Condition: The Center did not submit their financial statements to the Federal Audit Clearinghouse prior to the filing deadline.
Criteria: Entities subject to single audit requirements are required to submit their financial statements within nine months of the fiscal year end or thirty days of the audit report date (whichever is sooner) in accordance with 2 CFR part 200 subpart F.
Cause: The Center was not previously required to file with the Federal Audit Clearinghouse under 2 CFR part 200 subpart F §200.507(c)(1) because its prior grant expenditures did not exceed the $750,000 threshold. During the course of the Center’s annual audit, the determination was made that federal funds were spent in excess of $750,000. Upon this determination, the scope of the financial audit was expanded to ensure compliance with 2 CFR part 200 Subpart F. We concluded the single audit on November 10, 2023.
Effect: Submission was not made timely.
Recommendation: We recommend the Center closely monitor federal expenditures and ensure accurate reporting in the future to enable earlier determination if a filing with the Federal Audit Clearinghouse is required. In addition, we recommend starting the audit process in the spring to allow ample time to comply with the nine-month deadline.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees that the single audit report was not timely filed. As referenced above, the Center was previously under the $750,000 threshold for the single audit requirement, but completed and submitted the single audit report once the requirement was known. The Center has provided a corrective action plan to ensure timely filing going forward.
Condition: We identified salary expenses for one employee applied to one housing grant tested that were not authorized in the grant budget.
Criteria: As required by 2 CFR section 200.430, the Center must meet the following mandatory standards:
(1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an
unallowable activity and a direct or indirect cost activity.
Cause: The Center retained a third-party accounting firm to perform accounting functions in 2022, due to staff turnover during the fiscal year. As a result, this salary was not correctly allocated to the proper grant.
Effect: Claiming salaries that were not authorized in the grant budget may lead to costs that are disallowed under the grant agreement.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees that the salary expense for that one employee was not correctly allocated and has provided a corrective action plan. Prior to this finding, in April 2023, the Center had already implemented internal controls and processes regarding allocation of salaries to specific grants, which should prevent this this type of finding going forward.
Condition: Indirect costs, which encompass expenses incurred to support the overall operation of the organization but cannot be directly attributed to specific projects or grants, have not been recorded or allocated in accordance with federal grant regulations and the Uniform Guidance.
Criteria: 304.32 AU-C 725.07 indicates the auditor should perform the following procedures on the Schedule of Expenditures of Federal Awards (SEFA): Compare and reconcile the SEFA to underlying accounting and other records or to
the financial statements.
Cause: The failure to record and allocate indirect costs may have occurred due to inadequate training and high turnover of accounting staff during the 2022 calendar year.
Effect: Failure to record and allocate costs may lead to inaccurate financial statements, which can have regulatory and financial implications.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review of past financial statements to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees with the finding and provided a corrective action plan. Prior to this finding, in April of 2023, the Center had already implemented internal controls and processes governing allocation of indirect costs to specific grants, which should prevent this type of finding going forward.
Condition: Indirect costs, which encompass expenses incurred to support the overall operation of the organization but cannot be directly attributed to specific projects or grants, have not been recorded or allocated in accordance with federal grant regulations and the Uniform Guidance.
Criteria: 304.32 AU-C 725.07 indicates the auditor should perform the following procedures on the Schedule of Expenditures of Federal Awards (SEFA): Compare and reconcile the SEFA to underlying accounting and other records or to
the financial statements.
Cause: The failure to record and allocate indirect costs may have occurred due to inadequate training and high turnover of accounting staff during the 2022 calendar year.
Effect: Failure to record and allocate costs may lead to inaccurate financial statements, which can have regulatory and financial implications.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review of past financial statements to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees with the finding and provided a corrective action plan. Prior to this finding, in April of 2023, the Center had already implemented internal controls and processes governing allocation of indirect costs to specific grants, which should prevent this type of finding going forward.
Condition: Indirect costs, which encompass expenses incurred to support the overall operation of the organization but cannot be directly attributed to specific projects or grants, have not been recorded or allocated in accordance with federal grant regulations and the Uniform Guidance.
Criteria: 304.32 AU-C 725.07 indicates the auditor should perform the following procedures on the Schedule of Expenditures of Federal Awards (SEFA): Compare and reconcile the SEFA to underlying accounting and other records or to
the financial statements.
Cause: The failure to record and allocate indirect costs may have occurred due to inadequate training and high turnover of accounting staff during the 2022 calendar year.
