Audit 308146

Finding: 2023-004 Significant Deficiency: Inadequate Internal Control over the Schedule of Expenditures of Federal Awards (SEFA) Criteria: Management and those charged with governance are responsible for the design, implementation, and maintenance of internal control relevant to the accuracy and completeness of federal expenditures and present schedule of expenditures of federal expenditures as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Condition: During our audit, we noticed that the Organization’s federal expenditures were not correctly allocated. We identified instances where: a) several direct program expenditures were not allocated to the federal program in the month they were incurred, b) September 2023 indirect costs were not included for one program, and c) reimbursable federal awards were not recorded as conditions were met. These misstatements resulted in a significant understatement of expenditures reported in the SEFA. Cause: Inadequate internal control procedures fail to ensure the accurate and timely allocation of federal expenditures to the appropriate programs. Insufficient training or awareness of federal award regulations and compliance requirements results in the misapplication of allocation rules. Ineffective oversight of SEFA preparation processes allows misstatements in expense allocation to go undetected until identified during the audit process. Effect: Multiple revisions to the client-prepared SEFA and numerous adjustments were required to correct misstatements in revenue resulting from the discrepancies in the client-prepared SEFA. Recommendation: We recommend management to a) strengthen the design and implementation of internal control procedures to ensure accurate and timely allocation of federal expenditures, b) provide comprehensive training to staff involved in SEFA preparation to improve awareness and understanding of federal award regulations and compliance requirements, and c) implement effective monitoring and oversight procedures to regularly review SEFA preparation process and identify and correct errors or discrepancies promptly. Views of responsible officials and planned corrective actions: Management agrees with this finding. Please refer to the corrective action plan on page 35.

Finding: 2023-005 Department: United States Department of Health and Human Services Program Name: Assistance for Torture Victims Federal Assistance Listing Number: 93.604 Significant Deficiency: Inadequate Internal Control over Allowable Costs Criteria: Management and those charged with governance are responsible for the design, implementation, and maintenance of internal control to accurately report allowable cost and maintain adequate documentations for transparency and accountability. Condition: During our testing of allowable costs, we found eight deviations, including: a) four deviations due to incorrect allocation of personnel and related expenses, b) one deviation involving unallowable costs, where the audit fee for the audit of the financial statements ended September 30, 2022, was charged to the program, c) one deviation due to expenses incurred outside the performance period charged to the program, d) two deviations due to miscalculations, and e) four of the eight deviations do not have calculations kept in the file to support the allocation. Cause: Inadequate internal control procedures lead to errors in allocation and classification of expenses. Insufficient training or awareness of federal award regulations and compliance requirements results in misapplication of allocation rules, charging the expense outside the performance period or misclassifying cost as allowable. Ineffective oversight processes allow misstatements in expenses allocation to go undetected until identified during the audit process. Effect: Incorrect amount of expenses was charged to the program. Questioned Costs: Total questioned costs were $6,869, consisting of a) $2,830 due to incorrect allocation of personnel and related expenses, b) $4,000 unallowable costs, c) $26 were incurred outside the performance period charged to the program, and d) $13 were due to miscalculations. Recommendation: We recommend management to a) strengthen the design and implementation of internal control procedures to ensure accurate allocation and classification of expenses, b) provide comprehensive training to staff involved in the expense allocation process to improve awareness and understanding of federal award regulations and compliance requirements, and c) implement effective oversight processes to monitor expense allocation and promptly detect and correct misstatements. Views of responsible officials and planned corrective actions: Management agrees with this finding. Please refer to the corrective action plan on page 36.

Finding: 2023-004 Significant Deficiency: Inadequate Internal Control over the Schedule of Expenditures of Federal Awards (SEFA) Criteria: Management and those charged with governance are responsible for the design, implementation, and maintenance of internal control relevant to the accuracy and completeness of federal expenditures and present schedule of expenditures of federal expenditures as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Condition: During our audit, we noticed that the Organization’s federal expenditures were not correctly allocated. We identified instances where: a) several direct program expenditures were not allocated to the federal program in the month they were incurred, b) September 2023 indirect costs were not included for one program, and c) reimbursable federal awards were not recorded as conditions were met. These misstatements resulted in a significant understatement of expenditures reported in the SEFA. Cause: Inadequate internal control procedures fail to ensure the accurate and timely allocation of federal expenditures to the appropriate programs. Insufficient training or awareness of federal award regulations and compliance requirements results in the misapplication of allocation rules. Ineffective oversight of SEFA preparation processes allows misstatements in expense allocation to go undetected until identified during the audit process. Effect: Multiple revisions to the client-prepared SEFA and numerous adjustments were required to correct misstatements in revenue resulting from the discrepancies in the client-prepared SEFA. Recommendation: We recommend management to a) strengthen the design and implementation of internal control procedures to ensure accurate and timely allocation of federal expenditures, b) provide comprehensive training to staff involved in SEFA preparation to improve awareness and understanding of federal award regulations and compliance requirements, and c) implement effective monitoring and oversight procedures to regularly review SEFA preparation process and identify and correct errors or discrepancies promptly. Views of responsible officials and planned corrective actions: Management agrees with this finding. Please refer to the corrective action plan on page 35.

Finding: 2023-005 Department: United States Department of Health and Human Services Program Name: Assistance for Torture Victims Federal Assistance Listing Number: 93.604 Significant Deficiency: Inadequate Internal Control over Allowable Costs Criteria: Management and those charged with governance are responsible for the design, implementation, and maintenance of internal control to accurately report allowable cost and maintain adequate documentations for transparency and accountability. Condition: During our testing of allowable costs, we found eight deviations, including: a) four deviations due to incorrect allocation of personnel and related expenses, b) one deviation involving unallowable costs, where the audit fee for the audit of the financial statements ended September 30, 2022, was charged to the program, c) one deviation due to expenses incurred outside the performance period charged to the program, d) two deviations due to miscalculations, and e) four of the eight deviations do not have calculations kept in the file to support the allocation. Cause: Inadequate internal control procedures lead to errors in allocation and classification of expenses. Insufficient training or awareness of federal award regulations and compliance requirements results in misapplication of allocation rules, charging the expense outside the performance period or misclassifying cost as allowable. Ineffective oversight processes allow misstatements in expenses allocation to go undetected until identified during the audit process. Effect: Incorrect amount of expenses was charged to the program. Questioned Costs: Total questioned costs were $6,869, consisting of a) $2,830 due to incorrect allocation of personnel and related expenses, b) $4,000 unallowable costs, c) $26 were incurred outside the performance period charged to the program, and d) $13 were due to miscalculations. Recommendation: We recommend management to a) strengthen the design and implementation of internal control procedures to ensure accurate allocation and classification of expenses, b) provide comprehensive training to staff involved in the expense allocation process to improve awareness and understanding of federal award regulations and compliance requirements, and c) implement effective oversight processes to monitor expense allocation and promptly detect and correct misstatements. Views of responsible officials and planned corrective actions: Management agrees with this finding. Please refer to the corrective action plan on page 36.