Audit 337399

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.

Finding 2023-005 Unallowable and Improperly Documented Direct Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 81 transactions were selected in a testing sample from a population of 315 direct expense transactions. Of the transactions tested, the auditors noted 15 instances of payments to contractors for work that were not sufficiently documented to support the allocatable work efforts performed on the grants in which they were charged. The auditors noted 4 instances where the costs charged to the federal grant were determined to not be reasonable, as they were either unallowable per Uniform Guidance, or were outside of the allowable costs approved in the federal award budgets. The auditors noted 1 instance of a transaction being claimed twice on different federal grants. The auditors also noted a significant lack of approvals for costs spent, as well as a failure to maintain adequate documentation, as noted in Finding 2023-003. Criteria: According to Uniform Guidance 2 CFR §200.402 - 405, costs charged to federal awards must be necessary, reasonable, consistent, allocable, and supported be adequate documentation. Federal requirements also mandate that expenditures align with the program budget and adhere to specific limitations on allowable costs. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim direct expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to determine that costs charged against federal grants are necessary, reasonable, consistent, allocable, and properly supported by adequate documentation significantly increases the risk that federal grants would be charged for expenses that did not occur, were not reasonably spent, or were charged against the wrong grant. These issues could lead to the misallocation of federal resources and the diminished impact on the program’s intended outcomes. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $17,959 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their procurement cycle that results in expenditures being properly reviewed and approved. Expenditures should only be approved by individuals with sufficient knowledge of allowable costs and should be familiar with Uniform Guidance and grant document requirements. Source documentation should clearly provide sufficient information to identify the scope of the expenses and to which grant the costs were charged against. The Organization should also better utilize its accounting database to ensure costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a formal procurement policy to ensure all contractor and vendor selections are based on program needs and comply with federal regulations. The procurement process will include clear criteria for vendor selection and justification, requirement to document scope of work, deliverables, and costs before engaging contractors, and verification of vendor eligibility against the Suspension and Debarment list.

Finding 2023-006 Unallowable and Improperly Documented Payroll Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 44 transactions were selected in a testing sample from a population of 243 direct payroll transactions. Of the transactions tested, the auditors noted 8 instances of payroll costs overclaimed by way of claiming the same work effort for the same period on multiple grants. The auditors noted 18 instances of failure to properly calculate and allocate the work effort completed by employees that worked on multiple grants and programs. The auditors noted 9 instances of the Organization failing to have approved pay rates on file that matched the amounts paid to the employees. The auditors also noted a significant lack of supervisory approval on timesheets or other time allocation support. Criteria: According to Uniform Guidance 2 CFR §200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records should be adequately documented, authorized, and supported by timesheets or other documentation approved by appropriate officials. These records should also reasonably reflect the total activity for which the employee is compensated, not exceeding 100 percent of compensated activities. The records should also 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. Further, proper internal controls should be in place to ensure compliance with federal requirements. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim payroll expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to specifically allocate the work performed for employees among specific grants, there is a significant risk that the Organization would charge work efforts against the wrong grants. Failure to have an appropriate system in place also increases the risk that the Organization would make duplicate claims for the same work effort. Failure to have supervisory approval over work effort could lead to claims of employee work that cannot be substantiated. Failure to have approved pay rates could lead to employees being paid more or less than owed, and federal programs being under or over claimed. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $32,393 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their accounting for payroll. All employees should complete timesheets or have up to date work effort allocations that clearly document their work efforts. These forms should be updated regularly and approved by appropriate supervisors. Employee pay rates should be documented and approved through offer letters and pay rate change forms. The Organization should evaluate the personnel involved with the payroll cycle and ensure that appropriate segregation of duties are in place, or other internal controls are implemented to ensure Organizational funds are properly safeguarded. The Organization should also better utilize its accounting database to ensure payroll costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will conduct mandatory training for all supervisors to reinforce the importance of accurate timesheet approval processes, proper time allocation for employees working on multiple grants or programs, and ensuring timely and consistent documentation of payroll expenditures. The Organization will ensure all approved pay rates are documented, signed, and filed for each employee. The Organization will configure QuickBooks to ensure payroll costs and grant allocations are clearly identifiable and traceable and linked to corresponding grants and federal claims.

Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-003 Lack of Documentation to Support Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to maintain financial records that properly substantiated expenditures which limited the ability to test several compliance requirements as part of audit procedures. These issues were most prevalent in testing direct disbursements. As part of audit procedures, 81 transactions were selected in a testing sample from a population which included 315 transactions. Of the 81 transactions tested, the Organization was unable to provide sufficient source documentation to support 21 of the transactions. Further, vendor and contract files were not consistently maintained and failed to provide adequate support to detail the history, method, and selection of procurement. Criteria: According to Uniform Guidance 2 CFR §200.302(b)(3), the Organization's financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Cause: The Organization failed to implement appropriate policies and procedures that would allow the administrative and accounting departments to obtain the necessary documentation to support incurred expenditures. The Organization also failed to implement an effective system of internal controls and processes that would require expenditure approvals which would improve the storage of appropriate documentation. Effect: The effect of not maintaining appropriate source documentation to support expenditures could result in federal funds being misused or inappropriately spent. Failure to obtain the appropriate documentation likely limits the Organization's ability to review and approve expenditures internally. The inability to submit receipts on cost reimbursement grants could lead to disallowed grant claims. Additionally, a lack of documentation prevents the Organization's funders or auditors to evaluate the expenditures and hold the organization accountable for their expenditures to ensure compliance. Consequences of these actions would lead to questioned costs that may require repayment to the funding source and potentially a loss of future funding. Questioned Costs: Known questioned costs of $27,358 were identified. " Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization's management develop and implement a robust document retention system for all elements of the financial reporting cycle. Documents should be stored in way that allows for them to be recalled upon request. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will collaborate with the CPA firm to develop a standardized process for recording and tracking gift card transactions and allotments, ensuring accountability and traceability. Develop and enforce a formal policy requiring comprehensive documentation (e.g., invoices, receipts, contracts) for all expenditures over a certain threshold (e.g., $500 or higher). This policy will include requirements for approval and justification prior to disbursement. Require all staff to complete requisition forms for supplies or purchases in advance of procurement. These forms will include itemized details, purpose of purchase, and approval signatures. The Organization will update processes to ensure vendor and contract files include critical details: procurement history, selection method, contract terms, and vendor agreements. These files will be consistently maintained and reviewed for completeness. The Organization will strengthen the credit card usage process to require staff to submit itemized receipts, purpose of purchase, and pre-approval for all credit card transactions. This will include monthly reconciliations and management review of all credit card statements. The Organization will implement periodic internal reviews to ensure compliance with the new documentation and procurement processes. The CPA firm will assist with quality checks and provide ongoing guidance.

Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.

