Internal Control Impact: Material Weakness
Repeat Finding: No
Questioned Costs: None
Criteria: Boys & Girls Clubs of Central Georgia, Inc., (“ the Organization”) management is responsible for having internal controls and procedures in place to accurately report the results of its operations, close its books, and properly prepare the financial statements in accordance with GAAP. This includes properly recognizing expenses and revenues in the proper period on the accrual basis of accounting.
Condition: The lack of appropriate policies, procedures, and internal control processes led to a failure to accurately record financial information in the proper period and material audit adjusting entries.
During the audit, auditor proposed adjusting journal entries were posted for the following: Adjusting cash accounts to their reconciled amounts, correcting accounts receivable to amounts earned but not yet received as of year-end, capitalizing fixed asset additions, calculating depreciation expense, correcting accounts payable and accrued payroll to amounts due and payable as of year-end, and adjusting contributions in kind revenue and expenses to their proper amount.
Cause: The Organization has experienced turnover in its accounting department function. This has led to a failure to establish adequate internal control processes to detect and prevent inaccurate financial reporting.
Effect: Insufficient internal controls over financial reporting could result in accounting errors or material misstatement due to error or fraud.
Recommendation: Marshall Jones recommends that the Organization receive additional assistance in improving their financial reporting processes from individuals who are familiar with GAAP. Marshall Jones also recommends that management establish policies and procedures to ensure that management level reviews of monthly and annual financial information are performed on a timely basis.
Views of Responsible
Officials: Management of the School acknowledges the finding. Please refer to the Corrective Action Plan.
Internal Control Impact: Significant deficiency
Criteria: Under Uniform Guidance 2 CFR Section 200.512(a), the audit shall be completed and the data collection form and reporting package shall be electronically transmitted within the earlier of 30 days after receipt of the auditors’ reports, or nine (9) months after the end of the audit period.
Condition: The Organization’s audits for the years ended December 31, 2023 and 2022 were not able to be completed and the data collection form and reporting package electronically transmitted to the Federal Audit Clearinghouse within nine (9) months after the end of the audit period.
Cause: The start of the Organization’s audits was delayed due to delays in closing the books.
Effect: Failure to complete the audit and submit the data collection form and reporting package timely could result in a failure to meet the requirements imposed by Federal grantor agencies and by the Uniform Guidance.
Recommendation: Marshall Jones recommends that the Organization establish a process to close their year-end books in a timely manner and begin the audit well in advance of the filing deadline for the data collection form and reporting package.
Views of Responsible
Officials: Management of the Organization concurs with the finding. Please refer to the Corrective Action Plan.
Internal Control Impact: Material weakness
Criteria: 2 CFR Part 200 Subpart F requires auditors to perform procedures to obtain an understanding of internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs. Internal control should be implemented to the degree possible to assign to different individuals the responsibility for approving, executing and recording transactions. The basic premise is that no one individual should have access to both physical assets and the related accounting records or to all phases of a transaction.
Condition: The Organization was unable to provide documentation to substantiate supervisor review and approval of employee’s timesheets for 4 out of 40 payroll costs allocated to the Federal grant which were selected for testing from January through December, 2023.
Cause: The failure to provide documentation was due to the Organization not having adequate procedures in place to ensure review and approval of timesheets for supervisory-level employees.
Effect: Because of the failure to provide documentation of internal controls being implemented and operating effectively, we were unable to substantiate that internal control structure elements reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the Statement of Expenditures of Federal Awards being audited may occur and not be detected within a timely period by management in the normal course of performing assigned functions.
Recommendation: The Organization should establish procedures to ensure that timesheets for all employees charging time to Federal grant programs are reviewed and approved.
Views of Responsible
Officials: Management of the Organization concurs with the finding. Please refer to the Corrective Action Plan.
Internal Control Impact: Material weakness
Criteria: 2 CFR Part 200 Subpart F requires auditors to perform procedures to obtain an understanding of internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs. Internal control should be implemented to the degree possible to assign to different individuals the responsibility for approving, executing and recording transactions. The basic premise is that no one individual should have access to both physical assets and the related accounting records or to all phases of a transaction.
