Audit 324194

2023-001 Timely Submission of Single Audit Report Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Reporting Criteria: According to the OMB Compliance Supplement, Part 6 and 2 CFR 200.512 (a)(1), non-federal entities that expend $750,000 or more in federal awards during a fiscal year are required to submit a complete and accurate Data Collection Form (DCF) and a Single Audit report package to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. The DCF is a critical element in ensuring transparency and accountability for the use of federal funds. Condition: The Organization did not submit the required DCF for the fiscal year ended June 30, 2023, by the required deadline. Cause of Condition: The delay in submission was caused by the changes in the executive director position: the retirement of the executive director, the appointment of a transitory executive director, and the subsequent passing of the transitory executive director while looking for a new executive director. Effect: Failure to submit the DCF on time resulted in noncompliance with federal regulations, which could lead to the potential withholding of future federal funding or other sanctions. It also undermines the Organization's compliance status and may affect the entity's standing with grantor agencies and other stakeholders. Questioned Cost: Not quantifiable. Recommendation: We recommend that the Organization implement stronger internal controls and procedures to ensure timely submission of the DCF. This could include designating a responsible party for tracking and submitting the DCF, creating a timeline and checklist for required submissions, and conducting periodic reviews to ensure compliance with deadlines. Additionally, the organization should provide training to relevant staff on the importance of meeting federal compliance requirements. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.

2023-002 Incorrect Allocation of Program Expense and Inadequate Documentation Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: According to 2 CFR §200.302, entities receiving federal funds must have effective internal controls over the use of funds to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Furthermore, 2 CFR §200.403 states that costs must be adequately documented and be allocable to the respective federal award to be considered allowable. Condition: During the testing of 60 expense transactions, the auditor identified the following exceptions: - 5 transactions were allocated to the incorrect grant. - 3 transactions were assigned to the incorrect expense program. - 4 transactions lacked the required invoice and payment approval documentation as per the organization’s internal controls. Cause of Condition: The identified issues likely stem from a lack of adherence to established internal control procedures and inadequate oversight or training regarding the correct allocation of expenses. Additionally, there may be deficiencies in the document retention process, leading to incomplete records. Effect: The misallocation of expenses could result in non-compliance with the terms and conditions of federal grants, leading to potential questioned costs and the need for reimbursement of funds. The lack of supporting documentation further increases the risk of noncompliance and reduces the audit trail, which could impair the organization’s ability to justify its use of federal funds. Questioned Cost: $24,464 Recommendation: The organization should reinforce its internal controls over expense allocation and documentation retention by providing additional training to staff involved in the financial management of grants. Implementing periodic reviews and reconciliations of grant allocations and ensuring that all supporting documentation is complete and properly filed will help mitigate the risk of misallocations and incomplete records in the future. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.

2023-003 Indirect Cost Allocation Methodology Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: Based on 2 CFR Part 200 subpart E, Appendix IV, NPOs that receive Federal Awards are required to comply with the cost principles outlined in the Uniform Guidance when charging indirect costs to those awards. The criteria for NPO documentation of indirect cost allocation methodology include identifying the methods used to allocate indirect costs, documenting the basis for determining the allocation of each indirect cost, describing changes made to the methodology, accounting for differences between estimated and actual amounts, supporting the indirect cost rate(s) used, and demonstrating compliance with any specific limitations on indirect cost reimbursement imposed by the Federal Award. Condition: The management was not able to provide documentation on how they allocate indirect costs and expenses to the federal awards. Cause of Condition: The management has used an informal method to allocate indirect costs, which was not documented or if documented, may not meet the requirements of Uniform Guidance. Effect: If an organization's indirect cost allocation methodology is not properly documented, it may be difficult for the auditors to verify that the indirect costs allocated to a particular federal award are reasonable, necessary, and allocable. This may result in disallowed costs or findings in the audit report, which could impact the organization's ability to receive future federal awards. Questioned Cost: Not quantifiable. Recommendation: We recommend that management should consider documenting their indirect cost allocation methodology by doing the following: 1. Develop a written policy: Develop a written policy that outlines the methodology used to allocate indirect costs. This policy should be reviewed and updated periodically to ensure that it remains current and accurate. 2. Establish procedures: Establish procedures for documenting the allocation of indirect costs. This can include maintaining detailed records of costs and the methodology used to allocate them. 3. Train employees: Provide training to employees who are responsible for indirect cost allocation to ensure that they understand the policy and procedures for documenting the allocation of indirect costs. 4. Review documentation regularly: Review the documentation of the indirect cost allocation process regularly to ensure that it is accurate and complete. 5. Engage internal and external auditors: Engage internal and external auditors to review the documentation of the indirect cost allocation process periodically to ensure that it complies with Uniform Guidance. 6. Assign responsibility: Assign responsibility to specific individuals within the organization for documenting the indirect cost allocation process to ensure that it is a priority. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.