Finding 2023-005 Unallowable and Improperly Documented Direct Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 81 transactions were selected in a testing sample from a population of 315 direct expense transactions. Of the transactions tested, the auditors noted 15 instances of payments to contractors for work that were not sufficiently documented to support the allocatable work efforts performed on the grants in which they were charged. The auditors noted 4 instances where the costs charged to the federal grant were determined to not be reasonable, as they were either unallowable per Uniform Guidance, or were outside of the allowable costs approved in the federal award budgets. The auditors noted 1 instance of a transaction being claimed twice on different federal grants. The auditors also noted a significant lack of approvals for costs spent, as well as a failure to maintain adequate documentation, as noted in Finding 2023-003. Criteria: According to Uniform Guidance 2 CFR §200.402 - 405, costs charged to federal awards must be necessary, reasonable, consistent, allocable, and supported be adequate documentation. Federal requirements also mandate that expenditures align with the program budget and adhere to specific limitations on allowable costs. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim direct expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to determine that costs charged against federal grants are necessary, reasonable, consistent, allocable, and properly supported by adequate documentation significantly increases the risk that federal grants would be charged for expenses that did not occur, were not reasonably spent, or were charged against the wrong grant. These issues could lead to the misallocation of federal resources and the diminished impact on the program’s intended outcomes. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $17,959 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their procurement cycle that results in expenditures being properly reviewed and approved. Expenditures should only be approved by individuals with sufficient knowledge of allowable costs and should be familiar with Uniform Guidance and grant document requirements. Source documentation should clearly provide sufficient information to identify the scope of the expenses and to which grant the costs were charged against. The Organization should also better utilize its accounting database to ensure costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a formal procurement policy to ensure all contractor and vendor selections are based on program needs and comply with federal regulations. The procurement process will include clear criteria for vendor selection and justification, requirement to document scope of work, deliverables, and costs before engaging contractors, and verification of vendor eligibility against the Suspension and Debarment list.

Finding 2023-006 Unallowable and Improperly Documented Payroll Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 44 transactions were selected in a testing sample from a population of 243 direct payroll transactions. Of the transactions tested, the auditors noted 8 instances of payroll costs overclaimed by way of claiming the same work effort for the same period on multiple grants. The auditors noted 18 instances of failure to properly calculate and allocate the work effort completed by employees that worked on multiple grants and programs. The auditors noted 9 instances of the Organization failing to have approved pay rates on file that matched the amounts paid to the employees. The auditors also noted a significant lack of supervisory approval on timesheets or other time allocation support. Criteria: According to Uniform Guidance 2 CFR §200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records should be adequately documented, authorized, and supported by timesheets or other documentation approved by appropriate officials. These records should also reasonably reflect the total activity for which the employee is compensated, not exceeding 100 percent of compensated activities. The records should also 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. Further, proper internal controls should be in place to ensure compliance with federal requirements. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim payroll expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to specifically allocate the work performed for employees among specific grants, there is a significant risk that the Organization would charge work efforts against the wrong grants. Failure to have an appropriate system in place also increases the risk that the Organization would make duplicate claims for the same work effort. Failure to have supervisory approval over work effort could lead to claims of employee work that cannot be substantiated. Failure to have approved pay rates could lead to employees being paid more or less than owed, and federal programs being under or over claimed. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $32,393 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their accounting for payroll. All employees should complete timesheets or have up to date work effort allocations that clearly document their work efforts. These forms should be updated regularly and approved by appropriate supervisors. Employee pay rates should be documented and approved through offer letters and pay rate change forms. The Organization should evaluate the personnel involved with the payroll cycle and ensure that appropriate segregation of duties are in place, or other internal controls are implemented to ensure Organizational funds are properly safeguarded. The Organization should also better utilize its accounting database to ensure payroll costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will conduct mandatory training for all supervisors to reinforce the importance of accurate timesheet approval processes, proper time allocation for employees working on multiple grants or programs, and ensuring timely and consistent documentation of payroll expenditures. The Organization will ensure all approved pay rates are documented, signed, and filed for each employee. The Organization will configure QuickBooks to ensure payroll costs and grant allocations are clearly identifiable and traceable and linked to corresponding grants and federal claims.

Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-003 Lack of Documentation to Support Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to maintain financial records that properly substantiated expenditures which limited the ability to test several compliance requirements as part of audit procedures. These issues were most prevalent in testing direct disbursements. As part of audit procedures, 81 transactions were selected in a testing sample from a population which included 315 transactions. Of the 81 transactions tested, the Organization was unable to provide sufficient source documentation to support 21 of the transactions. Further, vendor and contract files were not consistently maintained and failed to provide adequate support to detail the history, method, and selection of procurement. Criteria: According to Uniform Guidance 2 CFR §200.302(b)(3), the Organization's financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Cause: The Organization failed to implement appropriate policies and procedures that would allow the administrative and accounting departments to obtain the necessary documentation to support incurred expenditures. The Organization also failed to implement an effective system of internal controls and processes that would require expenditure approvals which would improve the storage of appropriate documentation. Effect: The effect of not maintaining appropriate source documentation to support expenditures could result in federal funds being misused or inappropriately spent. Failure to obtain the appropriate documentation likely limits the Organization's ability to review and approve expenditures internally. The inability to submit receipts on cost reimbursement grants could lead to disallowed grant claims. Additionally, a lack of documentation prevents the Organization's funders or auditors to evaluate the expenditures and hold the organization accountable for their expenditures to ensure compliance. Consequences of these actions would lead to questioned costs that may require repayment to the funding source and potentially a loss of future funding. Questioned Costs: Known questioned costs of $27,358 were identified. " Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization's management develop and implement a robust document retention system for all elements of the financial reporting cycle. Documents should be stored in way that allows for them to be recalled upon request. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will collaborate with the CPA firm to develop a standardized process for recording and tracking gift card transactions and allotments, ensuring accountability and traceability. Develop and enforce a formal policy requiring comprehensive documentation (e.g., invoices, receipts, contracts) for all expenditures over a certain threshold (e.g., $500 or higher). This policy will include requirements for approval and justification prior to disbursement. Require all staff to complete requisition forms for supplies or purchases in advance of procurement. These forms will include itemized details, purpose of purchase, and approval signatures. The Organization will update processes to ensure vendor and contract files include critical details: procurement history, selection method, contract terms, and vendor agreements. These files will be consistently maintained and reviewed for completeness. The Organization will strengthen the credit card usage process to require staff to submit itemized receipts, purpose of purchase, and pre-approval for all credit card transactions. This will include monthly reconciliations and management review of all credit card statements. The Organization will implement periodic internal reviews to ensure compliance with the new documentation and procurement processes. The CPA firm will assist with quality checks and provide ongoing guidance.

Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.