Condition: The Organization was unable to provide documentation to substantiate supervisor review and approval of employee’s timesheets for 2 out of 7 payroll costs allocated to the Federal grant which were selected for testing from January through December, 2023. In addition, the Organization was unable to provide documentation to substantiate review and approval prior to payment of non-payroll expenditures for 4 out of 23 expenditures allocated to the Federal grant which were selected for testing from January through December 2023.
Cause: The failure to provide documentation was due to the Organization not having adequate procedures in place to ensure review and approval of timesheets for supervisory-level employees and to review and approve non-payroll expenditures allocated to the grant.
Effect: Because of the failure to provide documentation of internal controls being implemented and operating effectively, we were unable to substantiate that internal control structure elements reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the Statement of Expenditures of Federal Awards being audited may occur and not be detected within a timely period by management in the normal course of performing assigned functions.
Recommendation: The Organization should establish procedures to ensure that timesheets for all employees charging time to Federal grant programs are reviewed and approved and to ensure that all non-payroll expenditures charged to Federal grant programs are reviewed and approved.
Views of Responsible
Officials: Management of the Organization concurs with the finding. Please refer to the Corrective Action Plan.
Internal Control Impact: Material weakness
Criteria: The Federal statutes, regulations, and terms and conditions of the TRIO cluster list construction, renovation and remodeling of facilities as unallowable activities. These cost items can never be charged to any TRIO program.
Condition: The Organization used TRIO funds to pay for various construction, renovation and remodeling costs during the year ended December 31, 2023.
Cause: The Organization had a lack of awareness of the specific activities which were unallowed per the grant award. The Organization also failed to implement adequate internal control activities to review and approve costs being charged to the grant program.
Effect: Use of grant funds for unallowable activities resulted in noncompliance and questioned costs.
Questioned costs: Known questioned costs identified totaled $14,891. Likely extrapolated questioned costs totaled $21,456 over the remaining population.
Recommendation: The Organization should ensure that terms and conditions of grant awards are reviewed to identify unallowable activities. The Organization should also implement procedures to ensure that costs being charged to the grant program are reviewed and approved.
Views of Responsible
Officials: Management of the Organization concurs with the finding. Please refer to the Corrective Action Plan.
Internal Control Impact: Material Weakness
Repeat Finding: No
Questioned Costs: None
Criteria: Boys & Girls Clubs of Central Georgia, Inc., (“ the Organization”) management is responsible for having internal controls and procedures in place to accurately report the results of its operations, close its books, and properly prepare the financial statements in accordance with GAAP. This includes properly recognizing expenses and revenues in the proper period on the accrual basis of accounting.
Condition: The lack of appropriate policies, procedures, and internal control processes led to a failure to accurately record financial information in the proper period and material audit adjusting entries.
During the audit, auditor proposed adjusting journal entries were posted for the following: Adjusting cash accounts to their reconciled amounts, correcting accounts receivable to amounts earned but not yet received as of year-end, capitalizing fixed asset additions, calculating depreciation expense, correcting accounts payable and accrued payroll to amounts due and payable as of year-end, and adjusting contributions in kind revenue and expenses to their proper amount.
Cause: The Organization has experienced turnover in its accounting department function. This has led to a failure to establish adequate internal control processes to detect and prevent inaccurate financial reporting.
Effect: Insufficient internal controls over financial reporting could result in accounting errors or material misstatement due to error or fraud.
Recommendation: Marshall Jones recommends that the Organization receive additional assistance in improving their financial reporting processes from individuals who are familiar with GAAP. Marshall Jones also recommends that management establish policies and procedures to ensure that management level reviews of monthly and annual financial information are performed on a timely basis.
Views of Responsible
Officials: Management of the School acknowledges the finding. Please refer to the Corrective Action Plan.
Internal Control Impact: Significant deficiency
Criteria: Under Uniform Guidance 2 CFR Section 200.512(a), the audit shall be completed and the data collection form and reporting package shall be electronically transmitted within the earlier of 30 days after receipt of the auditors’ reports, or nine (9) months after the end of the audit period.
Condition: The Organization’s audits for the years ended December 31, 2023 and 2022 were not able to be completed and the data collection form and reporting package electronically transmitted to the Federal Audit Clearinghouse within nine (9) months after the end of the audit period.
Cause: The start of the Organization’s audits was delayed due to delays in closing the books.