2023-004 Late Submission of and Discrepancies within Final Expenditure Reports Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Reporting Criteria: According to 2 CFR §200.302, entities that receive federal awards must have accurate financial management systems that allow for the preparation of reports that reflect accurate, current, and complete disclosure of financial results. Additionally, 2 CFR §200.415(a) requires that financial reports must be based on the accounting records and accurately reflect the actual expenditures incurred. Furthermore, 2 CFR §200.328(b)(1) states that federal grant recipients are required to submit performance and financial reports within 90 days following the end of the grant period, unless an extension has been granted by the funding agency. Timely submission of these reports is essential to demonstrate compliance with grant terms and conditions. Condition: The auditor noted that certain expenditures in the final expenditures report submitted by the Organization exceeded the actual expenditures recorded in the general ledger and/or exceeded the grant budget. In addition, the auditor also noted that final reports were submitted to funding sources at least 5 months (150 days) after the end of the grant period. This suggests that Cleveland UMADAOP did not submit the reports within the required timeframe and may not have an effective process in place to track and meet reporting deadlines. Cause of Condition: The discrepancies appear to be the result of inadequate reconciliation processes between the general ledger and the financial reports. This may have been compounded by the misunderstanding of reporting requirements, leading to the inclusion of inaccurate figures in the final expenditures report. In addition, the late submission of final reports appears to result from the absence of a robust process for monitoring and tracking reporting deadlines. This may also indicate inadequate internal controls or insufficient staffing dedicated to managing grant compliance and reporting responsibilities. Effect: Reporting expenditures in excess of actual amounts may lead to non-compliance with federal grant requirements, and could result in questioned costs and potential disallowance of funds. Moreover, such inaccuracies undermine the reliability of financial reports and could impair the organization’s credibility with federal agencies and other stakeholders. In addition, failure to submit timely reports can lead to non-compliance with grant agreements, which may result in funding delays, penalties, or even the potential loss of future funding opportunities. Furthermore, late submissions may strain relationships with funding sources and damage the Organization’s reputation. Questioned Cost: $114,860 Recommendation: Cleveland UMADAOP should enhance its reconciliation procedures to ensure that reported expenditures accurately reflect actual amounts spent as recorded in the general ledger. Implementing a robust review process prior to the submission of final expenditure reports will help prevent discrepancies and ensure compliance with federal grant requirements. Additionally, the Organization should implement a formal process to track and monitor all reporting deadlines associated with its grants. This process could include a centralized calendar, regular reminders, and a designated individual or team responsible for ensuring that all reports are completed and submitted on time. Additionally, the Organization should consider conducting training for staff involved in grant management and financial reporting to reinforce the importance of adhering to reporting deadlines andcompliance to requirements. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of materialnoncompliance for the major program 93.959 at 5% of the totalawards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.

2023-005 Inadequate Cash Management Procedures and Noncompliance with Drawdown Requirements Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Cash Management Criteria: Per 2 CFR §200.305(b), non-Federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds for program purposes. Furthermore, entities must have written procedures that clearly outline the timing and methods for drawing down federal funds in accordance with cash management requirements. These procedures should be documented, reviewed, approved, and periodically revised to ensure ongoing compliance. Condition: During our testing of cash management procedures, we noted that Cleveland UMADAOP's written procedures lacked crucial information, including when the policies were prepared, approved, implemented, reviewed, and revised. Additionally, the organization's current drawdown procedure, which involves dividing the total award amount into four equal quarterly drawdowns, may not comply with the cash management requirements. This method does not necessarily align with the requirement the Cleveland UMADAOP needs to drawdown only the amount that they need and minimize the time elapsing from the receipt of federal funds and the disbursement for program expenditures. Cause of Condition: Cleveland UMADAOP may not have fully understood the compliance requirements related to cash management, specifically the need to align drawdowns with actual cash needs rather than on a predetermined quarterly basis. The lack of detailed documentation and approval processes for cash management policies indicates potential gaps in internal controls and oversight. Effect: The use of a predetermined drawdown schedule that is not based on actual cash needs could lead to excess federal funds being held unnecessarily, increasing the risk of non-compliance with cash management requirements. Additionally, the absence of comprehensive documentation for cash management procedures could result in inconsistencies in implementation, a lack of accountability, and difficulties in ensuring that policies remain current and effective. Questioned Cost: Not quantifiable. Recommendation: Cleveland UMADAOP should revise its cash management procedures to ensure they are in full compliance with federal requirements. Cleveland UMADAOP should adopt a drawdown process that is based on actual cash needs, minimizing the time elapsing between the drawdown of federal funds and their disbursement for program expenditures. Additionally, the organization should update its written procedures to include documentation of when the policies were prepared, approved, implemented, reviewed, and revised. This will help ensure that cash management practices are transparent, consistent, and compliant with applicable regulations. Finally, the organization should consider training relevant staff on the updated procedures and the importance of compliance with cash management requirements. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.