Finding 2023-005 Unallowable and Improperly Documented Direct Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 81 transactions were selected in a testing sample from a population of 315 direct expense transactions. Of the transactions tested, the auditors noted 15 instances of payments to contractors for work that were not sufficiently documented to support the allocatable work efforts performed on the grants in which they were charged. The auditors noted 4 instances where the costs charged to the federal grant were determined to not be reasonable, as they were either unallowable per Uniform Guidance, or were outside of the allowable costs approved in the federal award budgets. The auditors noted 1 instance of a transaction being claimed twice on different federal grants. The auditors also noted a significant lack of approvals for costs spent, as well as a failure to maintain adequate documentation, as noted in Finding 2023-003. Criteria: According to Uniform Guidance 2 CFR §200.402 - 405, costs charged to federal awards must be necessary, reasonable, consistent, allocable, and supported be adequate documentation. Federal requirements also mandate that expenditures align with the program budget and adhere to specific limitations on allowable costs. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim direct expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to determine that costs charged against federal grants are necessary, reasonable, consistent, allocable, and properly supported by adequate documentation significantly increases the risk that federal grants would be charged for expenses that did not occur, were not reasonably spent, or were charged against the wrong grant. These issues could lead to the misallocation of federal resources and the diminished impact on the program’s intended outcomes. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $17,959 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their procurement cycle that results in expenditures being properly reviewed and approved. Expenditures should only be approved by individuals with sufficient knowledge of allowable costs and should be familiar with Uniform Guidance and grant document requirements. Source documentation should clearly provide sufficient information to identify the scope of the expenses and to which grant the costs were charged against. The Organization should also better utilize its accounting database to ensure costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a formal procurement policy to ensure all contractor and vendor selections are based on program needs and comply with federal regulations. The procurement process will include clear criteria for vendor selection and justification, requirement to document scope of work, deliverables, and costs before engaging contractors, and verification of vendor eligibility against the Suspension and Debarment list.

Finding 2023-006 Unallowable and Improperly Documented Payroll Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 44 transactions were selected in a testing sample from a population of 243 direct payroll transactions. Of the transactions tested, the auditors noted 8 instances of payroll costs overclaimed by way of claiming the same work effort for the same period on multiple grants. The auditors noted 18 instances of failure to properly calculate and allocate the work effort completed by employees that worked on multiple grants and programs. The auditors noted 9 instances of the Organization failing to have approved pay rates on file that matched the amounts paid to the employees. The auditors also noted a significant lack of supervisory approval on timesheets or other time allocation support. Criteria: According to Uniform Guidance 2 CFR §200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records should be adequately documented, authorized, and supported by timesheets or other documentation approved by appropriate officials. These records should also reasonably reflect the total activity for which the employee is compensated, not exceeding 100 percent of compensated activities. The records should also 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. Further, proper internal controls should be in place to ensure compliance with federal requirements. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim payroll expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to specifically allocate the work performed for employees among specific grants, there is a significant risk that the Organization would charge work efforts against the wrong grants. Failure to have an appropriate system in place also increases the risk that the Organization would make duplicate claims for the same work effort. Failure to have supervisory approval over work effort could lead to claims of employee work that cannot be substantiated. Failure to have approved pay rates could lead to employees being paid more or less than owed, and federal programs being under or over claimed. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $32,393 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their accounting for payroll. All employees should complete timesheets or have up to date work effort allocations that clearly document their work efforts. These forms should be updated regularly and approved by appropriate supervisors. Employee pay rates should be documented and approved through offer letters and pay rate change forms. The Organization should evaluate the personnel involved with the payroll cycle and ensure that appropriate segregation of duties are in place, or other internal controls are implemented to ensure Organizational funds are properly safeguarded. The Organization should also better utilize its accounting database to ensure payroll costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will conduct mandatory training for all supervisors to reinforce the importance of accurate timesheet approval processes, proper time allocation for employees working on multiple grants or programs, and ensuring timely and consistent documentation of payroll expenditures. The Organization will ensure all approved pay rates are documented, signed, and filed for each employee. The Organization will configure QuickBooks to ensure payroll costs and grant allocations are clearly identifiable and traceable and linked to corresponding grants and federal claims.

Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-003 Lack of Documentation to Support Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to maintain financial records that properly substantiated expenditures which limited the ability to test several compliance requirements as part of audit procedures. These issues were most prevalent in testing direct disbursements. As part of audit procedures, 81 transactions were selected in a testing sample from a population which included 315 transactions. Of the 81 transactions tested, the Organization was unable to provide sufficient source documentation to support 21 of the transactions. Further, vendor and contract files were not consistently maintained and failed to provide adequate support to detail the history, method, and selection of procurement. Criteria: According to Uniform Guidance 2 CFR §200.302(b)(3), the Organization's financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Cause: The Organization failed to implement appropriate policies and procedures that would allow the administrative and accounting departments to obtain the necessary documentation to support incurred expenditures. The Organization also failed to implement an effective system of internal controls and processes that would require expenditure approvals which would improve the storage of appropriate documentation. Effect: The effect of not maintaining appropriate source documentation to support expenditures could result in federal funds being misused or inappropriately spent. Failure to obtain the appropriate documentation likely limits the Organization's ability to review and approve expenditures internally. The inability to submit receipts on cost reimbursement grants could lead to disallowed grant claims. Additionally, a lack of documentation prevents the Organization's funders or auditors to evaluate the expenditures and hold the organization accountable for their expenditures to ensure compliance. Consequences of these actions would lead to questioned costs that may require repayment to the funding source and potentially a loss of future funding. Questioned Costs: Known questioned costs of $27,358 were identified. " Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization's management develop and implement a robust document retention system for all elements of the financial reporting cycle. Documents should be stored in way that allows for them to be recalled upon request. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will collaborate with the CPA firm to develop a standardized process for recording and tracking gift card transactions and allotments, ensuring accountability and traceability. Develop and enforce a formal policy requiring comprehensive documentation (e.g., invoices, receipts, contracts) for all expenditures over a certain threshold (e.g., $500 or higher). This policy will include requirements for approval and justification prior to disbursement. Require all staff to complete requisition forms for supplies or purchases in advance of procurement. These forms will include itemized details, purpose of purchase, and approval signatures. The Organization will update processes to ensure vendor and contract files include critical details: procurement history, selection method, contract terms, and vendor agreements. These files will be consistently maintained and reviewed for completeness. The Organization will strengthen the credit card usage process to require staff to submit itemized receipts, purpose of purchase, and pre-approval for all credit card transactions. This will include monthly reconciliations and management review of all credit card statements. The Organization will implement periodic internal reviews to ensure compliance with the new documentation and procurement processes. The CPA firm will assist with quality checks and provide ongoing guidance.

Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.

