Audit 320026

FY End
2023-12-31
Total Expended
$1.75M
Findings
4
Programs
5
Organization: Form Communities, Inc. (TX)
Year: 2023 Accepted: 2024-09-19

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
497330 2023-001 Significant Deficiency - B
497331 2023-001 Significant Deficiency - B
1073772 2023-001 Significant Deficiency - B
1073773 2023-001 Significant Deficiency - B

Contacts

Name Title Type
XYN9J2NMQUL5 Minot Pratt Auditee
2108990434 Christopher M. Carmona Auditor
No contacts on file

Notes to SEFA

Title: Note A: Basis of Presentation Accounting Policies: See tab 2. De Minimis Rate Used: N Rate Explanation: Form Communities has elected to not use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Form Communities used an approved indirect cost rate as negotiated with governmental agencies during the year ended December 31, 2023. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of Form Communities, Inc. (Form Communities) under programs of the federal government for the year ended December 31, 2023. 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 selected portion of the operations of Form Communities, it is not intended, and does not, present the financial position, changes in net assets or cash flows of Form Communities. Therefore, some amounts presented in the Schedule may differ from amounts presented in the consolidated financial statements. All of Form Communities’ federal awards were in the form of cash assistance for the year ended December 31, 2023.
Title: Note B: Summary of Significant Accounting Policies Accounting Policies: See tab 2. De Minimis Rate Used: N Rate Explanation: Form Communities has elected to not use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Form Communities used an approved indirect cost rate as negotiated with governmental agencies during the year ended December 31, 2023. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in 2 CFR Part 230, Costs Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: Note C: Reconciliation to Consolidated Statement of Activities in Consolidated Financial Statements Accounting Policies: See tab 2. De Minimis Rate Used: N Rate Explanation: Form Communities has elected to not use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Form Communities used an approved indirect cost rate as negotiated with governmental agencies during the year ended December 31, 2023. Total Expenditures of Federal Awards $ 1 ,753,051 State and Local Funding Sources 510,821 Total Federal, State, and Local Funding Sources $ 2 ,263,872

