ACCOUNT RECONCILIATIONS: STATEMENT OF CRITERIA: A SOUND ACCOUNTING SYSTEM REQUIRES THAT THE FINANCIAL STATEMENT ACCOUNTS ARE RECORDED AND RECONCILED IN AN ACCURATE AND TIMELY MANNER. STATEMENT OF CONDITION: A SIGNIFICANT NUMBER OF GENERAL LEDGER ACCOUNTS WERE NOT RECONCILED TO THE UNDERLYING SUPPORTING DOCUMENTATION RESULTING IN A SIGNIFICANT NUMBER OF AUDIT ADJUSTMENTS BEING MADE AS PART OF AUDIT PROCEDURES. STATEMENT OF CAUSE: OVER THE LAST TWO YEARS THE ORGANIZATION HAS EXPERIENCED RAPID GROWTH AND DIVERSIFICATION. MOST OF THIS GROWTH AND DIVERSIFICATION OCCURED AS OUR CHIEF FINANCIAL OFFICER (OVER 20 YEARS OF SERVICE) WAS IN THE PROCESS OF RETIRING AND WE WERE IN THE PROCESS OF HIRING A NEW ONE. AS A RESULT, THE ORGANIZATION LOST MUCH INSTITUTIONAL MEMORY AND FOUND ITSELF FOCUSING ON BUILDING TOWARD THE FUTURE. GROWTH AND DIVERSIFICATION INCLUDE: A MERGE THAT OCCURED ON 7/1/2022 ALLOWING US TO GAIN A FOOTPRINT IN MASSILLON, TOLEDO, AND UPPER SANDUSKY OHIO, THE ESTABLISHMENT OF A SOCIAL ENTERPRISE (CADENCE COFFEEHOUSE AND CREPERIE), AND THE AWARD OF THE OHIORISE CONTRACT WITH AETNA. THESE ACTIVITIES ALL STARTED TO GAIN MOMENTUM IN THE LAST HALF OF FY 21-22, ALLOWED FOR APPROXIMATELY 130 NEW EMPLOYEES FROM JANUARY 22 TO DATE, AND CAUSED THE FOCUS OF OUR CFO TO BE SQUARELY REDIRECTED AT FUTURE FOCUSED BUSINESS ISSUES. THE NEW CFO HAS BEEN GETTING ACCLIMATED TO PREVIOUS POLICIES AND PROCEDURES, WHILE ESTABLISHING A FRAMEWORK FOR A MORE INTEGRATED AND ROBUST SYSTEM UTILIZING FINANCIAL EDGE NXT WITH THE HOPE THAT WE BECOME NIMBLER WHILE ESTABLISHING SOLID ACCOUNTING PRACTICES. ANOTHER FACTOR THAT BECAME CLEAR AS THE YEAR PROGRESSED IS THAT WE WOULD NEED TO HIRE A STAFF ACCOUNTANT TO PROVIDE SUPPORT TO THE CFO AND TAKE CARE OF THE DAY-TO-DAY POSTING AND GENERAL BOOKKEEPING DUTIES. DUE TO THE CURRENT LABOR CRISIS, THIS PROCESS TOOK APPROXIMATELY 8 MONTHS FROM WHEN WE INITIALLY POSTED THE POSITION. AS OF JANUARY 1ST, 2023, WE ARE FULLY STAFFED. STATEMENT OF EFFECT: BECAUSE OF THESE INSTANCES NOTED ABOVE, A SIGNIFICANT NUMBER OF GENERAL LEDGER ACCOUNTS WERE NOT RECONCILED TO THE UNDERLYING SUPPORTING DOCUMENTATION, RESULTING IN A SIGNIFICANT NUMBER OF GENERAL LEDGER ACCOUNTS BEING MISSTATED. THIS LED TO A SIGNIFICANT NUMBER OF AUDIT ADJUSTMENTS BEING MADE. UNRELIABLE GENERAL LEDGER ACCOUNT BALANCES MAKE IT MORE DIFFICULT FOR THE GOVERNANCE BOARD TO MAKE DECISIONS BASED ON MONTHLY FINANCIAL STATEMENTS. RECOMMENDATION: MANAGEMENT SHOULD FORMALIZE MONTHLY ACCOUNTING AND CLOSING PROCEDURES TO INCLUDE RECONCILIATION OF ALL SIGNIFICANT ACCOUNT BALANCES AND TO ENSURE ACCURATE FINANCIAL REPORTING INFORMATION IS BEING MAINTAINED BY THE ORGANIZATION. MANAGEMENT RESPONSE: MANAGEMENT AT CADENCE CARE NETWORK AGREES WITH AUDITORS THAT THEY SHOULD FORMALIZE MONTHLY ACCOUNTING AND CLOSING PROCEDURES TO