Effect: Failure to record and allocate costs may lead to inaccurate financial statements, which can have regulatory and financial implications.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review of past financial statements to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees with the finding and provided a corrective action plan. Prior to this finding, in April of 2023, the Center had already implemented internal controls and processes governing allocation of indirect costs to specific grants, which should prevent this type of finding going forward.
Condition: Indirect costs, which encompass expenses incurred to support the overall operation of the organization but cannot be directly attributed to specific projects or grants, have not been recorded or allocated in accordance with federal grant regulations and the Uniform Guidance.
Criteria: 304.32 AU-C 725.07 indicates the auditor should perform the following procedures on the Schedule of Expenditures of Federal Awards (SEFA): Compare and reconcile the SEFA to underlying accounting and other records or to
the financial statements.
Cause: The failure to record and allocate indirect costs may have occurred due to inadequate training and high turnover of accounting staff during the 2022 calendar year.
Effect: Failure to record and allocate costs may lead to inaccurate financial statements, which can have regulatory and financial implications.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review of past financial statements to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees with the finding and provided a corrective action plan. Prior to this finding, in April of 2023, the Center had already implemented internal controls and processes governing allocation of indirect costs to specific grants, which should prevent this type of finding going forward.
Condition: Indirect costs, which encompass expenses incurred to support the overall operation of the organization but cannot be directly attributed to specific projects or grants, have not been recorded or allocated in accordance with federal grant regulations and the Uniform Guidance.
Criteria: 304.32 AU-C 725.07 indicates the auditor should perform the following procedures on the Schedule of Expenditures of Federal Awards (SEFA): Compare and reconcile the SEFA to underlying accounting and other records or to
the financial statements.
Cause: The failure to record and allocate indirect costs may have occurred due to inadequate training and high turnover of accounting staff during the 2022 calendar year.
Effect: Failure to record and allocate costs may lead to inaccurate financial statements, which can have regulatory and financial implications.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review of past financial statements to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees with the finding and provided a corrective action plan. Prior to this finding, in April of 2023, the Center had already implemented internal controls and processes governing allocation of indirect costs to specific grants, which should prevent this type of finding going forward.
Condition: The Center did not submit their financial statements to the Federal Audit Clearinghouse prior to the filing deadline.
Criteria: Entities subject to single audit requirements are required to submit their financial statements within nine months of the fiscal year end or thirty days of the audit report date (whichever is sooner) in accordance with 2 CFR part 200 subpart F.
Cause: The Center was not previously required to file with the Federal Audit Clearinghouse under 2 CFR part 200 subpart F §200.507(c)(1) because its prior grant expenditures did not exceed the $750,000 threshold. During the course of the Center’s annual audit, the determination was made that federal funds were spent in excess of $750,000. Upon this determination, the scope of the financial audit was expanded to ensure compliance with 2 CFR part 200 Subpart F. We concluded the single audit on November 10, 2023.
Effect: Submission was not made timely.
Recommendation: We recommend the Center closely monitor federal expenditures and ensure accurate reporting in the future to enable earlier determination if a filing with the Federal Audit Clearinghouse is required. In addition, we recommend starting the audit process in the spring to allow ample time to comply with the nine-month deadline.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees that the single audit report was not timely filed. As referenced above, the Center was previously under the $750,000 threshold for the single audit requirement, but completed and submitted the single audit report once the requirement was known. The Center has provided a corrective action plan to ensure timely filing going forward.
Condition: We identified salary expenses for one employee applied to one housing grant tested that were not authorized in the grant budget.
Criteria: As required by 2 CFR section 200.430, the Center must meet the following mandatory standards:
(1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an
unallowable activity and a direct or indirect cost activity.
Cause: The Center retained a third-party accounting firm to perform accounting functions in 2022, due to staff turnover during the fiscal year. As a result, this salary was not correctly allocated to the proper grant.
Effect: Claiming salaries that were not authorized in the grant budget may lead to costs that are disallowed under the grant agreement.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees that the salary expense for that one employee was not correctly allocated and has provided a corrective action plan. Prior to this finding, in April 2023, the Center had already implemented internal controls and processes regarding allocation of salaries to specific grants, which should prevent this this type of finding going forward.
Condition: Indirect costs, which encompass expenses incurred to support the overall operation of the organization but cannot be directly attributed to specific projects or grants, have not been recorded or allocated in accordance with federal grant regulations and the Uniform Guidance.