Finding Details

Section III – Federal Award Findings and Questioned Costs Finding: #2023-001 Program Title: Block Grants for Community Mental Health Services, Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 93.958, 21.027 Contract Grant Number: HHS000063200002 & HHS00477100002, 2023-02-02-0043 Federal Award Years: September 1, 2022 to August 31, 2024, March 1, 2023 to February 28, 2025 Federal Agency: U.S. Department of Health and Human Services, U.S. Department of Treasury Allowable Costs Type of Finding: Significant Deficiency and Other Noncompliance Criteria: 2 CFR part 200 establishes cost principles for determining costs applicable to Federal Awards and requires costs be adequately documented. In addition, 2 CFR section 200.430 establishes standards for documentation of personnel expenses with the terms and conditions of the federal award. These awards are subject to the requirements set forth in 45 CFR Part 75, which defines the standards for documentation of personnel expenses as charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award, an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Based on procedures performed, we identified payroll expenditures allocated among federal award programs that were not supported by the time and effort allocation certifications. As a result, verification documentation of payroll allocations across federal award programs was not obtained. Cause: Lack of documentation to support payroll allocations across federal award programs. Effect: Noncompliance with Allowable Costs compliance requirements of the Uniform Guidance and terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend Form Communities improve procedures for tracking and reporting of time allocations across federal award programs to ensure compliance with the compliance requirements and terms and conditions of federal awards. Views of Responsible Officials: Management agrees with the recommendations to improve tracking and reporting of time allocations across federal award programs to conform with the compliance requirements and terms and conditions of federal awards.
Section III – Federal Award Findings and Questioned Costs Finding: #2023-001 Program Title: Block Grants for Community Mental Health Services, Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 93.958, 21.027 Contract Grant Number: HHS000063200002 & HHS00477100002, 2023-02-02-0043 Federal Award Years: September 1, 2022 to August 31, 2024, March 1, 2023 to February 28, 2025 Federal Agency: U.S. Department of Health and Human Services, U.S. Department of Treasury Allowable Costs Type of Finding: Significant Deficiency and Other Noncompliance Criteria: 2 CFR part 200 establishes cost principles for determining costs applicable to Federal Awards and requires costs be adequately documented. In addition, 2 CFR section 200.430 establishes standards for documentation of personnel expenses with the terms and conditions of the federal award. These awards are subject to the requirements set forth in 45 CFR Part 75, which defines the standards for documentation of personnel expenses as charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award, an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Based on procedures performed, we identified payroll expenditures allocated among federal award programs that were not supported by the time and effort allocation certifications. As a result, verification documentation of payroll allocations across federal award programs was not obtained. Cause: Lack of documentation to support payroll allocations across federal award programs. Effect: Noncompliance with Allowable Costs compliance requirements of the Uniform Guidance and terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend Form Communities improve procedures for tracking and reporting of time allocations across federal award programs to ensure compliance with the compliance requirements and terms and conditions of federal awards. Views of Responsible Officials: Management agrees with the recommendations to improve tracking and reporting of time allocations across federal award programs to conform with the compliance requirements and terms and conditions of federal awards.
Section III – Federal Award Findings and Questioned Costs Finding: #2023-001 Program Title: Block Grants for Community Mental Health Services, Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 93.958, 21.027 Contract Grant Number: HHS000063200002 & HHS00477100002, 2023-02-02-0043 Federal Award Years: September 1, 2022 to August 31, 2024, March 1, 2023 to February 28, 2025 Federal Agency: U.S. Department of Health and Human Services, U.S. Department of Treasury Allowable Costs Type of Finding: Significant Deficiency and Other Noncompliance Criteria: 2 CFR part 200 establishes cost principles for determining costs applicable to Federal Awards and requires costs be adequately documented. In addition, 2 CFR section 200.430 establishes standards for documentation of personnel expenses with the terms and conditions of the federal award. These awards are subject to the requirements set forth in 45 CFR Part 75, which defines the standards for documentation of personnel expenses as charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award, an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Based on procedures performed, we identified payroll expenditures allocated among federal award programs that were not supported by the time and effort allocation certifications. As a result, verification documentation of payroll allocations across federal award programs was not obtained. Cause: Lack of documentation to support payroll allocations across federal award programs. Effect: Noncompliance with Allowable Costs compliance requirements of the Uniform Guidance and terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend Form Communities improve procedures for tracking and reporting of time allocations across federal award programs to ensure compliance with the compliance requirements and terms and conditions of federal awards. Views of Responsible Officials: Management agrees with the recommendations to improve tracking and reporting of time allocations across federal award programs to conform with the compliance requirements and terms and conditions of federal awards.
Section III – Federal Award Findings and Questioned Costs Finding: #2023-001 Program Title: Block Grants for Community Mental Health Services, Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 93.958, 21.027 Contract Grant Number: HHS000063200002 & HHS00477100002, 2023-02-02-0043 Federal Award Years: September 1, 2022 to August 31, 2024, March 1, 2023 to February 28, 2025 Federal Agency: U.S. Department of Health and Human Services, U.S. Department of Treasury Allowable Costs Type of Finding: Significant Deficiency and Other Noncompliance Criteria: 2 CFR part 200 establishes cost principles for determining costs applicable to Federal Awards and requires costs be adequately documented. In addition, 2 CFR section 200.430 establishes standards for documentation of personnel expenses with the terms and conditions of the federal award. These awards are subject to the requirements set forth in 45 CFR Part 75, which defines the standards for documentation of personnel expenses as charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award, an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Based on procedures performed, we identified payroll expenditures allocated among federal award programs that were not supported by the time and effort allocation certifications. As a result, verification documentation of payroll allocations across federal award programs was not obtained. Cause: Lack of documentation to support payroll allocations across federal award programs. Effect: Noncompliance with Allowable Costs compliance requirements of the Uniform Guidance and terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend Form Communities improve procedures for tracking and reporting of time allocations across federal award programs to ensure compliance with the compliance requirements and terms and conditions of federal awards. Views of Responsible Officials: Management agrees with the recommendations to improve tracking and reporting of time allocations across federal award programs to conform with the compliance requirements and terms and conditions of federal awards.