Finding 2023-001 Not Meeting Audit Deadline
Criteria: The Association is required to submit audited financial statements to the grantor agencies and the Federal Clearing House by the annual deadline, as subject to the audit requirements under the Uniform Guidance and Government Auditing Standards. The Association should have an internal control process in place to ensure the timely submission of its annual audited financial statements to the appropriate parties.
Condition: The Association failed to submit the fiscal year 2022-2023 audited financial statements package to the appropriate parties by the required deadline of March 31, 2024.
Questioned Cost: None.
Cause: During the pandemic, management made numerous efforts to contact various accounting and auditing firms including the prior auditing firm. The Association was not able to obtain a qualified auditing firm. Additionally, the Association’s controller retired in December 2020 due to illness. The Association continued to experience staff turnover in the following years, resulting in further delays in the process.
Effect: The delay in completing the required audit resulted in the Association being unable to qualify as a low-risk auditee and could also cause future funding delays.
Recommendation: We recommend that management submit the audited financial statements to the appropriate parties as soon as possible. We also recommend that the Association continue to obtain the necessary temporary support while searching to recruit new staff members. Management may also consider training seasoned staff members for important roles at the Association to provide backup support.
Views of Responsible Officials: The Association’s management acknowledges the finding and has obtained and completed the required audit for the fiscal year 2022-2023. Management will submit the final audited financial statements to the appropriate parties as soon as feasible.
Finding 2023-002 Earmarking percentage requirement not met for DOL Senior Community Service Employment program
Criteria: Per 2 CFR Part 200, Appendix XI, Compliance Supplement May 2023, DOL Senior Community Service Employment, 3. Earmarking:
The amount of federal funds expended for enrollee wages and fringe benefits shall be no less than 75 percent of the grant (20 CFR section 641.873) except in those instances in which a grantee has requested, and DOL has approved such request, to use no less than 65 percent of the grant funds to pay for participant wage and fringe benefits so as to use up to an additional 10 percent of grant funds for participant training and supportive services (42 USC 3056(c)(6)(C)(i)).
Condition: The amount of federal funds expended for enrollee wages and fringe benefits for the DOL Senior Community Service Employment program for fiscal year 2022-2023 was $7,011,612, or 74.8 percent of the grant expenditures of $9,378,107, which is $21,968 less than the required 75 percent. The Association has discussed the issue with DOL and is waiting to hear back from them.
Questioned Cost: $21,968.
Cause: The COVID-19 pandemic had a continuing impact on the senior community, and enrollees’ participation is less than anticipated due to continued concerns about the impact of COVID-19 on seniors. However, certain administrative and fixed costs could not be decreased at the same pace. As a result, the Association missed the required percentage slightly.
Effect: Not meeting the required percentage could lead to return of portion of the funds unless a waiver is obtained.
Recommendation: We recommend that management follow up with DOL to obtain a final decision. We also recommend that management train more staff to help monitor the expenditures requirements timely to mitigate similar issues.
Views of Responsible Officials: The Association’s management acknowledges the finding and is well aware of this issue. Management has discussed with DOL and requested relief from paying back the funds in question. The Association has also trained additional staff members to monitor more closely to ensure the percentage requirements are met on a monthly basis.
Finding 2023-003 Expenditures overclaimed for DOL grant AD-38314-22-60-A-6
Criteria: Per 2 CFR Part 200, Appendix XI, Compliance Supplement May 2023, Part 3, cost principles for nonprofit organizations:
Costs were necessary and reasonable for the performance of the federal award and allocable under the principles of 2CFR 200. Subpart E.
Condition: Per the Association’s expenditures details, grant expenditures for FY22-23 for the DOL grant number AD-38314-22-60-A-6 were $9,378,107. Total payment requests and cash receipts for the grant were $9,399,510. The Association received $21,403 more than expenditures incurred for this grant.
Questioned Cost: $21,403.
Cause: The first payment draw request for the new FY23-24 DOL program expenditures was inadvertently drawn from the DOL FY22-23 account because the new FY23-24 grant account was not available yet for funding withdrawal at that time.
Effect: This will result in funds that should either be returned to the DOL or credited to future DOL programs.
Recommendation: We recommend that management return or credit the funds back to the DOL program.
Views of Responsible Officials: The Association’s management acknowledges the finding and will seek ways to return or credit the funds back to the DOL or DOL programs in FY23-24.