2023-006 Non-compliance with Compliance Requirements Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse and 93.788 Multiple Approach Response Strategies (MARS) Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: Per 2 CFR §200.305(b), non-Federal entities are responsible for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. According to 2 CFR §200.403, costs must meet the following general criteria to be allowable under Federal awards: (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award concerning types or amounts of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (g) Be adequately documented. See also 2 CFR §200.300 through 200.309 of this part. (h) Costs must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carryforward unobligated balances to subsequent budget periods pursuant to 2 CFR §200.308(e)(3). Condition: During the review of the schedule of expenditures of federal awards, the auditor noted the following conditions: 1. Non-Conforming Expenditures: An expenditure under the MARS Carry Over did not conform to the limitations set forth in the federal award budget. Specifically, $20,892 was charged for Garage Repairs, whereas the grant budget for equipment was only $1,200, designated specifically for two software purchases at $600 each. 2. Inadequate Documentation: a) The FASD Grant had a period that ended on March 14, 2023. Although the grant period was extended, this extension was not documented, b) A $26,383 FASD expenditure was reallocated to MARS 2.0 Carry Over without substantialjustification for the reclassification, and c) An adjustment of $24,044 was made from MARS 2.0 Carry Over FY 2022 without adequate supporting documentation. 3. Expenditures Outside the Approved Grant Period: a) the FASD total award of $340,000 was reported as fully expended in the 2023 fiscal year-end expenditure report (“Close-Out Report”) submitted to the Grants and Funding Management System on January 31, 2024. However, the Schedule of Federal Expenditure showed only $312,707 in expenditures. The remaining $27, 293 was indicated as a carryover for FY 2024. Of the $312,707 in expenditures, $71,277 were incurred after March 14, 2023, with only $21,395 falling within the 45-day closeout period following that date, b) $26,800 in unallowable costs were incurred under the MARS 2.0 Carry Over 45 days after the performance period ended on September 29, 2022, specifically for payroll processing, and c) $1,813 in costs were incurred before the performance period for the “Mars One-Pill Can Kill” grant dated February 1, 2023 to September 29, 2023. There was no prior grant. 4. Misclassification: $2,010 in MARS 3.0 expenditures were incorrectly classified under FASD. Cause of Condition: Insufficient understanding of program requirements. There is no formal monitoring of program expenditures on a periodic basis to ensure that the Organization’s expenditures and activities align with their grant budget and period of performance. Inconsistent adherence to record retention policies, resulting from the temporary hybrid working-from-home arrangements due to the pandemic, has led to insufficient support for all federal expenditures. The Organization lacks written policies and procedures for allocating expenditures across different programs. Effect: The current procedures for administering Federal funds are inadequately designed to ensure that costs and activities are managed in a manner consistent with the underlying agreements and the terms and conditions of the Federal award. These deficiencies could lead to misstatements in the SEFA that are not corrected promptly and could result in the charging of unallowable costs. Questioned Cost: $179,117 Recommendation: We recommend the following actions: 1. Training: Program administrators should receive adequatetraining and acquire knowledge of the compliancerequirements for each specific program to ensure adherence to these requirements. 2. Periodic Program Monitoring: The organization should establish a periodic review process for each program budget to ensure alignment with each line item in the budget. 3. Formal Procedures: The organization should document its procedures for expense allocation to ensure consistency timeliness, and accuracy. 4. Adequate Staffing: The organization should ensure that processes are staffed with knowledgeable personnel capableof reviewing and adhering to established policies and procedures. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.