Finding 2023-005 Unallowable and Improperly Documented Direct Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 81 transactions were selected in a testing sample from a population of 315 direct expense transactions. Of the transactions tested, the auditors noted 15 instances of payments to contractors for work that were not sufficiently documented to support the allocatable work efforts performed on the grants in which they were charged. The auditors noted 4 instances where the costs charged to the federal grant were determined to not be reasonable, as they were either unallowable per Uniform Guidance, or were outside of the allowable costs approved in the federal award budgets. The auditors noted 1 instance of a transaction being claimed twice on different federal grants. The auditors also noted a significant lack of approvals for costs spent, as well as a failure to maintain adequate documentation, as noted in Finding 2023-003. Criteria: According to Uniform Guidance 2 CFR §200.402 - 405, costs charged to federal awards must be necessary, reasonable, consistent, allocable, and supported be adequate documentation. Federal requirements also mandate that expenditures align with the program budget and adhere to specific limitations on allowable costs. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim direct expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to determine that costs charged against federal grants are necessary, reasonable, consistent, allocable, and properly supported by adequate documentation significantly increases the risk that federal grants would be charged for expenses that did not occur, were not reasonably spent, or were charged against the wrong grant. These issues could lead to the misallocation of federal resources and the diminished impact on the program’s intended outcomes. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $17,959 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their procurement cycle that results in expenditures being properly reviewed and approved. Expenditures should only be approved by individuals with sufficient knowledge of allowable costs and should be familiar with Uniform Guidance and grant document requirements. Source documentation should clearly provide sufficient information to identify the scope of the expenses and to which grant the costs were charged against. The Organization should also better utilize its accounting database to ensure costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a formal procurement policy to ensure all contractor and vendor selections are based on program needs and comply with federal regulations. The procurement process will include clear criteria for vendor selection and justification, requirement to document scope of work, deliverables, and costs before engaging contractors, and verification of vendor eligibility against the Suspension and Debarment list.

Finding 2023-006 Unallowable and Improperly Documented Payroll Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 44 transactions were selected in a testing sample from a population of 243 direct payroll transactions. Of the transactions tested, the auditors noted 8 instances of payroll costs overclaimed by way of claiming the same work effort for the same period on multiple grants. The auditors noted 18 instances of failure to properly calculate and allocate the work effort completed by employees that worked on multiple grants and programs. The auditors noted 9 instances of the Organization failing to have approved pay rates on file that matched the amounts paid to the employees. The auditors also noted a significant lack of supervisory approval on timesheets or other time allocation support. Criteria: According to Uniform Guidance 2 CFR §200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records should be adequately documented, authorized, and supported by timesheets or other documentation approved by appropriate officials. These records should also reasonably reflect the total activity for which the employee is compensated, not exceeding 100 percent of compensated activities. The records should also 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. Further, proper internal controls should be in place to ensure compliance with federal requirements. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim payroll expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to specifically allocate the work performed for employees among specific grants, there is a significant risk that the Organization would charge work efforts against the wrong grants. Failure to have an appropriate system in place also increases the risk that the Organization would make duplicate claims for the same work effort. Failure to have supervisory approval over work effort could lead to claims of employee work that cannot be substantiated. Failure to have approved pay rates could lead to employees being paid more or less than owed, and federal programs being under or over claimed. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $32,393 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their accounting for payroll. All employees should complete timesheets or have up to date work effort allocations that clearly document their work efforts. These forms should be updated regularly and approved by appropriate supervisors. Employee pay rates should be documented and approved through offer letters and pay rate change forms. The Organization should evaluate the personnel involved with the payroll cycle and ensure that appropriate segregation of duties are in place, or other internal controls are implemented to ensure Organizational funds are properly safeguarded. The Organization should also better utilize its accounting database to ensure payroll costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will conduct mandatory training for all supervisors to reinforce the importance of accurate timesheet approval processes, proper time allocation for employees working on multiple grants or programs, and ensuring timely and consistent documentation of payroll expenditures. The Organization will ensure all approved pay rates are documented, signed, and filed for each employee. The Organization will configure QuickBooks to ensure payroll costs and grant allocations are clearly identifiable and traceable and linked to corresponding grants and federal claims.

Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-003 Lack of Documentation to Support Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to maintain financial records that properly substantiated expenditures which limited the ability to test several compliance requirements as part of audit procedures. These issues were most prevalent in testing direct disbursements. As part of audit procedures, 81 transactions were selected in a testing sample from a population which included 315 transactions. Of the 81 transactions tested, the Organization was unable to provide sufficient source documentation to support 21 of the transactions. Further, vendor and contract files were not consistently maintained and failed to provide adequate support to detail the history, method, and selection of procurement. Criteria: According to Uniform Guidance 2 CFR §200.302(b)(3), the Organization's financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Cause: The Organization failed to implement appropriate policies and procedures that would allow the administrative and accounting departments to obtain the necessary documentation to support incurred expenditures. The Organization also failed to implement an effective system of internal controls and processes that would require expenditure approvals which would improve the storage of appropriate documentation. Effect: The effect of not maintaining appropriate source documentation to support expenditures could result in federal funds being misused or inappropriately spent. Failure to obtain the appropriate documentation likely limits the Organization's ability to review and approve expenditures internally. The inability to submit receipts on cost reimbursement grants could lead to disallowed grant claims. Additionally, a lack of documentation prevents the Organization's funders or auditors to evaluate the expenditures and hold the organization accountable for their expenditures to ensure compliance. Consequences of these actions would lead to questioned costs that may require repayment to the funding source and potentially a loss of future funding. Questioned Costs: Known questioned costs of $27,358 were identified. " Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization's management develop and implement a robust document retention system for all elements of the financial reporting cycle. Documents should be stored in way that allows for them to be recalled upon request. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will collaborate with the CPA firm to develop a standardized process for recording and tracking gift card transactions and allotments, ensuring accountability and traceability. Develop and enforce a formal policy requiring comprehensive documentation (e.g., invoices, receipts, contracts) for all expenditures over a certain threshold (e.g., $500 or higher). This policy will include requirements for approval and justification prior to disbursement. Require all staff to complete requisition forms for supplies or purchases in advance of procurement. These forms will include itemized details, purpose of purchase, and approval signatures. The Organization will update processes to ensure vendor and contract files include critical details: procurement history, selection method, contract terms, and vendor agreements. These files will be consistently maintained and reviewed for completeness. The Organization will strengthen the credit card usage process to require staff to submit itemized receipts, purpose of purchase, and pre-approval for all credit card transactions. This will include monthly reconciliations and management review of all credit card statements. The Organization will implement periodic internal reviews to ensure compliance with the new documentation and procurement processes. The CPA firm will assist with quality checks and provide ongoing guidance.

Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.