ENCOMPASS RECONCILIATION OF ALL SIGNIFICANT ACCOUNT BALANCES. CURRENTLY, MANAGEMENT IS DEVELOPING A COMPREHENSIVE MONTHLY CLOSING SCHEDULE THAT WILL OUTLINE THE CLOSING TASKS, THEIR RESPECTIVE DUE DATES, AND THE ASSIGNED RESPONSIBLITIES. ADDITIONALLY, MONTHLY FINANCIAL MEETINGS ARE BEING ESTABLISHED TO ENHANCE PREPAREDNESS FOR MONTH-END AND PROVIDE A PLATFORM TO ADDRESS ANY ISSUES, INEFFICIENCIES, OR BARRIERS ENCOUNTERED BY THE FINANCE DEPARTMENT. FUTHERMORE, THE EXECUTIVE TEAM IS DILIGENTLY REVIEWING THE FINANCIAL POLICIES TO ALIGN THEM MORE EFFECTIVELY WITH THE RAPID GROWTH EXPERIENCED BY CADENCE CARE NETWORK.
FEDERAL AWARDS - CADENCE IS RESPONSIBLE FOR THE MONITORING AND TRACKING OF FUNDING SOURCES. SPECIFICALLY TO IDENTIFY FEDERALLY SOURCED AWARDS TO DETERMINE COMPLIANCE WITH OMB'S UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS. STATEMENT OF CRITERIA: AN ENTITY THAT EXCEEDS $750,000 OR MORE IN FEDERAL AWARDS DURING THE FISCAL YEAR IS REQUIRED TO OBTAIN A SINGLE AUDIT. STATEMENT OF CONDITION: FEDERAL AWARDS WERE NOT BEING PROPERLY MONITORED, TRACKED AND IDENTIFIED AS FEDERALLY SOURCED BY THE ORGANIZATION. STATEMENT OF CAUSE: MANAGEMENT WAS OPERATING UNDER THE ERRONEOUS ASSUMPTION THAT THE PROGRAM THAT TOOK IT OVER THE SINGLE AUDIT THRESHOLD (BRIDGES) WAS HANDLED THE SAME WAY AS OTHER PROGRAMS FUNDED VIA THE SAME REVENUE STREAM (FOSTER CARE) AS THEY BOTH RECEIVED TITLE IV-E DOLLARS. AS FUNDS ARE DISTRIBUTED THROUGH ODJFS, THE MANAGEMENT TEAM OPERATED AS IF THAT REVENUE WAS TREATED THE SAME WAY AS FOSTER CARE. ONCE WE HAD SOME FURTHER DISCUSSIONS WITH THE AUDIT TEAM, WE RECOGNIZED THE ERROR. STATEMENT OF EFFECT: BECAUSE OF THESE INSTANCES NOTED ABOVE, THE ORGANIZATION WAS NOT AWARE THEY EXCEEDED THE $750,000 SINGLE AUDIT THRESHOLD AND WERE REQUIRED TO HAVE A SINGLE AUDIT PERFORMED. RECOMMENDATION: MANAGEMENT SHOULD FORMALIZE A SYSTEM OF PROCEDURES AND CONTROLS TO ENSURE THE ORGANIZATION IS PROPERLY TRACKING FEDERAL AWARDS AND COMPLYING WITH ANY APPLICABLE REPORTING REQUIREMENTS AS IT RELATES TO FEDERAL AWARDS RECEIVED. MANAGEMENT RESPONSE: MANAGEMENT AT CADENCE CARE NETWORK HAS APPOINTED A NEW CHIEF FINANCIAL OFFICER (CFO) WITH EXTENSIVE KNOWLEDGE AND EXPERIENCE WITH THE SINGLE AUDIT TO REPLACE THE PREVIOUS CFO. WE HAVE FULL CONFIDENCE IN HIS EXPERTISE AND PRIOR NOT-FOR-PROFIT EXPERIENCE TO EFFECTIVELY ESTABLISH AND EXECUTE THE ESSENTIAL PROCESSES AND PROTOCOLS NEEDED FOR ENHANCED TRACKING, REPORTING, AND DOCUMENTATION OF FEDERAL GRANTS. PROCESSES THAT ARE BEING IMPLEMENTED WOULD INCLUDE A GRANT CONTRACT TRACKER TO INDICATE THE START AND END DATE OF FEDERAL FUNDING CONTRACTS, A MONTHLY ROLL FORWARD TIE OUT TO TRACK REVENUE, RECEIVABLES, AND EXPENSES, AND THE USE AND IMPLEMENTATION OF CUSTOM FIELDS IN THE BLACKBAUD ACCOUNTING SOFTWARE TO ISOLATE AND IMPROVE TRACKING FEDERAL FUNDS.