Criteria: 304.32 AU-C 725.07 indicates the auditor should perform the following procedures on the Schedule of Expenditures of Federal Awards (SEFA): Compare and reconcile the SEFA to underlying accounting and other records or to
the financial statements.
Cause: The failure to record and allocate indirect costs may have occurred due to inadequate training and high turnover of accounting staff during the 2022 calendar year.
Effect: Failure to record and allocate costs may lead to inaccurate financial statements, which can have regulatory and financial implications.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review of past financial statements to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees with the finding and provided a corrective action plan. Prior to this finding, in April of 2023, the Center had already implemented internal controls and processes governing allocation of indirect costs to specific grants, which should prevent this type of finding going forward.
Condition: Indirect costs, which encompass expenses incurred to support the overall operation of the organization but cannot be directly attributed to specific projects or grants, have not been recorded or allocated in accordance with federal grant regulations and the Uniform Guidance.
Criteria: 304.32 AU-C 725.07 indicates the auditor should perform the following procedures on the Schedule of Expenditures of Federal Awards (SEFA): Compare and reconcile the SEFA to underlying accounting and other records or to
the financial statements.
Cause: The failure to record and allocate indirect costs may have occurred due to inadequate training and high turnover of accounting staff during the 2022 calendar year.
Effect: Failure to record and allocate costs may lead to inaccurate financial statements, which can have regulatory and financial implications.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review of past financial statements to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees with the finding and provided a corrective action plan. Prior to this finding, in April of 2023, the Center had already implemented internal controls and processes governing allocation of indirect costs to specific grants, which should prevent this type of finding going forward.
Condition: Indirect costs, which encompass expenses incurred to support the overall operation of the organization but cannot be directly attributed to specific projects or grants, have not been recorded or allocated in accordance with federal grant regulations and the Uniform Guidance.
Criteria: 304.32 AU-C 725.07 indicates the auditor should perform the following procedures on the Schedule of Expenditures of Federal Awards (SEFA): Compare and reconcile the SEFA to underlying accounting and other records or to
the financial statements.
Cause: The failure to record and allocate indirect costs may have occurred due to inadequate training and high turnover of accounting staff during the 2022 calendar year.
Effect: Failure to record and allocate costs may lead to inaccurate financial statements, which can have regulatory and financial implications.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review of past financial statements to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees with the finding and provided a corrective action plan. Prior to this finding, in April of 2023, the Center had already implemented internal controls and processes governing allocation of indirect costs to specific grants, which should prevent this type of finding going forward.
Condition: Indirect costs, which encompass expenses incurred to support the overall operation of the organization but cannot be directly attributed to specific projects or grants, have not been recorded or allocated in accordance with federal grant regulations and the Uniform Guidance.
Criteria: 304.32 AU-C 725.07 indicates the auditor should perform the following procedures on the Schedule of Expenditures of Federal Awards (SEFA): Compare and reconcile the SEFA to underlying accounting and other records or to
the financial statements.
Cause: The failure to record and allocate indirect costs may have occurred due to inadequate training and high turnover of accounting staff during the 2022 calendar year.
Effect: Failure to record and allocate costs may lead to inaccurate financial statements, which can have regulatory and financial implications.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review of past financial statements to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees with the finding and provided a corrective action plan. Prior to this finding, in April of 2023, the Center had already implemented internal controls and processes governing allocation of indirect costs to specific grants, which should prevent this type of finding going forward.
Condition: Indirect costs, which encompass expenses incurred to support the overall operation of the organization but cannot be directly attributed to specific projects or grants, have not been recorded or allocated in accordance with federal grant regulations and the Uniform Guidance.
Criteria: 304.32 AU-C 725.07 indicates the auditor should perform the following procedures on the Schedule of Expenditures of Federal Awards (SEFA): Compare and reconcile the SEFA to underlying accounting and other records or to
the financial statements.
Cause: The failure to record and allocate indirect costs may have occurred due to inadequate training and high turnover of accounting staff during the 2022 calendar year.
Effect: Failure to record and allocate costs may lead to inaccurate financial statements, which can have regulatory and financial implications.
Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review of past financial statements to identify and correct any misallocations.
Views of Responsible Officials and Planned Corrective Actions: The Center agrees with the finding and provided a corrective action plan. Prior to this finding, in April of 2023, the Center had already implemented internal controls and processes governing allocation of indirect costs to specific grants, which should prevent this type of finding going forward.