Audit 30644

Criteria: 2 CFR section 200.302 stipulates that the financial management system of the nonfederal entity must provide for written procedures for determining the allowability of costs in accordance with subpart E (cost principles) and the terms and conditions of the Federal award. Condition: UCAP has no written procedures for determining the allowability of costs in accordance with subpart E (cost principles) and the terms and conditions of the Federal award. Context: This is a condition identified based on review of Uniform Guidance requirements. Questioned Cost: $ 0 The known and likely questioned costs are less than the reportable threshold. Cause: No written procedures were established, therefore the procedures for determining the allowability of costs were not performed consistently. Effect: We noted instances where unallowable costs were charged to the federal grant. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: We suggest that the procedures for determining the allowability of costs in accordance with cost principles be written so that the compliance requirement as explained in 2 CFR Section 200 Subpart D section 200.302 can be satisfied, and we suggest that such procedures to be followed consistently. Views of Responsible Officials and Planned Corrective Action Plan: UCAP agrees with the finding. Planned Corrective Action: UCAP has set up written procedures and descriptions of costs which was submitted to all executive and program staff to be used prior to submission of program expenditures. This was provided to program managers in order to ensure that the cost allocations are followed according to procedures. We have also implemented an internal policy in our financial reporting department to ensure that unallowable costs are not charged to expenditures in error through a thorough two-party review of all expenditures charged to grants. With the several layers of review, it will ensure that no unallowable costs are charged to federal grants. Responsible Official: Maryland Hutchinson, Fiscal Manager. Anticipated Completion Date: This was completed as of 3/31/2023.

Criteria: 2 CFR section 200.512 requires that an non-federal entity?s single audit and data collection form must be submitted within the earlier of thirty days after the receipt of the auditor?s report or nine months after the end of the audit period. Condition: UCAP?s audited financial statements for the June 30, 2022 year-end were not submitted to the Federal Audit Clearing House within the stipulated nine months after year-end. Context: This is a condition identified based on review of Uniform Guidance requirements. Questioned Cost: $ 0 Cause: During FY2022, the pass-through entity agreed to allow UCAP to capture more costs under CSBG Cares supplemental funds, which resulted in heavy workload in reconciliations and consequently the report being submitted late. Effect: The program is not in compliance with reporting compliance of the Office of Management and Budget for non-profit, state and local government entities. Identification of a Repeat Finding: This is not a repeat finding in the immediately prior audit. Recommendation: We recommend that UCAP works to have reconciliations completed on a timely basis and have its audits completed timely in the upcoming year to comply with federal guidelines. Views of Responsible Officials and Planned Corrective Action Plan: During the year ended 6/30/22, UCAP received additional funding due to the Cares Act. As such, the organization had an obligation to spend all funds by 9/30/22. Each of the funding sources had different sunset dates. In an effort to recapture costs, the organization went back to March 2020, the date the grant first was granted in order to recapture costs that were not previously captured under the CARES program. The Fiscal Manager?s start date was August 2020, seven months after the grant was implemented. This was an effort to use all excess Cares funding. This affected the expenditures for the year, the amounts due from grantors and the deferred revenue accounts. In turn, this affected the timely closing of the books. Planned Corrective Action: UCAP has implemented measures to ensure that there is no delay in financial reporting in the future. Responsible Official: Maryland Hutchinson, Fiscal Manager. Anticipated Completion Date: This will be complete by 6/30/2023 and will be reflected in the upcoming year-end

Criteria: 2 CFR section 200.302 stipulates that the financial management system of the nonfederal entity must provide for written procedures for determining the allowability of costs in accordance with subpart E (cost principles) and the terms and conditions of the Federal award. Condition: UCAP has no written procedures for determining the allowability of costs in accordance with subpart E (cost principles) and the terms and conditions of the Federal award. Context: This is a condition identified based on review of Uniform Guidance requirements. Questioned Cost: $ 0 The known and likely questioned costs are less than the reportable threshold. Cause: No written procedures were established, therefore the procedures for determining the allowability of costs were not performed consistently. Effect: We noted instances where unallowable costs were charged to the federal grant. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: We suggest that the procedures for determining the allowability of costs in accordance with cost principles be written so that the compliance requirement as explained in 2 CFR Section 200 Subpart D section 200.302 can be satisfied, and we suggest that such procedures to be followed consistently. Views of Responsible Officials and Planned Corrective Action Plan: UCAP agrees with the finding. Planned Corrective Action: UCAP has set up written procedures and descriptions of costs which was submitted to all executive and program staff to be used prior to submission of program expenditures. This was provided to program managers in order to ensure that the cost allocations are followed according to procedures. We have also implemented an internal policy in our financial reporting department to ensure that unallowable costs are not charged to expenditures in error through a thorough two-party review of all expenditures charged to grants. With the several layers of review, it will ensure that no unallowable costs are charged to federal grants. Responsible Official: Maryland Hutchinson, Fiscal Manager. Anticipated Completion Date: This was completed as of 3/31/2023.

Criteria: 2 CFR section 200.512 requires that an non-federal entity?s single audit and data collection form must be submitted within the earlier of thirty days after the receipt of the auditor?s report or nine months after the end of the audit period. Condition: UCAP?s audited financial statements for the June 30, 2022 year-end were not submitted to the Federal Audit Clearing House within the stipulated nine months after year-end. Context: This is a condition identified based on review of Uniform Guidance requirements. Questioned Cost: $ 0 Cause: During FY2022, the pass-through entity agreed to allow UCAP to capture more costs under CSBG Cares supplemental funds, which resulted in heavy workload in reconciliations and consequently the report being submitted late. Effect: The program is not in compliance with reporting compliance of the Office of Management and Budget for non-profit, state and local government entities. Identification of a Repeat Finding: This is not a repeat finding in the immediately prior audit. Recommendation: We recommend that UCAP works to have reconciliations completed on a timely basis and have its audits completed timely in the upcoming year to comply with federal guidelines. Views of Responsible Officials and Planned Corrective Action Plan: During the year ended 6/30/22, UCAP received additional funding due to the Cares Act. As such, the organization had an obligation to spend all funds by 9/30/22. Each of the funding sources had different sunset dates. In an effort to recapture costs, the organization went back to March 2020, the date the grant first was granted in order to recapture costs that were not previously captured under the CARES program. The Fiscal Manager?s start date was August 2020, seven months after the grant was implemented. This was an effort to use all excess Cares funding. This affected the expenditures for the year, the amounts due from grantors and the deferred revenue accounts. In turn, this affected the timely closing of the books. Planned Corrective Action: UCAP has implemented measures to ensure that there is no delay in financial reporting in the future. Responsible Official: Maryland Hutchinson, Fiscal Manager. Anticipated Completion Date: This will be complete by 6/30/2023 and will be reflected in the upcoming year-end