Finding 2023-005 Unallowable and Improperly Documented Direct Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 81 transactions were selected in a testing sample from a population of 315 direct expense transactions. Of the transactions tested, the auditors noted 15 instances of payments to contractors for work that were not sufficiently documented to support the allocatable work efforts performed on the grants in which they were charged. The auditors noted 4 instances where the costs charged to the federal grant were determined to not be reasonable, as they were either unallowable per Uniform Guidance, or were outside of the allowable costs approved in the federal award budgets. The auditors noted 1 instance of a transaction being claimed twice on different federal grants. The auditors also noted a significant lack of approvals for costs spent, as well as a failure to maintain adequate documentation, as noted in Finding 2023-003. Criteria: According to Uniform Guidance 2 CFR §200.402 - 405, costs charged to federal awards must be necessary, reasonable, consistent, allocable, and supported be adequate documentation. Federal requirements also mandate that expenditures align with the program budget and adhere to specific limitations on allowable costs. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim direct expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to determine that costs charged against federal grants are necessary, reasonable, consistent, allocable, and properly supported by adequate documentation significantly increases the risk that federal grants would be charged for expenses that did not occur, were not reasonably spent, or were charged against the wrong grant. These issues could lead to the misallocation of federal resources and the diminished impact on the program’s intended outcomes. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $17,959 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their procurement cycle that results in expenditures being properly reviewed and approved. Expenditures should only be approved by individuals with sufficient knowledge of allowable costs and should be familiar with Uniform Guidance and grant document requirements. Source documentation should clearly provide sufficient information to identify the scope of the expenses and to which grant the costs were charged against. The Organization should also better utilize its accounting database to ensure costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a formal procurement policy to ensure all contractor and vendor selections are based on program needs and comply with federal regulations. The procurement process will include clear criteria for vendor selection and justification, requirement to document scope of work, deliverables, and costs before engaging contractors, and verification of vendor eligibility against the Suspension and Debarment list.

Finding 2023-006 Unallowable and Improperly Documented Payroll Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 44 transactions were selected in a testing sample from a population of 243 direct payroll transactions. Of the transactions tested, the auditors noted 8 instances of payroll costs overclaimed by way of claiming the same work effort for the same period on multiple grants. The auditors noted 18 instances of failure to properly calculate and allocate the work effort completed by employees that worked on multiple grants and programs. The auditors noted 9 instances of the Organization failing to have approved pay rates on file that matched the amounts paid to the employees. The auditors also noted a significant lack of supervisory approval on timesheets or other time allocation support. Criteria: According to Uniform Guidance 2 CFR §200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records should be adequately documented, authorized, and supported by timesheets or other documentation approved by appropriate officials. These records should also reasonably reflect the total activity for which the employee is compensated, not exceeding 100 percent of compensated activities. The records should also 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. Further, proper internal controls should be in place to ensure compliance with federal requirements. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim payroll expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to specifically allocate the work performed for employees among specific grants, there is a significant risk that the Organization would charge work efforts against the wrong grants. Failure to have an appropriate system in place also increases the risk that the Organization would make duplicate claims for the same work effort. Failure to have supervisory approval over work effort could lead to claims of employee work that cannot be substantiated. Failure to have approved pay rates could lead to employees being paid more or less than owed, and federal programs being under or over claimed. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $32,393 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their accounting for payroll. All employees should complete timesheets or have up to date work effort allocations that clearly document their work efforts. These forms should be updated regularly and approved by appropriate supervisors. Employee pay rates should be documented and approved through offer letters and pay rate change forms. The Organization should evaluate the personnel involved with the payroll cycle and ensure that appropriate segregation of duties are in place, or other internal controls are implemented to ensure Organizational funds are properly safeguarded. The Organization should also better utilize its accounting database to ensure payroll costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will conduct mandatory training for all supervisors to reinforce the importance of accurate timesheet approval processes, proper time allocation for employees working on multiple grants or programs, and ensuring timely and consistent documentation of payroll expenditures. The Organization will ensure all approved pay rates are documented, signed, and filed for each employee. The Organization will configure QuickBooks to ensure payroll costs and grant allocations are clearly identifiable and traceable and linked to corresponding grants and federal claims.

Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.

Finding 2023-005 Unallowable and Improperly Documented Direct Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 81 transactions were selected in a testing sample from a population of 315 direct expense transactions. Of the transactions tested, the auditors noted 15 instances of payments to contractors for work that were not sufficiently documented to support the allocatable work efforts performed on the grants in which they were charged. The auditors noted 4 instances where the costs charged to the federal grant were determined to not be reasonable, as they were either unallowable per Uniform Guidance, or were outside of the allowable costs approved in the federal award budgets. The auditors noted 1 instance of a transaction being claimed twice on different federal grants. The auditors also noted a significant lack of approvals for costs spent, as well as a failure to maintain adequate documentation, as noted in Finding 2023-003. Criteria: According to Uniform Guidance 2 CFR §200.402 - 405, costs charged to federal awards must be necessary, reasonable, consistent, allocable, and supported be adequate documentation. Federal requirements also mandate that expenditures align with the program budget and adhere to specific limitations on allowable costs. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim direct expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to determine that costs charged against federal grants are necessary, reasonable, consistent, allocable, and properly supported by adequate documentation significantly increases the risk that federal grants would be charged for expenses that did not occur, were not reasonably spent, or were charged against the wrong grant. These issues could lead to the misallocation of federal resources and the diminished impact on the program’s intended outcomes. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $17,959 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their procurement cycle that results in expenditures being properly reviewed and approved. Expenditures should only be approved by individuals with sufficient knowledge of allowable costs and should be familiar with Uniform Guidance and grant document requirements. Source documentation should clearly provide sufficient information to identify the scope of the expenses and to which grant the costs were charged against. The Organization should also better utilize its accounting database to ensure costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a formal procurement policy to ensure all contractor and vendor selections are based on program needs and comply with federal regulations. The procurement process will include clear criteria for vendor selection and justification, requirement to document scope of work, deliverables, and costs before engaging contractors, and verification of vendor eligibility against the Suspension and Debarment list.