DOCUMENTATION OF ALLOWABLE EXPENSES. STATEMENT OF CRITERIA: MANAGEMENT IS REPONSIBLE FOR MAINTAINING DOCUMENTATION TO SUPPORT COMPLIANCE WITH ALLOWABLE EXPENDITURES PER APPLICABLE FEDERAL AWARDS. STATEMENT OF CONDITION: THE ORGANIZATION COULD NOT PROVIDE DOCUMENTATION , SPECIFICALLY A LEASE AGREEMENT TO SUPPORT COSTS CHARGED TO THE FEDERAL AWARD FOR A BRIDGES PARTICIPANT SELECTED FOR COMPLIANCE TESTING. STATEMENT OF CAUSE: LEASE AGREEMENTS FOR BRIDGES PARTICIPANTS ARE BETWEEN THE BRIDGES PARTICIPANT AND THE LANDLORD. DUE TO THE SEVERITY OF THE CLIENT POPULATION'S BEHAVIORAL HEALTH ISSUES , OFTEN THEY ARE RELUCTANT TO READILY PROVIDE DOCUMENTATION OF LEASE AGREEMENTS IN A TIMELY FASHION. THE LEASE WAS NOT PROPERLY FILED AS A RESULT. STATEMENT OF EFFECT: THE MONTHLY LEASE EXPENSE FOR ONE OF THE BRIDGES PARTICIPANTS COULD NOT BE VERIFIED WITH THE APPLICABLE LEASE AGREEMENT. RECOMMENDATION: MANAGEMENT SHOULD ROUTINELY FILE ALL LEASE AGREEMENTS FOR BRIDGES PARTICIPANTS TO ENSURE PROPER COMPLIANCE OVER BRIDGES REPORTING. MANAGEMENT RESPONSE: THE CFO HAS SET UP A SYSTEM WITHIN OUR LOCAL SHAREPOINT SITE THAT WILL AFFORD BRIDGES LIAISONS THE ABILITY TO SCAN AND UPLOAD ALL REQUIRED SUPPORTING DOCUMENTS TO A CENTRALIZED SITE ACCESSIBLE TO THE FISCAL DEPARTMENT. PAYMENTS WILL NOT BE MADE ON ANY NEW LEASE UNTIL ALL SUPPORTING DOCUMENTS ARE PRESENT.
