts with no effect on revenue. Lastly, we recommend that cost reimbursement grants, regardless of funding source, be reconciled at year-end so that receivables, deferred revenue, and revenue can be adjusted as needed to ensure that the accounts are properly stated. Management Response Management concurs with this finding. See corrective action plan.
Finding 2023-002
Finding 2023-002 – Noncompliance with Federal and State Reporting Requirements This finding is: New X Repeat from Prior Year Year originally reported? 2022 Federal Program Name: Coronavirus Emergency Supplemental Funding Program Project Numbers: 546-000-2413/820010 Assistance Listing Number: 16.034 Passed Through: Illinois Criminal Justice Information Authority Federal Agency: U.S. Department of Justice Criteria Reporting - 2 CFR Part 200 requires grantees to submit the Single Audit reporting package to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after receiving the audit report or nine months after the fiscal year end. Additionally, the Organization has grant agreements from State of Illinois agencies with terms requiring compliance with the State of Illinois Grant Accountability and Transparency Act (GATA). The Organization is also required to submit the same Single Audit reporting package plus a Consolidated Year-End Financial Report (CYEFR) to the GATA portal within nine months after the fiscal year-end. Condition During our testing, we noted that the Single Audit and GATA reporting packages were not submitted within the required timeframe for fiscal year 2022. Questioned Costs None Context The complete reporting packages were submitted to the FAC and GATA portals in July 2023. This was more than nine months after the fiscal year end. Effect The Organization was not in compliance with 2 CFR Part 200 and was classified as a high-risk auditee for fiscal year 2023. Cause This Organization underwent a change of accountants from fiscal year 2021 to fiscal year 2022 and subsequent change of accountants after fiscal year 2022. As such, there was a delay in completing the recording of year-end financial transactions, performing account reconciliations, and preparing financial reports for fiscal year 2022 as needed for the audit.Recommendation We recommend that current accounting personnel establish a schedule for completing the recording of all financial transactions, preparation of account reconciliations, and financial reports, including a CYEFR and SEFA (if applicable). This should be done in a timely manner to allow for a review by management and the board of directors. We further recommend that these procedures be included in an updated set of financial policies and procedures that are reviewed and approved by the board of directors. Management Response Management concurs with this finding. See corrective action plan.