Finding 2023-006 Unallowable and Improperly Documented Payroll Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 44 transactions were selected in a testing sample from a population of 243 direct payroll transactions. Of the transactions tested, the auditors noted 8 instances of payroll costs overclaimed by way of claiming the same work effort for the same period on multiple grants. The auditors noted 18 instances of failure to properly calculate and allocate the work effort completed by employees that worked on multiple grants and programs. The auditors noted 9 instances of the Organization failing to have approved pay rates on file that matched the amounts paid to the employees. The auditors also noted a significant lack of supervisory approval on timesheets or other time allocation support. Criteria: According to Uniform Guidance 2 CFR §200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records should be adequately documented, authorized, and supported by timesheets or other documentation approved by appropriate officials. These records should also reasonably reflect the total activity for which the employee is compensated, not exceeding 100 percent of compensated activities. The records should also 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. Further, proper internal controls should be in place to ensure compliance with federal requirements. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim payroll expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to specifically allocate the work performed for employees among specific grants, there is a significant risk that the Organization would charge work efforts against the wrong grants. Failure to have an appropriate system in place also increases the risk that the Organization would make duplicate claims for the same work effort. Failure to have supervisory approval over work effort could lead to claims of employee work that cannot be substantiated. Failure to have approved pay rates could lead to employees being paid more or less than owed, and federal programs being under or over claimed. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $32,393 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their accounting for payroll. All employees should complete timesheets or have up to date work effort allocations that clearly document their work efforts. These forms should be updated regularly and approved by appropriate supervisors. Employee pay rates should be documented and approved through offer letters and pay rate change forms. The Organization should evaluate the personnel involved with the payroll cycle and ensure that appropriate segregation of duties are in place, or other internal controls are implemented to ensure Organizational funds are properly safeguarded. The Organization should also better utilize its accounting database to ensure payroll costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will conduct mandatory training for all supervisors to reinforce the importance of accurate timesheet approval processes, proper time allocation for employees working on multiple grants or programs, and ensuring timely and consistent documentation of payroll expenditures. The Organization will ensure all approved pay rates are documented, signed, and filed for each employee. The Organization will configure QuickBooks to ensure payroll costs and grant allocations are clearly identifiable and traceable and linked to corresponding grants and federal claims.

Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-003 Lack of Documentation to Support Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to maintain financial records that properly substantiated expenditures which limited the ability to test several compliance requirements as part of audit procedures. These issues were most prevalent in testing direct disbursements. As part of audit procedures, 81 transactions were selected in a testing sample from a population which included 315 transactions. Of the 81 transactions tested, the Organization was unable to provide sufficient source documentation to support 21 of the transactions. Further, vendor and contract files were not consistently maintained and failed to provide adequate support to detail the history, method, and selection of procurement. Criteria: According to Uniform Guidance 2 CFR §200.302(b)(3), the Organization's financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Cause: The Organization failed to implement appropriate policies and procedures that would allow the administrative and accounting departments to obtain the necessary documentation to support incurred expenditures. The Organization also failed to implement an effective system of internal controls and processes that would require expenditure approvals which would improve the storage of appropriate documentation. Effect: The effect of not maintaining appropriate source documentation to support expenditures could result in federal funds being misused or inappropriately spent. Failure to obtain the appropriate documentation likely limits the Organization's ability to review and approve expenditures internally. The inability to submit receipts on cost reimbursement grants could lead to disallowed grant claims. Additionally, a lack of documentation prevents the Organization's funders or auditors to evaluate the expenditures and hold the organization accountable for their expenditures to ensure compliance. Consequences of these actions would lead to questioned costs that may require repayment to the funding source and potentially a loss of future funding. Questioned Costs: Known questioned costs of $27,358 were identified. " Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization's management develop and implement a robust document retention system for all elements of the financial reporting cycle. Documents should be stored in way that allows for them to be recalled upon request. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will collaborate with the CPA firm to develop a standardized process for recording and tracking gift card transactions and allotments, ensuring accountability and traceability. Develop and enforce a formal policy requiring comprehensive documentation (e.g., invoices, receipts, contracts) for all expenditures over a certain threshold (e.g., $500 or higher). This policy will include requirements for approval and justification prior to disbursement. Require all staff to complete requisition forms for supplies or purchases in advance of procurement. These forms will include itemized details, purpose of purchase, and approval signatures. The Organization will update processes to ensure vendor and contract files include critical details: procurement history, selection method, contract terms, and vendor agreements. These files will be consistently maintained and reviewed for completeness. The Organization will strengthen the credit card usage process to require staff to submit itemized receipts, purpose of purchase, and pre-approval for all credit card transactions. This will include monthly reconciliations and management review of all credit card statements. The Organization will implement periodic internal reviews to ensure compliance with the new documentation and procurement processes. The CPA firm will assist with quality checks and provide ongoing guidance.

Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.

Finding 2023-005 Unallowable and Improperly Documented Direct Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 81 transactions were selected in a testing sample from a population of 315 direct expense transactions. Of the transactions tested, the auditors noted 15 instances of payments to contractors for work that were not sufficiently documented to support the allocatable work efforts performed on the grants in which they were charged. The auditors noted 4 instances where the costs charged to the federal grant were determined to not be reasonable, as they were either unallowable per Uniform Guidance, or were outside of the allowable costs approved in the federal award budgets. The auditors noted 1 instance of a transaction being claimed twice on different federal grants. The auditors also noted a significant lack of approvals for costs spent, as well as a failure to maintain adequate documentation, as noted in Finding 2023-003. Criteria: According to Uniform Guidance 2 CFR §200.402 - 405, costs charged to federal awards must be necessary, reasonable, consistent, allocable, and supported be adequate documentation. Federal requirements also mandate that expenditures align with the program budget and adhere to specific limitations on allowable costs. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim direct expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to determine that costs charged against federal grants are necessary, reasonable, consistent, allocable, and properly supported by adequate documentation significantly increases the risk that federal grants would be charged for expenses that did not occur, were not reasonably spent, or were charged against the wrong grant. These issues could lead to the misallocation of federal resources and the diminished impact on the program’s intended outcomes. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $17,959 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their procurement cycle that results in expenditures being properly reviewed and approved. Expenditures should only be approved by individuals with sufficient knowledge of allowable costs and should be familiar with Uniform Guidance and grant document requirements. Source documentation should clearly provide sufficient information to identify the scope of the expenses and to which grant the costs were charged against. The Organization should also better utilize its accounting database to ensure costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a formal procurement policy to ensure all contractor and vendor selections are based on program needs and comply with federal regulations. The procurement process will include clear criteria for vendor selection and justification, requirement to document scope of work, deliverables, and costs before engaging contractors, and verification of vendor eligibility against the Suspension and Debarment list.