STATEMENT OF CRITERIA: THE ORGANIZATION DOES NOT MAINTAIN A FORMAL MANUAL FOR POLICIES AND PROCEDURES RELATED TO ACCOUNTING AND FINANCIAL REPORTING FOR FEDERAL GRANTS REQUIREMENTS. STATEMENT OF CONDITION: THE ORGANIZATION IS RESPONSIBLE FOR THE EFFICIENT AND EFFECTIVE ADMINISTRATION OF FEDERAL AWARDS THROUGH THE APPLICATION OF SOUND MANAGEMENT PRACTICES. STATEMENT OF CAUSE: THE ORGANIZATION DOES IN FACT MAINTAIN A FORMAL MANUAL FOR POLICIES RELATED TO ACCOUNTING AND FINANCE. THOSE POLICIES MAY BE DEFICIENT IN HOW THEY ADDRESS FEDERAL GRANT REQUIREMENTS DUE TO THE FACT THAT MANAGEMENT WAS OPERATING UNDER THE ERRONEOUS ASSUMPTION THAT IT DID NOT MEET THE SINGLE AUDIT THRESHOLD AND AS A RESULT IT DID NOT FORMALIZE POLICIES AND PROCEDURES AS THEY RELATE TO FEDERAL AWARDS. STATEMENT OF EFFECT: THE ORGANIZATION MAY NOT BE ABLE TO ENSURE EFFICIENT AND EFFECTIVE ADMINISTRATION OF FEDERAL AWARDS. STATEMENT OF EFFECT: THE ORGANIZATION MAY NOT BE ABLE TO ENSURE EFFICIENT AND EFFECTIVE ADMINISTRATION OF FEDERAL AWARDS. RECOMMENDATION: MANAGEMENT SHOULD FORMALLY DOCUMENT POLICIES AND PROCEDURES RELATED ACCOUNTING AND FINANCIAL REPORTING FOR FEDERAL GRANT REQUIREMENTS AND CONTINUE TO ENHANCE THESE FORMAL PRACTICES AND PROCEDURES ON A REGULAR BASIS AS DETERMINED NECESSARY. MANGEMENT RESPONSE: THE ORGANIZATION HAS RECENTLY HIRED A NEW CFO WITH EXTENSIVE EXPERIENCE MANAGING FEDERAL AWARDS. UPON REVIEW OF CURRENT FISCAL POLICIES AND PRACTICES, THE CFO WILL DEVELOP AND IMPLEMENT NEW WRITTEN POLICIES AND PROCEDURES RELATED TO ACCOUNTING AND FINANCIAL REPORTING AS THEY RELATE TO FEDERAL GRANT REQUIREMENTS. MANAGEMENT WILL SEEK INPUT FROM OUR INDEPENDENT AUDTING FIRM AS IT RELATES TO THE IMPLEMENTATION OF SAID POLICIES. THE MANAGEMENT TEAM'S GOAL IS TO HAVE DRAFT POLICIES AVAILABLE BY THE END OF SEPTEMBER 2024.
ACCOUNT RECONCILIATIONS: STATEMENT OF CRITERIA: A SOUND ACCOUNTING SYSTEM REQUIRES THAT THE FINANCIAL STATEMENT ACCOUNTS ARE RECORDED AND RECONCILED IN AN ACCURATE AND TIMELY MANNER. STATEMENT OF CONDITION: A SIGNIFICANT NUMBER OF GENERAL LEDGER ACCOUNTS WERE NOT RECONCILED TO THE UNDERLYING SUPPORTING DOCUMENTATION RESULTING IN A SIGNIFICANT NUMBER OF AUDIT ADJUSTMENTS BEING MADE AS PART OF AUDIT PROCEDURES. STATEMENT OF CAUSE: OVER THE LAST TWO YEARS THE ORGANIZATION HAS EXPERIENCED RAPID GROWTH AND DIVERSIFICATION. MOST OF THIS GROWTH AND DIVERSIFICATION OCCURED AS OUR CHIEF FINANCIAL OFFICER (OVER 20 YEARS OF SERVICE) WAS IN THE PROCESS OF RETIRING AND WE WERE IN THE PROCESS OF HIRING A NEW ONE. AS A RESULT, THE ORGANIZATION LOST MUCH INSTITUTIONAL MEMORY AND FOUND ITSELF FOCUSING ON BUILDING TOWARD