2023-001 Timely Submission of Single Audit Report Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Reporting Criteria: According to the OMB Compliance Supplement, Part 6 and 2 CFR 200.512 (a)(1), non-federal entities that expend $750,000 or more in federal awards during a fiscal year are required to submit a complete and accurate Data Collection Form (DCF) and a Single Audit report package to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. The DCF is a critical element in ensuring transparency and accountability for the use of federal funds. Condition: The Organization did not submit the required DCF for the fiscal year ended June 30, 2023, by the required deadline. Cause of Condition: The delay in submission was caused by the changes in the executive director position: the retirement of the executive director, the appointment of a transitory executive director, and the subsequent passing of the transitory executive director while looking for a new executive director. Effect: Failure to submit the DCF on time resulted in noncompliance with federal regulations, which could lead to the potential withholding of future federal funding or other sanctions. It also undermines the Organization's compliance status and may affect the entity's standing with grantor agencies and other stakeholders. Questioned Cost: Not quantifiable. Recommendation: We recommend that the Organization implement stronger internal controls and procedures to ensure timely submission of the DCF. This could include designating a responsible party for tracking and submitting the DCF, creating a timeline and checklist for required submissions, and conducting periodic reviews to ensure compliance with deadlines. Additionally, the organization should provide training to relevant staff on the importance of meeting federal compliance requirements. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.

2023-002 Incorrect Allocation of Program Expense and Inadequate Documentation Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: According to 2 CFR §200.302, entities receiving federal funds must have effective internal controls over the use of funds to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Furthermore, 2 CFR §200.403 states that costs must be adequately documented and be allocable to the respective federal award to be considered allowable. Condition: During the testing of 60 expense transactions, the auditor identified the following exceptions: - 5 transactions were allocated to the incorrect grant. - 3 transactions were assigned to the incorrect expense program. - 4 transactions lacked the required invoice and payment approval documentation as per the organization’s internal controls. Cause of Condition: The identified issues likely stem from a lack of adherence to established internal control procedures and inadequate oversight or training regarding the correct allocation of expenses. Additionally, there may be deficiencies in the document retention process, leading to incomplete records. Effect: The misallocation of expenses could result in non-compliance with the terms and conditions of federal grants, leading to potential questioned costs and the need for reimbursement of funds. The lack of supporting documentation further increases the risk of noncompliance and reduces the audit trail, which could impair the organization’s ability to justify its use of federal funds. Questioned Cost: $24,464 Recommendation: The organization should reinforce its internal controls over expense allocation and documentation retention by providing additional training to staff involved in the financial management of grants. Implementing periodic reviews and reconciliations of grant allocations and ensuring that all supporting documentation is complete and properly filed will help mitigate the risk of misallocations and incomplete records in the future. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.

2023-003 Indirect Cost Allocation Methodology Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: Based on 2 CFR Part 200 subpart E, Appendix IV, NPOs that receive Federal Awards are required to comply with the cost principles outlined in the Uniform Guidance when charging indirect costs to those awards. The criteria for NPO documentation of indirect cost allocation methodology include identifying the methods used to allocate indirect costs, documenting the basis for determining the allocation of each indirect cost, describing changes made to the methodology, accounting for differences between estimated and actual amounts, supporting the indirect cost rate(s) used, and demonstrating compliance with any specific limitations on indirect cost reimbursement imposed by the Federal Award. Condition: The management was not able to provide documentation on how they allocate indirect costs and expenses to the federal awards. Cause of Condition: The management has used an informal method to allocate indirect costs, which was not documented or if documented, may not meet the requirements of Uniform Guidance. Effect: If an organization's indirect cost allocation methodology is not properly documented, it may be difficult for the auditors to verify that the indirect costs allocated to a particular federal award are reasonable, necessary, and allocable. This may result in disallowed costs or findings in the audit report, which could impact the organization's ability to receive future federal awards. Questioned Cost: Not quantifiable. Recommendation: We recommend that management should consider documenting their indirect cost allocation methodology by doing the following: 1. Develop a written policy: Develop a written policy that outlines the methodology used to allocate indirect costs. This policy should be reviewed and updated periodically to ensure that it remains current and accurate. 2. Establish procedures: Establish procedures for documenting the allocation of indirect costs. This can include maintaining detailed records of costs and the methodology used to allocate them. 3. Train employees: Provide training to employees who are responsible for indirect cost allocation to ensure that they understand the policy and procedures for documenting the allocation of indirect costs. 4. Review documentation regularly: Review the documentation of the indirect cost allocation process regularly to ensure that it is accurate and complete. 5. Engage internal and external auditors: Engage internal and external auditors to review the documentation of the indirect cost allocation process periodically to ensure that it complies with Uniform Guidance. 6. Assign responsibility: Assign responsibility to specific individuals within the organization for documenting the indirect cost allocation process to ensure that it is a priority. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.

