Audit 313185

2022-001 - Timely and Frequent Reconciliation of Account BalancesCriteria: Effectively designed and executed policies and procedures of financial processes should exist to ensureproper recordkeeping and reporting.Condition: Certain balances were not timely or adequately reconciled throughout the year, including accountsreceivable, deferred revenue, accrued salaries payable/salary expense, fixed assets/depreciation, and consumerdeposit asset and liability balances.Cause: Reconciliation of certain account balances did not take place consistently throughout the year. Further,certain programs posted accounts receivable and deferred revenue transactions to the same balance sheetaccount potentially misstating assets and liabilities, as well as potentially misleading users of the financialstatements.Effect: The lack of reconciliations led to material audit adjustments necessary to correct significant errorsidentified in the following areas: accounts receivable, accrued liabilities/accrued salaries, depreciation/fixedassets, unemployment liabilities, deferred revenue and contract and grant revenues recognition /expenditures.Recommendation: We recommend the management review current policies and procedures to ensure thattimely reconciliations are prepared and reviewed throughout the year as part of the monthly financial reportingprocess before financial records are presented to executive management and the board for decision-makingpurposes.Views of Responsible Official and Planned Corrective Actions: The Executive Director and Senior Director ofFinance will continue to update procedures to provide additional clarity of objectives, and to ensure areconciliations are checked by a second individual as part of the process.

2022-002 - Adequate Supervision and Oversight of Year-End Financial RecordsCriteria: Effectively designed and executed policies and procedures of financial processes surrounding annualyear-end close should exist to ensure adequate supervision and oversight are present to properly record andreport accurate final financial information.Condition: There was a lack of oversight over financial year-end adjustments and reporting.Cause: Adequate supervision and timely oversight of year-end financial records, including reconciliations, accountbalances and overall year-end reporting was not adequate. Further, there is significant reliance placed on oneposition within the finance department, resulting in an inequitable distribution of responsibilities.Effect: The lack of supervision and oversight resulted in material audit adjustments to properly present year-endfinancial records.Recommendation: We recommend that management identify and evaluate responsibilities among financedepartment personnel to ensure adequate training to supervise and oversee reconciliations, ensure properposting of journal entries and oversight of the overall financial reporting process. This position should not be thesame position posting journal entries, recording daily activities and reconciling those accounts.Views of Responsible Official and Planned Corrective Actions: Executive management will update and implementprocedures to ensure clear supervision and oversight duties are executed and that these duties are adequatelysegregated.

2022-003 - Schedule of Expenditures of Federal Awards (SEFA) PreparationCriteria: Under Uniform Guidance (2 C.F.R. Part 200) Subpart F Section 200.502 the auditee must alsoprepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee'sfinancial statements which must include the total of all federal awards expended.Condition: Material audit adjustments were required to present a complete and accurate SEFA incompliance with those of Uniform Guidance.Cause: The Agency need to enhance reconciliation of grant vouchers/accruals with general ledger activitythroughout the year. These reconciliations should be analyzed by a member of management with adequateexperience and training to properly recognize revenue in accordance with grants agreements. Further, thepreparation of the SEFA process lacks adequate analysis and oversight.Effect: Several SEFA versions prepared by management required material adjustments to present theAgency?s federal expenditures in accordance with the requirements of Uniform Guidance, including properlydelineating federal vs. non-federal expenses.Recommendation: We recommend that management implement a process to reconcile and review grantvouchers and reports to the general ledger activity throughout the year, including evaluating the revenueand expense relationship. We recommend management implement an oversight function over the processof preparing the SEFA.Views of Responsible Official and Planned Corrective Actions: The Executive Director and Senior Director ofFinance will update year-end closing procedures and checklists to support completion of closing in January ofeach year. The existing process will be documented indicating the Controller will complete the SEFA and asecond review will be completed by a separate individual.

2022-004 Internal Control Design and OversightCriteria: Effectively designed and executed controls should be present to ensure proper recordkeeping andreporting.Condition: Internal processes were not followed in the year under audit:? In two of six selected rental assistance payments, the staff or program manager signatures werenot present on the Housing Expenses Request form, further in a third instance the programmanager signed as both the staff and program manager. In each of these three instances theDirector also signed off.? In one of the three employees selected for payroll testing, OVS functional time sheets supportingthe voucher did not agree to the claim submitted or the payroll distribution of hours for the givenperiod.Cause: In certain circumstances, the client represents that internal control processes were not able to befollowed due to personnel shortages. Further review of functional time sheets should be implemented.Effect: Benefits were paid that did not always have control processes and inaccurate functional time sheetsmay be used to support expenditures reported within grant vouchers.Recommendation: Controls should be effectively designed and executed to ensure adequate oversight andreporting take place.View of Responsible Official: The Executive Director and Senior Director of Finance will continue to includeOVS on its internal audit plan for 2023 and based on the result of internal audits, provide retraining asneeded. The existing policies and procedures will be reviewed and revised to reflect current best businesspractices to ensure compliance reporting, billing, et al.