Finding 2023-006 Unallowable and Improperly Documented Payroll Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 44 transactions were selected in a testing sample from a population of 243 direct payroll transactions. Of the transactions tested, the auditors noted 8 instances of payroll costs overclaimed by way of claiming the same work effort for the same period on multiple grants. The auditors noted 18 instances of failure to properly calculate and allocate the work effort completed by employees that worked on multiple grants and programs. The auditors noted 9 instances of the Organization failing to have approved pay rates on file that matched the amounts paid to the employees. The auditors also noted a significant lack of supervisory approval on timesheets or other time allocation support. Criteria: According to Uniform Guidance 2 CFR §200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records should be adequately documented, authorized, and supported by timesheets or other documentation approved by appropriate officials. These records should also reasonably reflect the total activity for which the employee is compensated, not exceeding 100 percent of compensated activities. The records should also 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. Further, proper internal controls should be in place to ensure compliance with federal requirements. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim payroll expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to specifically allocate the work performed for employees among specific grants, there is a significant risk that the Organization would charge work efforts against the wrong grants. Failure to have an appropriate system in place also increases the risk that the Organization would make duplicate claims for the same work effort. Failure to have supervisory approval over work effort could lead to claims of employee work that cannot be substantiated. Failure to have approved pay rates could lead to employees being paid more or less than owed, and federal programs being under or over claimed. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $32,393 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their accounting for payroll. All employees should complete timesheets or have up to date work effort allocations that clearly document their work efforts. These forms should be updated regularly and approved by appropriate supervisors. Employee pay rates should be documented and approved through offer letters and pay rate change forms. The Organization should evaluate the personnel involved with the payroll cycle and ensure that appropriate segregation of duties are in place, or other internal controls are implemented to ensure Organizational funds are properly safeguarded. The Organization should also better utilize its accounting database to ensure payroll costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will conduct mandatory training for all supervisors to reinforce the importance of accurate timesheet approval processes, proper time allocation for employees working on multiple grants or programs, and ensuring timely and consistent documentation of payroll expenditures. The Organization will ensure all approved pay rates are documented, signed, and filed for each employee. The Organization will configure QuickBooks to ensure payroll costs and grant allocations are clearly identifiable and traceable and linked to corresponding grants and federal claims.

Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-003 Lack of Documentation to Support Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to maintain financial records that properly substantiated expenditures which limited the ability to test several compliance requirements as part of audit procedures. These issues were most prevalent in testing direct disbursements. As part of audit procedures, 81 transactions were selected in a testing sample from a population which included 315 transactions. Of the 81 transactions tested, the Organization was unable to provide sufficient source documentation to support 21 of the transactions. Further, vendor and contract files were not consistently maintained and failed to provide adequate support to detail the history, method, and selection of procurement. Criteria: According to Uniform Guidance 2 CFR §200.302(b)(3), the Organization's financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Cause: The Organization failed to implement appropriate policies and procedures that would allow the administrative and accounting departments to obtain the necessary documentation to support incurred expenditures. The Organization also failed to implement an effective system of internal controls and processes that would require expenditure approvals which would improve the storage of appropriate documentation. Effect: The effect of not maintaining appropriate source documentation to support expenditures could result in federal funds being misused or inappropriately spent. Failure to obtain the appropriate documentation likely limits the Organization's ability to review and approve expenditures internally. The inability to submit receipts on cost reimbursement grants could lead to disallowed grant claims. Additionally, a lack of documentation prevents the Organization's funders or auditors to evaluate the expenditures and hold the organization accountable for their expenditures to ensure compliance. Consequences of these actions would lead to questioned costs that may require repayment to the funding source and potentially a loss of future funding. Questioned Costs: Known questioned costs of $27,358 were identified. " Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization's management develop and implement a robust document retention system for all elements of the financial reporting cycle. Documents should be stored in way that allows for them to be recalled upon request. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will collaborate with the CPA firm to develop a standardized process for recording and tracking gift card transactions and allotments, ensuring accountability and traceability. Develop and enforce a formal policy requiring comprehensive documentation (e.g., invoices, receipts, contracts) for all expenditures over a certain threshold (e.g., $500 or higher). This policy will include requirements for approval and justification prior to disbursement. Require all staff to complete requisition forms for supplies or purchases in advance of procurement. These forms will include itemized details, purpose of purchase, and approval signatures. The Organization will update processes to ensure vendor and contract files include critical details: procurement history, selection method, contract terms, and vendor agreements. These files will be consistently maintained and reviewed for completeness. The Organization will strengthen the credit card usage process to require staff to submit itemized receipts, purpose of purchase, and pre-approval for all credit card transactions. This will include monthly reconciliations and management review of all credit card statements. The Organization will implement periodic internal reviews to ensure compliance with the new documentation and procurement processes. The CPA firm will assist with quality checks and provide ongoing guidance.

Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.

Finding 2023-005 Unallowable and Improperly Documented Direct Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 81 transactions were selected in a testing sample from a population of 315 direct expense transactions. Of the transactions tested, the auditors noted 15 instances of payments to contractors for work that were not sufficiently documented to support the allocatable work efforts performed on the grants in which they were charged. The auditors noted 4 instances where the costs charged to the federal grant were determined to not be reasonable, as they were either unallowable per Uniform Guidance, or were outside of the allowable costs approved in the federal award budgets. The auditors noted 1 instance of a transaction being claimed twice on different federal grants. The auditors also noted a significant lack of approvals for costs spent, as well as a failure to maintain adequate documentation, as noted in Finding 2023-003. Criteria: According to Uniform Guidance 2 CFR §200.402 - 405, costs charged to federal awards must be necessary, reasonable, consistent, allocable, and supported be adequate documentation. Federal requirements also mandate that expenditures align with the program budget and adhere to specific limitations on allowable costs. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim direct expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to determine that costs charged against federal grants are necessary, reasonable, consistent, allocable, and properly supported by adequate documentation significantly increases the risk that federal grants would be charged for expenses that did not occur, were not reasonably spent, or were charged against the wrong grant. These issues could lead to the misallocation of federal resources and the diminished impact on the program’s intended outcomes. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $17,959 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their procurement cycle that results in expenditures being properly reviewed and approved. Expenditures should only be approved by individuals with sufficient knowledge of allowable costs and should be familiar with Uniform Guidance and grant document requirements. Source documentation should clearly provide sufficient information to identify the scope of the expenses and to which grant the costs were charged against. The Organization should also better utilize its accounting database to ensure costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a formal procurement policy to ensure all contractor and vendor selections are based on program needs and comply with federal regulations. The procurement process will include clear criteria for vendor selection and justification, requirement to document scope of work, deliverables, and costs before engaging contractors, and verification of vendor eligibility against the Suspension and Debarment list.