2023-004 Late Submission of and Discrepancies within Final Expenditure Reports Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Reporting Criteria: According to 2 CFR §200.302, entities that receive federal awards must have accurate financial management systems that allow for the preparation of reports that reflect accurate, current, and complete disclosure of financial results. Additionally, 2 CFR §200.415(a) requires that financial reports must be based on the accounting records and accurately reflect the actual expenditures incurred. Furthermore, 2 CFR §200.328(b)(1) states that federal grant recipients are required to submit performance and financial reports within 90 days following the end of the grant period, unless an extension has been granted by the funding agency. Timely submission of these reports is essential to demonstrate compliance with grant terms and conditions. Condition: The auditor noted that certain expenditures in the final expenditures report submitted by the Organization exceeded the actual expenditures recorded in the general ledger and/or exceeded the grant budget. In addition, the auditor also noted that final reports were submitted to funding sources at least 5 months (150 days) after the end of the grant period. This suggests that Cleveland UMADAOP did not submit the reports within the required timeframe and may not have an effective process in place to track and meet reporting deadlines. Cause of Condition: The discrepancies appear to be the result of inadequate reconciliation processes between the general ledger and the financial reports. This may have been compounded by the misunderstanding of reporting requirements, leading to the inclusion of inaccurate figures in the final expenditures report. In addition, the late submission of final reports appears to result from the absence of a robust process for monitoring and tracking reporting deadlines. This may also indicate inadequate internal controls or insufficient staffing dedicated to managing grant compliance and reporting responsibilities. Effect: Reporting expenditures in excess of actual amounts may lead to non-compliance with federal grant requirements, and could result in questioned costs and potential disallowance of funds. Moreover, such inaccuracies undermine the reliability of financial reports and could impair the organization’s credibility with federal agencies and other stakeholders. In addition, failure to submit timely reports can lead to non-compliance with grant agreements, which may result in funding delays, penalties, or even the potential loss of future funding opportunities. Furthermore, late submissions may strain relationships with funding sources and damage the Organization’s reputation. Questioned Cost: $114,860 Recommendation: Cleveland UMADAOP should enhance its reconciliation procedures to ensure that reported expenditures accurately reflect actual amounts spent as recorded in the general ledger. Implementing a robust review process prior to the submission of final expenditure reports will help prevent discrepancies and ensure compliance with federal grant requirements. Additionally, the Organization should implement a formal process to track and monitor all reporting deadlines associated with its grants. This process could include a centralized calendar, regular reminders, and a designated individual or team responsible for ensuring that all reports are completed and submitted on time. Additionally, the Organization should consider conducting training for staff involved in grant management and financial reporting to reinforce the importance of adhering to reporting deadlines andcompliance to requirements. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of materialnoncompliance for the major program 93.959 at 5% of the totalawards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.

2023-005 Inadequate Cash Management Procedures and Noncompliance with Drawdown Requirements Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Cash Management Criteria: Per 2 CFR §200.305(b), non-Federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds for program purposes. Furthermore, entities must have written procedures that clearly outline the timing and methods for drawing down federal funds in accordance with cash management requirements. These procedures should be documented, reviewed, approved, and periodically revised to ensure ongoing compliance. Condition: During our testing of cash management procedures, we noted that Cleveland UMADAOP's written procedures lacked crucial information, including when the policies were prepared, approved, implemented, reviewed, and revised. Additionally, the organization's current drawdown procedure, which involves dividing the total award amount into four equal quarterly drawdowns, may not comply with the cash management requirements. This method does not necessarily align with the requirement the Cleveland UMADAOP needs to drawdown only the amount that they need and minimize the time elapsing from the receipt of federal funds and the disbursement for program expenditures. Cause of Condition: Cleveland UMADAOP may not have fully understood the compliance requirements related to cash management, specifically the need to align drawdowns with actual cash needs rather than on a predetermined quarterly basis. The lack of detailed documentation and approval processes for cash management policies indicates potential gaps in internal controls and oversight. Effect: The use of a predetermined drawdown schedule that is not based on actual cash needs could lead to excess federal funds being held unnecessarily, increasing the risk of non-compliance with cash management requirements. Additionally, the absence of comprehensive documentation for cash management procedures could result in inconsistencies in implementation, a lack of accountability, and difficulties in ensuring that policies remain current and effective. Questioned Cost: Not quantifiable. Recommendation: Cleveland UMADAOP should revise its cash management procedures to ensure they are in full compliance with federal requirements. Cleveland UMADAOP should adopt a drawdown process that is based on actual cash needs, minimizing the time elapsing between the drawdown of federal funds and their disbursement for program expenditures. Additionally, the organization should update its written procedures to include documentation of when the policies were prepared, approved, implemented, reviewed, and revised. This will help ensure that cash management practices are transparent, consistent, and compliant with applicable regulations. Finally, the organization should consider training relevant staff on the updated procedures and the importance of compliance with cash management requirements. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.

