Audit 337275

Finding 2023-003: Time Tracking and Payroll Allocations (Material Weakness) Information on the Federal Programs: Assistance Listing Number 98.001 Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430 “Compensation – personal services” requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, these records must comply with established accounting policies and practices of the non-Federal entity. Condition: As part of our audit procedures around payroll, we noted instances of payroll allocations to programs which did not accurately represent the time worked and/or salary rate of the employee. While misallocations were not significant in their amounts, the errors themselves suggest the need for more detailed review of the payroll allocation approval and entry process. Cause: The review of the payroll allocation entry and process was not sufficient to catch the errors. Context: The misallocations identified represent 5% of the sampled employees (2 out of 40). Although the majority of payroll allocations were supported by appropriate documentation, these two exceptions suggest a need for improved controls over time and effort reporting to prevent isolated errors from becoming more systemic issues. Effect: Astraea could inadvertently mischarge salaries and wages to its various programs. Questioned Costs: Undetermined. Identification as a Repeat Finding, if Applicable: Finding 2022-003 Recommendation: We recommend that the finance department perform a more detailed review of the monthly program allocations to ensure complete and accurate entry of payroll allocations.

Finding 2023-004: Subrecipient Management and Monitoring (Material Weakness) Information on the Federal Programs: Assistance Listing Number 98.001 Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Condition: Astraea has a subaward policy, which requires a risk assessment form be completed for each potential subrecipient. However, this step was not completed for all of the subrecipients in which Astraea engaged with during the fiscal year. Cause: Astraea did not adhere to its policy in regards to risk assessment procedures. Context: Astraea failed to perform risk assessment procedures. Our audit work in this area consisted of substantive testwork over a sample of subrecipient expenditures that were selected based on a defined threshold. We consider our sample to be representative of the populations, and thus, is a statistically valid sample. The issue is deemed to be systemic. Effect: Astraea could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight (i.e. monitoring) to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: Finding 2022-004 Recommendation: We recommend Astraea adhere to its current subaward policy and ensure the risk assessment procedures over all of its subrecipients are performed and documented prior to engagement. Based on these risk assessments, Astraea should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend Astraea require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately.

Finding 2023-005: Cash Management (Material Weakness) Information on the Federal Programs: Assistance Listing Number 98.001 Criteria: According to Uniform Guidance (2 CFR 200.305(b)), Federal funds must be managed in a way that minimizes the time elapsing between the transfer of funds and the Organization’s disbursement of those funds for program purposes. Additionally, internal controls over cash management should ensure that all drawdowns are approved by designated personnel to prevent improper or premature use of Federal funds. Condition: During our review of Federal grant drawdowns, it was noted that several drawdowns were processed without obtaining the required internal approvals as outlined in Astraea's cash management policies and procedures. Cause: Astraea’s cash management procedures were not consistently followed, leading to missed approvals for certain drawdowns. Effect: Drawdowns without proper internal approval increase the risk of non-compliance with Federal cash management requirements and could result in unauthorized or inaccurate fund usage. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: Finding 2022-007 Recommendation: Astraea should reinforce cash management controls by ensuring all Federal drawdowns obtain the appropriate internal approvals before processing. This can be achieved by implementing a checklist or automated workflow to verify compliance with approval requirements.

Finding 2023-003: Time Tracking and Payroll Allocations (Material Weakness) Information on the Federal Programs: Assistance Listing Number 98.001 Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430 “Compensation – personal services” requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, these records must comply with established accounting policies and practices of the non-Federal entity. Condition: As part of our audit procedures around payroll, we noted instances of payroll allocations to programs which did not accurately represent the time worked and/or salary rate of the employee. While misallocations were not significant in their amounts, the errors themselves suggest the need for more detailed review of the payroll allocation approval and entry process. Cause: The review of the payroll allocation entry and process was not sufficient to catch the errors. Context: The misallocations identified represent 5% of the sampled employees (2 out of 40). Although the majority of payroll allocations were supported by appropriate documentation, these two exceptions suggest a need for improved controls over time and effort reporting to prevent isolated errors from becoming more systemic issues. Effect: Astraea could inadvertently mischarge salaries and wages to its various programs. Questioned Costs: Undetermined. Identification as a Repeat Finding, if Applicable: Finding 2022-003 Recommendation: We recommend that the finance department perform a more detailed review of the monthly program allocations to ensure complete and accurate entry of payroll allocations.

Finding 2023-004: Subrecipient Management and Monitoring (Material Weakness) Information on the Federal Programs: Assistance Listing Number 98.001 Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Condition: Astraea has a subaward policy, which requires a risk assessment form be completed for each potential subrecipient. However, this step was not completed for all of the subrecipients in which Astraea engaged with during the fiscal year. Cause: Astraea did not adhere to its policy in regards to risk assessment procedures. Context: Astraea failed to perform risk assessment procedures. Our audit work in this area consisted of substantive testwork over a sample of subrecipient expenditures that were selected based on a defined threshold. We consider our sample to be representative of the populations, and thus, is a statistically valid sample. The issue is deemed to be systemic. Effect: Astraea could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight (i.e. monitoring) to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: Finding 2022-004 Recommendation: We recommend Astraea adhere to its current subaward policy and ensure the risk assessment procedures over all of its subrecipients are performed and documented prior to engagement. Based on these risk assessments, Astraea should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend Astraea require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately.

Finding 2023-005: Cash Management (Material Weakness) Information on the Federal Programs: Assistance Listing Number 98.001 Criteria: According to Uniform Guidance (2 CFR 200.305(b)), Federal funds must be managed in a way that minimizes the time elapsing between the transfer of funds and the Organization’s disbursement of those funds for program purposes. Additionally, internal controls over cash management should ensure that all drawdowns are approved by designated personnel to prevent improper or premature use of Federal funds. Condition: During our review of Federal grant drawdowns, it was noted that several drawdowns were processed without obtaining the required internal approvals as outlined in Astraea's cash management policies and procedures. Cause: Astraea’s cash management procedures were not consistently followed, leading to missed approvals for certain drawdowns. Effect: Drawdowns without proper internal approval increase the risk of non-compliance with Federal cash management requirements and could result in unauthorized or inaccurate fund usage. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: Finding 2022-007 Recommendation: Astraea should reinforce cash management controls by ensuring all Federal drawdowns obtain the appropriate internal approvals before processing. This can be achieved by implementing a checklist or automated workflow to verify compliance with approval requirements.