2022-001 - Timely and Frequent Reconciliation of Account BalancesCriteria: Effectively designed and executed policies and procedures of financial processes should exist to ensureproper recordkeeping and reporting.Condition: Certain balances were not timely or adequately reconciled throughout the year, including accountsreceivable, deferred revenue, accrued salaries payable/salary expense, fixed assets/depreciation, and consumerdeposit asset and liability balances.Cause: Reconciliation of certain account balances did not take place consistently throughout the year. Further,certain programs posted accounts receivable and deferred revenue transactions to the same balance sheetaccount potentially misstating assets and liabilities, as well as potentially misleading users of the financialstatements.Effect: The lack of reconciliations led to material audit adjustments necessary to correct significant errorsidentified in the following areas: accounts receivable, accrued liabilities/accrued salaries, depreciation/fixedassets, unemployment liabilities, deferred revenue and contract and grant revenues recognition /expenditures.Recommendation: We recommend the management review current policies and procedures to ensure thattimely reconciliations are prepared and reviewed throughout the year as part of the monthly financial reportingprocess before financial records are presented to executive management and the board for decision-makingpurposes.Views of Responsible Official and Planned Corrective Actions: The Executive Director and Senior Director ofFinance will continue to update procedures to provide additional clarity of objectives, and to ensure areconciliations are checked by a second individual as part of the process.

2022-002 - Adequate Supervision and Oversight of Year-End Financial RecordsCriteria: Effectively designed and executed policies and procedures of financial processes surrounding annualyear-end close should exist to ensure adequate supervision and oversight are present to properly record andreport accurate final financial information.Condition: There was a lack of oversight over financial year-end adjustments and reporting.Cause: Adequate supervision and timely oversight of year-end financial records, including reconciliations, accountbalances and overall year-end reporting was not adequate. Further, there is significant reliance placed on oneposition within the finance department, resulting in an inequitable distribution of responsibilities.Effect: The lack of supervision and oversight resulted in material audit adjustments to properly present year-endfinancial records.Recommendation: We recommend that management identify and evaluate responsibilities among financedepartment personnel to ensure adequate training to supervise and oversee reconciliations, ensure properposting of journal entries and oversight of the overall financial reporting process. This position should not be thesame position posting journal entries, recording daily activities and reconciling those accounts.Views of Responsible Official and Planned Corrective Actions: Executive management will update and implementprocedures to ensure clear supervision and oversight duties are executed and that these duties are adequatelysegregated.

2022-003 - Schedule of Expenditures of Federal Awards (SEFA) PreparationCriteria: Under Uniform Guidance (2 C.F.R. Part 200) Subpart F Section 200.502 the auditee must alsoprepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee'sfinancial statements which must include the total of all federal awards expended.Condition: Material audit adjustments were required to present a complete and accurate SEFA incompliance with those of Uniform Guidance.Cause: The Agency need to enhance reconciliation of grant vouchers/accruals with general ledger activitythroughout the year. These reconciliations should be analyzed by a member of management with adequateexperience and training to properly recognize revenue in accordance with grants agreements. Further, thepreparation of the SEFA process lacks adequate analysis and oversight.Effect: Several SEFA versions prepared by management required material adjustments to present theAgency?s federal expenditures in accordance with the requirements of Uniform Guidance, including properlydelineating federal vs. non-federal expenses.Recommendation: We recommend that management implement a process to reconcile and review grantvouchers and reports to the general ledger activity throughout the year, including evaluating the revenueand expense relationship. We recommend management implement an oversight function over the processof preparing the SEFA.Views of Responsible Official and Planned Corrective Actions: The Executive Director and Senior Director ofFinance will update year-end closing procedures and checklists to support completion of closing in January ofeach year. The existing process will be documented indicating the Controller will complete the SEFA and asecond review will be completed by a separate individual.

2022-004 Internal Control Design and OversightCriteria: Effectively designed and executed controls should be present to ensure proper recordkeeping andreporting.Condition: Internal processes were not followed in the year under audit:? In two of six selected rental assistance payments, the staff or program manager signatures werenot present on the Housing Expenses Request form, further in a third instance the programmanager signed as both the staff and program manager. In each of these three instances theDirector also signed off.? In one of the three employees selected for payroll testing, OVS functional time sheets supportingthe voucher did not agree to the claim submitted or the payroll distribution of hours for the givenperiod.Cause: In certain circumstances, the client represents that internal control processes were not able to befollowed due to personnel shortages. Further review of functional time sheets should be implemented.Effect: Benefits were paid that did not always have control processes and inaccurate functional time sheetsmay be used to support expenditures reported within grant vouchers.Recommendation: Controls should be effectively designed and executed to ensure adequate oversight andreporting take place.View of Responsible Official: The Executive Director and Senior Director of Finance will continue to includeOVS on its internal audit plan for 2023 and based on the result of internal audits, provide retraining asneeded. The existing policies and procedures will be reviewed and revised to reflect current best businesspractices to ensure compliance reporting, billing, et al.