2023-006 Non-compliance with Compliance Requirements Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse and 93.788 Multiple Approach Response Strategies (MARS) Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: Per 2 CFR §200.305(b), non-Federal entities are responsible for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. According to 2 CFR §200.403, costs must meet the following general criteria to be allowable under Federal awards: (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award concerning types or amounts of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (g) Be adequately documented. See also 2 CFR §200.300 through 200.309 of this part. (h) Costs must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carryforward unobligated balances to subsequent budget periods pursuant to 2 CFR §200.308(e)(3). Condition: During the review of the schedule of expenditures of federal awards, the auditor noted the following conditions: 1. Non-Conforming Expenditures: An expenditure under the MARS Carry Over did not conform to the limitations set forth in the federal award budget. Specifically, $20,892 was charged for Garage Repairs, whereas the grant budget for equipment was only $1,200, designated specifically for two software purchases at $600 each. 2. Inadequate Documentation: a) The FASD Grant had a period that ended on March 14, 2023. Although the grant period was extended, this extension was not documented, b) A $26,383 FASD expenditure was reallocated to MARS 2.0 Carry Over without substantialjustification for the reclassification, and c) An adjustment of $24,044 was made from MARS 2.0 Carry Over FY 2022 without adequate supporting documentation. 3. Expenditures Outside the Approved Grant Period: a) the FASD total award of $340,000 was reported as fully expended in the 2023 fiscal year-end expenditure report (“Close-Out Report”) submitted to the Grants and Funding Management System on January 31, 2024. However, the Schedule of Federal Expenditure showed only $312,707 in expenditures. The remaining $27, 293 was indicated as a carryover for FY 2024. Of the $312,707 in expenditures, $71,277 were incurred after March 14, 2023, with only $21,395 falling within the 45-day closeout period following that date, b) $26,800 in unallowable costs were incurred under the MARS 2.0 Carry Over 45 days after the performance period ended on September 29, 2022, specifically for payroll processing, and c) $1,813 in costs were incurred before the performance period for the “Mars One-Pill Can Kill” grant dated February 1, 2023 to September 29, 2023. There was no prior grant. 4. Misclassification: $2,010 in MARS 3.0 expenditures were incorrectly classified under FASD. Cause of Condition: Insufficient understanding of program requirements. There is no formal monitoring of program expenditures on a periodic basis to ensure that the Organization’s expenditures and activities align with their grant budget and period of performance. Inconsistent adherence to record retention policies, resulting from the temporary hybrid working-from-home arrangements due to the pandemic, has led to insufficient support for all federal expenditures. The Organization lacks written policies and procedures for allocating expenditures across different programs. Effect: The current procedures for administering Federal funds are inadequately designed to ensure that costs and activities are managed in a manner consistent with the underlying agreements and the terms and conditions of the Federal award. These deficiencies could lead to misstatements in the SEFA that are not corrected promptly and could result in the charging of unallowable costs. Questioned Cost: $179,117 Recommendation: We recommend the following actions: 1. Training: Program administrators should receive adequatetraining and acquire knowledge of the compliancerequirements for each specific program to ensure adherence to these requirements. 2. Periodic Program Monitoring: The organization should establish a periodic review process for each program budget to ensure alignment with each line item in the budget. 3. Formal Procedures: The organization should document its procedures for expense allocation to ensure consistency timeliness, and accuracy. 4. Adequate Staffing: The organization should ensure that processes are staffed with knowledgeable personnel capableof reviewing and adhering to established policies and procedures. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.