THE FUTURE. GROWTH AND DIVERSIFICATION INCLUDE: A MERGE THAT OCCURED ON 7/1/2022 ALLOWING US TO GAIN A FOOTPRINT IN MASSILLON, TOLEDO, AND UPPER SANDUSKY OHIO, THE ESTABLISHMENT OF A SOCIAL ENTERPRISE (CADENCE COFFEEHOUSE AND CREPERIE), AND THE AWARD OF THE OHIORISE CONTRACT WITH AETNA. THESE ACTIVITIES ALL STARTED TO GAIN MOMENTUM IN THE LAST HALF OF FY 21-22, ALLOWED FOR APPROXIMATELY 130 NEW EMPLOYEES FROM JANUARY 22 TO DATE, AND CAUSED THE FOCUS OF OUR CFO TO BE SQUARELY REDIRECTED AT FUTURE FOCUSED BUSINESS ISSUES. THE NEW CFO HAS BEEN GETTING ACCLIMATED TO PREVIOUS POLICIES AND PROCEDURES, WHILE ESTABLISHING A FRAMEWORK FOR A MORE INTEGRATED AND ROBUST SYSTEM UTILIZING FINANCIAL EDGE NXT WITH THE HOPE THAT WE BECOME NIMBLER WHILE ESTABLISHING SOLID ACCOUNTING PRACTICES. ANOTHER FACTOR THAT BECAME CLEAR AS THE YEAR PROGRESSED IS THAT WE WOULD NEED TO HIRE A STAFF ACCOUNTANT TO PROVIDE SUPPORT TO THE CFO AND TAKE CARE OF THE DAY-TO-DAY POSTING AND GENERAL BOOKKEEPING DUTIES. DUE TO THE CURRENT LABOR CRISIS, THIS PROCESS TOOK APPROXIMATELY 8 MONTHS FROM WHEN WE INITIALLY POSTED THE POSITION. AS OF JANUARY 1ST, 2023, WE ARE FULLY STAFFED. STATEMENT OF EFFECT: BECAUSE OF THESE INSTANCES NOTED ABOVE, A SIGNIFICANT NUMBER OF GENERAL LEDGER ACCOUNTS WERE NOT RECONCILED TO THE UNDERLYING SUPPORTING DOCUMENTATION, RESULTING IN A SIGNIFICANT NUMBER OF GENERAL LEDGER ACCOUNTS BEING MISSTATED. THIS LED TO A SIGNIFICANT NUMBER OF AUDIT ADJUSTMENTS BEING MADE. UNRELIABLE GENERAL LEDGER ACCOUNT BALANCES MAKE IT MORE DIFFICULT FOR THE GOVERNANCE BOARD TO MAKE DECISIONS BASED ON MONTHLY FINANCIAL STATEMENTS. RECOMMENDATION: MANAGEMENT SHOULD FORMALIZE MONTHLY ACCOUNTING AND CLOSING PROCEDURES TO INCLUDE RECONCILIATION OF ALL SIGNIFICANT ACCOUNT BALANCES AND TO ENSURE ACCURATE FINANCIAL REPORTING INFORMATION IS BEING MAINTAINED BY THE ORGANIZATION. MANAGEMENT RESPONSE: MANAGEMENT AT CADENCE CARE NETWORK AGREES WITH AUDITORS THAT THEY SHOULD FORMALIZE MONTHLY ACCOUNTING AND CLOSING PROCEDURES TO ENCOMPASS RECONCILIATION OF ALL SIGNIFICANT ACCOUNT BALANCES. CURRENTLY, MANAGEMENT IS DEVELOPING A COMPREHENSIVE MONTHLY CLOSING SCHEDULE THAT WILL OUTLINE THE CLOSING TASKS, THEIR RESPECTIVE DUE DATES, AND THE ASSIGNED RESPONSIBLITIES. ADDITIONALLY, MONTHLY FINANCIAL MEETINGS ARE BEING ESTABLISHED TO ENHANCE PREPAREDNESS FOR MONTH-END AND PROVIDE A PLATFORM TO ADDRESS ANY ISSUES, INEFFICIENCIES, OR BARRIERS ENCOUNTERED BY THE FINANCE DEPARTMENT. FUTHERMORE, THE EXECUTIVE TEAM IS DILIGENTLY REVIEWING THE FINANCIAL POLICIES TO ALIGN THEM MORE EFFECTIVELY WITH THE RAPID GROWTH EXPERIENCED BY CADENCE CARE NETWORK.