Finding 2023-001 Not Meeting Audit Deadline
Criteria: The Association is required to submit audited financial statements to the grantor agencies and the Federal Clearing House by the annual deadline, as subject to the audit requirements under the Uniform Guidance and Government Auditing Standards. The Association should have an internal control process in place to ensure the timely submission of its annual audited financial statements to the appropriate parties.
Condition: The Association failed to submit the fiscal year 2022-2023 audited financial statements package to the appropriate parties by the required deadline of March 31, 2024.
Questioned Cost: None.
Cause: During the pandemic, management made numerous efforts to contact various accounting and auditing firms including the prior auditing firm. The Association was not able to obtain a qualified auditing firm. Additionally, the Association’s controller retired in December 2020 due to illness. The Association continued to experience staff turnover in the following years, resulting in further delays in the process.
Effect: The delay in completing the required audit resulted in the Association being unable to qualify as a low-risk auditee and could also cause future funding delays.
Recommendation: We recommend that management submit the audited financial statements to the appropriate parties as soon as possible. We also recommend that the Association continue to obtain the necessary temporary support while searching to recruit new staff members. Management may also consider training seasoned staff members for important roles at the Association to provide backup support.
Views of Responsible Officials: The Association’s management acknowledges the finding and has obtained and completed the required audit for the fiscal year 2022-2023. Management will submit the final audited financial statements to the appropriate parties as soon as feasible.
Finding 2023-002 Earmarking percentage requirement not met for DOL Senior Community Service Employment program
Criteria: Per 2 CFR Part 200, Appendix XI, Compliance Supplement May 2023, DOL Senior Community Service Employment, 3. Earmarking:
The amount of federal funds expended for enrollee wages and fringe benefits shall be no less than 75 percent of the grant (20 CFR section 641.873) except in those instances in which a grantee has requested, and DOL has approved such request, to use no less than 65 percent of the grant funds to pay for participant wage and fringe benefits so as to use up to an additional 10 percent of grant funds for participant training and supportive services (42 USC 3056(c)(6)(C)(i)).
Condition: The amount of federal funds expended for enrollee wages and fringe benefits for the DOL Senior Community Service Employment program for fiscal year 2022-2023 was $7,011,612, or 74.8 percent of the grant expenditures of $9,378,107, which is $21,968 less than the required 75 percent. The Association has discussed the issue with DOL and is waiting to hear back from them.
Questioned Cost: $21,968.
Cause: The COVID-19 pandemic had a continuing impact on the senior community, and enrollees’ participation is less than anticipated due to continued concerns about the impact of COVID-19 on seniors. However, certain administrative and fixed costs could not be decreased at the same pace. As a result, the Association missed the required percentage slightly.
Effect: Not meeting the required percentage could lead to return of portion of the funds unless a waiver is obtained.
Recommendation: We recommend that management follow up with DOL to obtain a final decision. We also recommend that management train more staff to help monitor the expenditures requirements timely to mitigate similar issues.
Views of Responsible Officials: The Association’s management acknowledges the finding and is well aware of this issue. Management has discussed with DOL and requested relief from paying back the funds in question. The Association has also trained additional staff members to monitor more closely to ensure the percentage requirements are met on a monthly basis.
Finding 2023-003 Expenditures overclaimed for DOL grant AD-38314-22-60-A-6
Criteria: Per 2 CFR Part 200, Appendix XI, Compliance Supplement May 2023, Part 3, cost principles for nonprofit organizations:
Costs were necessary and reasonable for the performance of the federal award and allocable under the principles of 2CFR 200. Subpart E.
Condition: Per the Association’s expenditures details, grant expenditures for FY22-23 for the DOL grant number AD-38314-22-60-A-6 were $9,378,107. Total payment requests and cash receipts for the grant were $9,399,510. The Association received $21,403 more than expenditures incurred for this grant.
Questioned Cost: $21,403.
Cause: The first payment draw request for the new FY23-24 DOL program expenditures was inadvertently drawn from the DOL FY22-23 account because the new FY23-24 grant account was not available yet for funding withdrawal at that time.
Effect: This will result in funds that should either be returned to the DOL or credited to future DOL programs.
Recommendation: We recommend that management return or credit the funds back to the DOL program.
Views of Responsible Officials: The Association’s management acknowledges the finding and will seek ways to return or credit the funds back to the DOL or DOL programs in FY23-24.