FAC Explorer

Audit 322032

FY End
2023-12-31
Total Expended
$929,995
Findings
6
Programs
3
Organization: Entrepreneurship for All, Inc. (MA)
Year: 2023 Accepted: 2024-09-28
Auditor: Johnson O'Connor Feron & Carucci LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
499233 2023-001 Material Weakness - P
499234 2023-002 Material Weakness - P
499235 2023-003 Significant Deficiency - P
1075675 2023-001 Material Weakness - P
1075676 2023-002 Material Weakness - P
1075677 2023-003 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
59.059 Congressional Grants $593,838 Yes 3
21.027 Coronavirus State and Local Fiscal Recovery Funds $80,000 - 0
14.253 Community Development Block Grant $26,250 - 0

Contacts

Name Title Type
JLHUARZYLK61 Meralis Hood Auditee
8333367255 Douglas Thorpe Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The organization did not incur any indirect costs that were charged to the major program The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Community Catalyst, Inc. (the Organization) 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 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: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The organization did not incur any indirect costs that were charged to the major program Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: INDIRECT COST RATE Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The organization did not incur any indirect costs that were charged to the major program The Company did not elect to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: SUBSEQUENT EVENTS Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The organization did not incur any indirect costs that were charged to the major program The Company has evaluated subsequent events through September 26, 2024, the date on which the Schedule was available to be issued.

Finding Details

Finding 2023-001
Item # 2023-001 Conditional Grant Revenue Recognition (Material Weakness in Internal Control) Criteria: Under Generally Accepted Accounting Principles (GAAP), advances received for conditional grants for expenses not yet incurred are considered a refundable advance liability and should be recognized as revenue only once the barriers are overcome, which includes incurrence of allowable costs under Office of Management and Budget Circular A-122. Condition: Management did not recognize conditional grant revenue for the full amount of the award after allowable costs were incurred. Cause: Management was unaware that conditional grant revenue was required to be deferred until allowable costs under the federal grant agreement were incurred and did not record the related revenue in the proper period. Effect: Conditional grant revenue was understated by $593,838. This is considered a material weakness in the Organization’s internal control over financial reporting. Recommendation: We recommend that management ensure that conditional grant revenue is recognized upon incurrence of allowable costs under the federal grant. We also recommend that management enroll in a professional education program that covers Uniform Guidance compliance. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout 2024 to be in full compliance with GAAP and the Uniform Guidance. This exercise is anticipated to be complete by the end of the fiscal year.
Finding 2023-002
Item # 2023-002 Net Assets with Donor Restrictions (Material Weakness in Internal Control) Criteria: Under GAAP, net assets with donor restrictions should be released from restrictions when the award terms of the related grants or contributions are met. Condition: Management did not release all restricted net assets within the proper period. Cause: Management did not examine grant and contribution agreements carefully enough to determine the nature of the applicable terms for restrictions and did not take necessary measures to ensure that net assets with donor restrictions were properly released throughout the fiscal year. Effect: Net assets with donor restrictions were overstated by $3,571,287 and net assets without donor restrictions was understated by $3,571,287. Recommendation: We recommend that management ensures that it examines grant agreements carefully to determine the nature of the applicable terms for restrictions, and to take necessary measures to ensure that net assets with donor restrictions were properly released throughout the fiscal year. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout 2024 to be in full compliance with GAAP. This exercise is anticipated to be complete by the end of the fiscal year.
Finding 2023-003
Item # 2023-003 Reconciliation of Bank Accounts (Significant Deficiency in Internal Control) Criteria: Under GAAP, bank accounts are required to be reconciled on a regular basis to ensure that they are properly stated under the accrual basis of accounting. Condition: During the year under audit, the Organization did not reconcile the ending balances of all accounts held with financial institutions during the fiscal year. Cause: The Organization did not compare the balances per statements received for bank accounts from financial institutions with its own internal account balances and failed to make the necessary accrual based accounting adjustments for reconciling items. Effect: Failure to update internal controls to comply with the requirements of the GAAP could result in ineffective monitoring of costs allocated to the federal program. Recommendation: The Organization should strengthen its internal control practices by updating its policies and procedures to comply with GAAP. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout 2024 to be in full compliance with GAAP. This exercise is anticipated to be complete by the end of the fiscal year.
Finding 2023-001
Item # 2023-001 Conditional Grant Revenue Recognition (Material Weakness in Internal Control) Criteria: Under Generally Accepted Accounting Principles (GAAP), advances received for conditional grants for expenses not yet incurred are considered a refundable advance liability and should be recognized as revenue only once the barriers are overcome, which includes incurrence of allowable costs under Office of Management and Budget Circular A-122. Condition: Management did not recognize conditional grant revenue for the full amount of the award after allowable costs were incurred. Cause: Management was unaware that conditional grant revenue was required to be deferred until allowable costs under the federal grant agreement were incurred and did not record the related revenue in the proper period. Effect: Conditional grant revenue was understated by $593,838. This is considered a material weakness in the Organization’s internal control over financial reporting. Recommendation: We recommend that management ensure that conditional grant revenue is recognized upon incurrence of allowable costs under the federal grant. We also recommend that management enroll in a professional education program that covers Uniform Guidance compliance. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout 2024 to be in full compliance with GAAP and the Uniform Guidance. This exercise is anticipated to be complete by the end of the fiscal year.
Finding 2023-002
Item # 2023-002 Net Assets with Donor Restrictions (Material Weakness in Internal Control) Criteria: Under GAAP, net assets with donor restrictions should be released from restrictions when the award terms of the related grants or contributions are met. Condition: Management did not release all restricted net assets within the proper period. Cause: Management did not examine grant and contribution agreements carefully enough to determine the nature of the applicable terms for restrictions and did not take necessary measures to ensure that net assets with donor restrictions were properly released throughout the fiscal year. Effect: Net assets with donor restrictions were overstated by $3,571,287 and net assets without donor restrictions was understated by $3,571,287. Recommendation: We recommend that management ensures that it examines grant agreements carefully to determine the nature of the applicable terms for restrictions, and to take necessary measures to ensure that net assets with donor restrictions were properly released throughout the fiscal year. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout 2024 to be in full compliance with GAAP. This exercise is anticipated to be complete by the end of the fiscal year.
Finding 2023-003
Item # 2023-003 Reconciliation of Bank Accounts (Significant Deficiency in Internal Control) Criteria: Under GAAP, bank accounts are required to be reconciled on a regular basis to ensure that they are properly stated under the accrual basis of accounting. Condition: During the year under audit, the Organization did not reconcile the ending balances of all accounts held with financial institutions during the fiscal year. Cause: The Organization did not compare the balances per statements received for bank accounts from financial institutions with its own internal account balances and failed to make the necessary accrual based accounting adjustments for reconciling items. Effect: Failure to update internal controls to comply with the requirements of the GAAP could result in ineffective monitoring of costs allocated to the federal program. Recommendation: The Organization should strengthen its internal control practices by updating its policies and procedures to comply with GAAP. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout 2024 to be in full compliance with GAAP. This exercise is anticipated to be complete by the end of the fiscal year.