FEDERAL AWARDS - CADENCE IS RESPONSIBLE FOR THE MONITORING AND TRACKING OF FUNDING SOURCES. SPECIFICALLY TO IDENTIFY FEDERALLY SOURCED AWARDS TO DETERMINE COMPLIANCE WITH OMB'S UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS. STATEMENT OF CRITERIA: AN ENTITY THAT EXCEEDS $750,000 OR MORE IN FEDERAL AWARDS DURING THE FISCAL YEAR IS REQUIRED TO OBTAIN A SINGLE AUDIT. STATEMENT OF CONDITION: FEDERAL AWARDS WERE NOT BEING PROPERLY MONITORED, TRACKED AND IDENTIFIED AS FEDERALLY SOURCED BY THE ORGANIZATION. STATEMENT OF CAUSE: MANAGEMENT WAS OPERATING UNDER THE ERRONEOUS ASSUMPTION THAT THE PROGRAM THAT TOOK IT OVER THE SINGLE AUDIT THRESHOLD (BRIDGES) WAS HANDLED THE SAME WAY AS OTHER PROGRAMS FUNDED VIA THE SAME REVENUE STREAM (FOSTER CARE) AS THEY BOTH RECEIVED TITLE IV-E DOLLARS. AS FUNDS ARE DISTRIBUTED THROUGH ODJFS, THE MANAGEMENT TEAM OPERATED AS IF THAT REVENUE WAS TREATED THE SAME WAY AS FOSTER CARE. ONCE WE HAD SOME FURTHER DISCUSSIONS WITH THE AUDIT TEAM, WE RECOGNIZED THE ERROR. STATEMENT OF EFFECT: BECAUSE OF THESE INSTANCES NOTED ABOVE, THE ORGANIZATION WAS NOT AWARE THEY EXCEEDED THE $750,000 SINGLE AUDIT THRESHOLD AND WERE REQUIRED TO HAVE A SINGLE AUDIT PERFORMED. RECOMMENDATION: MANAGEMENT SHOULD FORMALIZE A SYSTEM OF PROCEDURES AND CONTROLS TO ENSURE THE ORGANIZATION IS PROPERLY TRACKING FEDERAL AWARDS AND COMPLYING WITH ANY APPLICABLE REPORTING REQUIREMENTS AS IT RELATES TO FEDERAL AWARDS RECEIVED. MANAGEMENT RESPONSE: MANAGEMENT AT CADENCE CARE NETWORK HAS APPOINTED A NEW CHIEF FINANCIAL OFFICER (CFO) WITH EXTENSIVE KNOWLEDGE AND EXPERIENCE WITH THE SINGLE AUDIT TO REPLACE THE PREVIOUS CFO. WE HAVE FULL CONFIDENCE IN HIS EXPERTISE AND PRIOR NOT-FOR-PROFIT EXPERIENCE TO EFFECTIVELY ESTABLISH AND EXECUTE THE ESSENTIAL PROCESSES AND PROTOCOLS NEEDED FOR ENHANCED TRACKING, REPORTING, AND DOCUMENTATION OF FEDERAL GRANTS. PROCESSES THAT ARE BEING IMPLEMENTED WOULD INCLUDE A GRANT CONTRACT TRACKER TO INDICATE THE START AND END DATE OF FEDERAL FUNDING CONTRACTS, A MONTHLY ROLL FORWARD TIE OUT TO TRACK REVENUE, RECEIVABLES, AND EXPENSES, AND THE USE AND IMPLEMENTATION OF CUSTOM FIELDS IN THE BLACKBAUD ACCOUNTING SOFTWARE TO ISOLATE AND IMPROVE TRACKING FEDERAL FUNDS.
