Audit 308440

FY End

2022-12-31

Total Expended

$1.26M

Findings

4

Programs

1

Organization: Appalachian Headwaters INC (WV)

Year: 2022 Accepted: 2024-06-10

Auditor: Brown Edwards & Company LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
400391	2022-003	Significant Deficiency	-	B
400392	2022-004	-	-	P
976833	2022-003	Significant Deficiency	-	B
976834	2022-004	-	-	P

ALN	Program	Spent	Major	Findings
10.001	Agricultural Research_basic and Applied Research	$1.26M	Yes	2

Contacts

Name	Title	Type
F164J1XK3FN4	Joseph Lovett	Auditee
3046459008	Valerie Ellis	Auditor
No contacts on file

Notes to SEFA

Title: Note 1: Basis of Presentation Accounting Policies: Note 1: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Appalachian Headwaters, Inc. (the Organization), under programs of the federal government for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of 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 select 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. Note 2: Expenditures reported on the Schedule are reported on the 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: N Rate Explanation: The Organization has not elected to use the 10% de minimis indirect cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Appalachian Headwaters, Inc. (the Organization), under programs of the federal government for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of 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 select 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 2: Summary of Significant Accounting Policies Accounting Policies: Note 1: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Appalachian Headwaters, Inc. (the Organization), under programs of the federal government for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of 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 select 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. Note 2: Expenditures reported on the Schedule are reported on the 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: N Rate Explanation: The Organization has not elected to use the 10% de minimis indirect cost rate. Expenditures reported on the Schedule are reported on the 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 3: Indirect Cost Rate Accounting Policies: Note 1: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Appalachian Headwaters, Inc. (the Organization), under programs of the federal government for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of 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 select 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. Note 2: Expenditures reported on the Schedule are reported on the 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: N Rate Explanation: The Organization has not elected to use the 10% de minimis indirect cost rate. the Organization has not elected to use the 10% de minims indirect cost rate.

Finding Details

Finding 2022-003

Condition: The Organization did not obtain detailed receipts to support certain employee reimbursements. Criteria: Controls are not in place to ensure all reimbursements are properly supported and classified. Cause: We noted that the Organization self-constructed several assets during the year which included construction supplies purchased directly by the Organization’s employees from a local vendor using personal funds. Documentation was then submitted to the Organization for reimbursement. We noted certain instances where the employee reimbursement requests were supported by monthly statements of account rather than itemized invoices. Effect: Amounts may be reimbursed without proper supporting documentation and items purchased may not benefit the Organization. Recommendation: We recommend the Organization request and receive detailed invoices for all employee reimbursements which include amounts, descriptions of items purchased, and delivery locations, if applicable. We also recommend the Organization pay vendors directly when a significant project is undertaken. Views of Responsible Officials and Planned Corrective Action: Corrective action has already been taken. Appalachian Headwaters requests and receives detailed invoices for all employee reimbursements which include amounts, descriptions of items purchased, and delivery locations, when possible. Appalachian Headwaters pays vendors directly whenever possible. Context: Of 25 expenses selected for testing, a reimbursement to the employee of $18,752 was determined to be a duplicate payment for an earlier reimbursement. One of the payments was supported by a summarized statement of account from the vendor, and further analysis of the vendor’s statements indicate that the duplicate payment was not credited to the Organization’s account. Questioned Costs: N/A - Below reporting threshold.

Finding 2022-004

Condition: The Organization did not submit the Single Audit Reporting Package to the Federal Audit Clearinghouse prior to the September 30, 2023 deadline. Criteria: Based on requirements set forth by 2 CFR section 200.512(a), the Organization is required to submit the Single Audit Reporting Package to the Federal Audit Clearinghouse by the earlier of thirty calendar days after receipt of the auditor's reports or nine months after the end of the audit period. Cause: The Organization’s audit was not completed and submitted to the Federal Audit Clearinghouse prior to the deadline for the year ended December 31, 2022. Effect: The Organization was not in compliance with the requirements of 2 CFR section 200.512(a) regarding the timely submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse. The effect will not allow the Organization to be considered a low risk auditee for their next two annual Single Audits. Views of Responsible Officials and Planned Corrective Action: Appalachian Headwaters aims to submit future Single Audits to the Federal Audit Clearinghouse prior to the required deadline to ensure all compliance requirements are met.

Finding 2022-003

Condition: The Organization did not obtain detailed receipts to support certain employee reimbursements. Criteria: Controls are not in place to ensure all reimbursements are properly supported and classified. Cause: We noted that the Organization self-constructed several assets during the year which included construction supplies purchased directly by the Organization’s employees from a local vendor using personal funds. Documentation was then submitted to the Organization for reimbursement. We noted certain instances where the employee reimbursement requests were supported by monthly statements of account rather than itemized invoices. Effect: Amounts may be reimbursed without proper supporting documentation and items purchased may not benefit the Organization. Recommendation: We recommend the Organization request and receive detailed invoices for all employee reimbursements which include amounts, descriptions of items purchased, and delivery locations, if applicable. We also recommend the Organization pay vendors directly when a significant project is undertaken. Views of Responsible Officials and Planned Corrective Action: Corrective action has already been taken. Appalachian Headwaters requests and receives detailed invoices for all employee reimbursements which include amounts, descriptions of items purchased, and delivery locations, when possible. Appalachian Headwaters pays vendors directly whenever possible. Context: Of 25 expenses selected for testing, a reimbursement to the employee of $18,752 was determined to be a duplicate payment for an earlier reimbursement. One of the payments was supported by a summarized statement of account from the vendor, and further analysis of the vendor’s statements indicate that the duplicate payment was not credited to the Organization’s account. Questioned Costs: N/A - Below reporting threshold.

Finding 2022-004

Condition: The Organization did not submit the Single Audit Reporting Package to the Federal Audit Clearinghouse prior to the September 30, 2023 deadline. Criteria: Based on requirements set forth by 2 CFR section 200.512(a), the Organization is required to submit the Single Audit Reporting Package to the Federal Audit Clearinghouse by the earlier of thirty calendar days after receipt of the auditor's reports or nine months after the end of the audit period. Cause: The Organization’s audit was not completed and submitted to the Federal Audit Clearinghouse prior to the deadline for the year ended December 31, 2022. Effect: The Organization was not in compliance with the requirements of 2 CFR section 200.512(a) regarding the timely submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse. The effect will not allow the Organization to be considered a low risk auditee for their next two annual Single Audits. Views of Responsible Officials and Planned Corrective Action: Appalachian Headwaters aims to submit future Single Audits to the Federal Audit Clearinghouse prior to the required deadline to ensure all compliance requirements are met.