Effect: Failure to complete the audit and submit the data collection form and reporting package timely could result in a failure to meet the requirements imposed by Federal grantor agencies and by the Uniform Guidance.
Recommendation: Marshall Jones recommends that the Organization establish a process to close their year-end books in a timely manner and begin the audit well in advance of the filing deadline for the data collection form and reporting package.
Views of Responsible
Officials: Management of the Organization concurs with the finding. Please refer to the Corrective Action Plan.
Internal Control Impact: Material weakness
Criteria: 2 CFR Part 200 Subpart F requires auditors to perform procedures to obtain an understanding of internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs. Internal control should be implemented to the degree possible to assign to different individuals the responsibility for approving, executing and recording transactions. The basic premise is that no one individual should have access to both physical assets and the related accounting records or to all phases of a transaction.
Condition: The Organization was unable to provide documentation to substantiate supervisor review and approval of employee’s timesheets for 4 out of 40 payroll costs allocated to the Federal grant which were selected for testing from January through December, 2023.
Cause: The failure to provide documentation was due to the Organization not having adequate procedures in place to ensure review and approval of timesheets for supervisory-level employees.
Effect: Because of the failure to provide documentation of internal controls being implemented and operating effectively, we were unable to substantiate that internal control structure elements reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the Statement of Expenditures of Federal Awards being audited may occur and not be detected within a timely period by management in the normal course of performing assigned functions.
Recommendation: The Organization should establish procedures to ensure that timesheets for all employees charging time to Federal grant programs are reviewed and approved.
Views of Responsible
Officials: Management of the Organization concurs with the finding. Please refer to the Corrective Action Plan.
Internal Control Impact: Material weakness
Criteria: 2 CFR Part 200 Subpart F requires auditors to perform procedures to obtain an understanding of internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs. Internal control should be implemented to the degree possible to assign to different individuals the responsibility for approving, executing and recording transactions. The basic premise is that no one individual should have access to both physical assets and the related accounting records or to all phases of a transaction.
Condition: The Organization was unable to provide documentation to substantiate supervisor review and approval of employee’s timesheets for 2 out of 7 payroll costs allocated to the Federal grant which were selected for testing from January through December, 2023. In addition, the Organization was unable to provide documentation to substantiate review and approval prior to payment of non-payroll expenditures for 4 out of 23 expenditures allocated to the Federal grant which were selected for testing from January through December 2023.
Cause: The failure to provide documentation was due to the Organization not having adequate procedures in place to ensure review and approval of timesheets for supervisory-level employees and to review and approve non-payroll expenditures allocated to the grant.
Effect: Because of the failure to provide documentation of internal controls being implemented and operating effectively, we were unable to substantiate that internal control structure elements reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the Statement of Expenditures of Federal Awards being audited may occur and not be detected within a timely period by management in the normal course of performing assigned functions.
Recommendation: The Organization should establish procedures to ensure that timesheets for all employees charging time to Federal grant programs are reviewed and approved and to ensure that all non-payroll expenditures charged to Federal grant programs are reviewed and approved.
Views of Responsible
Officials: Management of the Organization concurs with the finding. Please refer to the Corrective Action Plan.
Internal Control Impact: Material weakness
Criteria: The Federal statutes, regulations, and terms and conditions of the TRIO cluster list construction, renovation and remodeling of facilities as unallowable activities. These cost items can never be charged to any TRIO program.
Condition: The Organization used TRIO funds to pay for various construction, renovation and remodeling costs during the year ended December 31, 2023.
Cause: The Organization had a lack of awareness of the specific activities which were unallowed per the grant award. The Organization also failed to implement adequate internal control activities to review and approve costs being charged to the grant program.
Effect: Use of grant funds for unallowable activities resulted in noncompliance and questioned costs.
Questioned costs: Known questioned costs identified totaled $14,891. Likely extrapolated questioned costs totaled $21,456 over the remaining population.
Recommendation: The Organization should ensure that terms and conditions of grant awards are reviewed to identify unallowable activities. The Organization should also implement procedures to ensure that costs being charged to the grant program are reviewed and approved.
Views of Responsible
Officials: Management of the Organization concurs with the finding. Please refer to the Corrective Action Plan.