DOCUMENTATION OF ALLOWABLE EXPENSES. STATEMENT OF CRITERIA: MANAGEMENT IS REPONSIBLE FOR MAINTAINING DOCUMENTATION TO SUPPORT COMPLIANCE WITH ALLOWABLE EXPENDITURES PER APPLICABLE FEDERAL AWARDS. STATEMENT OF CONDITION: THE ORGANIZATION COULD NOT PROVIDE DOCUMENTATION , SPECIFICALLY A LEASE AGREEMENT TO SUPPORT COSTS CHARGED TO THE FEDERAL AWARD FOR A BRIDGES PARTICIPANT SELECTED FOR COMPLIANCE TESTING. STATEMENT OF CAUSE: LEASE AGREEMENTS FOR BRIDGES PARTICIPANTS ARE BETWEEN THE BRIDGES PARTICIPANT AND THE LANDLORD. DUE TO THE SEVERITY OF THE CLIENT POPULATION'S BEHAVIORAL HEALTH ISSUES , OFTEN THEY ARE RELUCTANT TO READILY PROVIDE DOCUMENTATION OF LEASE AGREEMENTS IN A TIMELY FASHION. THE LEASE WAS NOT PROPERLY FILED AS A RESULT. STATEMENT OF EFFECT: THE MONTHLY LEASE EXPENSE FOR ONE OF THE BRIDGES PARTICIPANTS COULD NOT BE VERIFIED WITH THE APPLICABLE LEASE AGREEMENT. RECOMMENDATION: MANAGEMENT SHOULD ROUTINELY FILE ALL LEASE AGREEMENTS FOR BRIDGES PARTICIPANTS TO ENSURE PROPER COMPLIANCE OVER BRIDGES REPORTING. MANAGEMENT RESPONSE: THE CFO HAS SET UP A SYSTEM WITHIN OUR LOCAL SHAREPOINT SITE THAT WILL AFFORD BRIDGES LIAISONS THE ABILITY TO SCAN AND UPLOAD ALL REQUIRED SUPPORTING DOCUMENTS TO A CENTRALIZED SITE ACCESSIBLE TO THE FISCAL DEPARTMENT. PAYMENTS WILL NOT BE MADE ON ANY NEW LEASE UNTIL ALL SUPPORTING DOCUMENTS ARE PRESENT.
STATEMENT OF CRITERIA: THE ORGANIZATION DOES NOT MAINTAIN A FORMAL MANUAL FOR POLICIES AND PROCEDURES RELATED TO ACCOUNTING AND FINANCIAL REPORTING FOR FEDERAL GRANTS REQUIREMENTS. STATEMENT OF CONDITION: THE ORGANIZATION IS RESPONSIBLE FOR THE EFFICIENT AND EFFECTIVE ADMINISTRATION OF FEDERAL AWARDS THROUGH THE APPLICATION OF SOUND MANAGEMENT PRACTICES. STATEMENT OF CAUSE: THE ORGANIZATION DOES IN FACT MAINTAIN A FORMAL MANUAL FOR POLICIES RELATED TO ACCOUNTING AND FINANCE. THOSE POLICIES MAY BE DEFICIENT IN HOW THEY ADDRESS FEDERAL GRANT REQUIREMENTS DUE TO THE FACT THAT MANAGEMENT WAS OPERATING UNDER THE ERRONEOUS ASSUMPTION THAT IT DID NOT MEET THE SINGLE AUDIT THRESHOLD AND AS A RESULT IT DID NOT FORMALIZE POLICIES AND PROCEDURES AS THEY RELATE TO FEDERAL AWARDS. STATEMENT OF EFFECT: THE ORGANIZATION MAY NOT BE ABLE TO ENSURE EFFICIENT AND EFFECTIVE ADMINISTRATION OF FEDERAL AWARDS. STATEMENT OF EFFECT: THE ORGANIZATION MAY NOT BE ABLE TO ENSURE EFFICIENT AND EFFECTIVE ADMINISTRATION OF FEDERAL AWARDS. RECOMMENDATION: MANAGEMENT SHOULD FORMALLY DOCUMENT POLICIES AND PROCEDURES RELATED ACCOUNTING AND FINANCIAL REPORTING FOR FEDERAL GRANT REQUIREMENTS AND CONTINUE TO ENHANCE THESE FORMAL PRACTICES AND PROCEDURES ON A REGULAR BASIS AS DETERMINED NECESSARY. MANGEMENT RESPONSE: THE ORGANIZATION HAS RECENTLY HIRED A NEW CFO WITH EXTENSIVE EXPERIENCE MANAGING FEDERAL AWARDS. UPON REVIEW OF CURRENT FISCAL POLICIES AND PRACTICES, THE CFO WILL DEVELOP AND IMPLEMENT NEW WRITTEN POLICIES AND PROCEDURES RELATED TO ACCOUNTING AND FINANCIAL REPORTING AS THEY RELATE TO FEDERAL GRANT REQUIREMENTS. MANAGEMENT WILL SEEK INPUT FROM OUR INDEPENDENT AUDTING FIRM AS IT RELATES TO THE IMPLEMENTATION OF SAID POLICIES. THE MANAGEMENT TEAM'S GOAL IS TO HAVE DRAFT POLICIES AVAILABLE BY THE END OF SEPTEMBER 2024.