Finding 2023-006 Unallowable and Improperly Documented Payroll Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 44 transactions were selected in a testing sample from a population of 243 direct payroll transactions. Of the transactions tested, the auditors noted 8 instances of payroll costs overclaimed by way of claiming the same work effort for the same period on multiple grants. The auditors noted 18 instances of failure to properly calculate and allocate the work effort completed by employees that worked on multiple grants and programs. The auditors noted 9 instances of the Organization failing to have approved pay rates on file that matched the amounts paid to the employees. The auditors also noted a significant lack of supervisory approval on timesheets or other time allocation support. Criteria: According to Uniform Guidance 2 CFR §200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records should be adequately documented, authorized, and supported by timesheets or other documentation approved by appropriate officials. These records should also reasonably reflect the total activity for which the employee is compensated, not exceeding 100 percent of compensated activities. The records should also 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. Further, proper internal controls should be in place to ensure compliance with federal requirements. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim payroll expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to specifically allocate the work performed for employees among specific grants, there is a significant risk that the Organization would charge work efforts against the wrong grants. Failure to have an appropriate system in place also increases the risk that the Organization would make duplicate claims for the same work effort. Failure to have supervisory approval over work effort could lead to claims of employee work that cannot be substantiated. Failure to have approved pay rates could lead to employees being paid more or less than owed, and federal programs being under or over claimed. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $32,393 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their accounting for payroll. All employees should complete timesheets or have up to date work effort allocations that clearly document their work efforts. These forms should be updated regularly and approved by appropriate supervisors. Employee pay rates should be documented and approved through offer letters and pay rate change forms. The Organization should evaluate the personnel involved with the payroll cycle and ensure that appropriate segregation of duties are in place, or other internal controls are implemented to ensure Organizational funds are properly safeguarded. The Organization should also better utilize its accounting database to ensure payroll costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will conduct mandatory training for all supervisors to reinforce the importance of accurate timesheet approval processes, proper time allocation for employees working on multiple grants or programs, and ensuring timely and consistent documentation of payroll expenditures. The Organization will ensure all approved pay rates are documented, signed, and filed for each employee. The Organization will configure QuickBooks to ensure payroll costs and grant allocations are clearly identifiable and traceable and linked to corresponding grants and federal claims.

Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-003 Lack of Documentation to Support Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to maintain financial records that properly substantiated expenditures which limited the ability to test several compliance requirements as part of audit procedures. These issues were most prevalent in testing direct disbursements. As part of audit procedures, 81 transactions were selected in a testing sample from a population which included 315 transactions. Of the 81 transactions tested, the Organization was unable to provide sufficient source documentation to support 21 of the transactions. Further, vendor and contract files were not consistently maintained and failed to provide adequate support to detail the history, method, and selection of procurement. Criteria: According to Uniform Guidance 2 CFR §200.302(b)(3), the Organization's financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Cause: The Organization failed to implement appropriate policies and procedures that would allow the administrative and accounting departments to obtain the necessary documentation to support incurred expenditures. The Organization also failed to implement an effective system of internal controls and processes that would require expenditure approvals which would improve the storage of appropriate documentation. Effect: The effect of not maintaining appropriate source documentation to support expenditures could result in federal funds being misused or inappropriately spent. Failure to obtain the appropriate documentation likely limits the Organization's ability to review and approve expenditures internally. The inability to submit receipts on cost reimbursement grants could lead to disallowed grant claims. Additionally, a lack of documentation prevents the Organization's funders or auditors to evaluate the expenditures and hold the organization accountable for their expenditures to ensure compliance. Consequences of these actions would lead to questioned costs that may require repayment to the funding source and potentially a loss of future funding. Questioned Costs: Known questioned costs of $27,358 were identified. " Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization's management develop and implement a robust document retention system for all elements of the financial reporting cycle. Documents should be stored in way that allows for them to be recalled upon request. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will collaborate with the CPA firm to develop a standardized process for recording and tracking gift card transactions and allotments, ensuring accountability and traceability. Develop and enforce a formal policy requiring comprehensive documentation (e.g., invoices, receipts, contracts) for all expenditures over a certain threshold (e.g., $500 or higher). This policy will include requirements for approval and justification prior to disbursement. Require all staff to complete requisition forms for supplies or purchases in advance of procurement. These forms will include itemized details, purpose of purchase, and approval signatures. The Organization will update processes to ensure vendor and contract files include critical details: procurement history, selection method, contract terms, and vendor agreements. These files will be consistently maintained and reviewed for completeness. The Organization will strengthen the credit card usage process to require staff to submit itemized receipts, purpose of purchase, and pre-approval for all credit card transactions. This will include monthly reconciliations and management review of all credit card statements. The Organization will implement periodic internal reviews to ensure compliance with the new documentation and procurement processes. The CPA firm will assist with quality checks and provide ongoing guidance.

Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.

Finding 2023-005 Unallowable and Improperly Documented Direct Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 81 transactions were selected in a testing sample from a population of 315 direct expense transactions. Of the transactions tested, the auditors noted 15 instances of payments to contractors for work that were not sufficiently documented to support the allocatable work efforts performed on the grants in which they were charged. The auditors noted 4 instances where the costs charged to the federal grant were determined to not be reasonable, as they were either unallowable per Uniform Guidance, or were outside of the allowable costs approved in the federal award budgets. The auditors noted 1 instance of a transaction being claimed twice on different federal grants. The auditors also noted a significant lack of approvals for costs spent, as well as a failure to maintain adequate documentation, as noted in Finding 2023-003. Criteria: According to Uniform Guidance 2 CFR §200.402 - 405, costs charged to federal awards must be necessary, reasonable, consistent, allocable, and supported be adequate documentation. Federal requirements also mandate that expenditures align with the program budget and adhere to specific limitations on allowable costs. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim direct expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to determine that costs charged against federal grants are necessary, reasonable, consistent, allocable, and properly supported by adequate documentation significantly increases the risk that federal grants would be charged for expenses that did not occur, were not reasonably spent, or were charged against the wrong grant. These issues could lead to the misallocation of federal resources and the diminished impact on the program’s intended outcomes. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $17,959 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their procurement cycle that results in expenditures being properly reviewed and approved. Expenditures should only be approved by individuals with sufficient knowledge of allowable costs and should be familiar with Uniform Guidance and grant document requirements. Source documentation should clearly provide sufficient information to identify the scope of the expenses and to which grant the costs were charged against. The Organization should also better utilize its accounting database to ensure costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a formal procurement policy to ensure all contractor and vendor selections are based on program needs and comply with federal regulations. The procurement process will include clear criteria for vendor selection and justification, requirement to document scope of work, deliverables, and costs before engaging contractors, and verification of vendor eligibility against the Suspension and Debarment list.

Finding 2023-006 Unallowable and Improperly Documented Payroll Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 44 transactions were selected in a testing sample from a population of 243 direct payroll transactions. Of the transactions tested, the auditors noted 8 instances of payroll costs overclaimed by way of claiming the same work effort for the same period on multiple grants. The auditors noted 18 instances of failure to properly calculate and allocate the work effort completed by employees that worked on multiple grants and programs. The auditors noted 9 instances of the Organization failing to have approved pay rates on file that matched the amounts paid to the employees. The auditors also noted a significant lack of supervisory approval on timesheets or other time allocation support. Criteria: According to Uniform Guidance 2 CFR §200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records should be adequately documented, authorized, and supported by timesheets or other documentation approved by appropriate officials. These records should also reasonably reflect the total activity for which the employee is compensated, not exceeding 100 percent of compensated activities. The records should also 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. Further, proper internal controls should be in place to ensure compliance with federal requirements. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim payroll expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to specifically allocate the work performed for employees among specific grants, there is a significant risk that the Organization would charge work efforts against the wrong grants. Failure to have an appropriate system in place also increases the risk that the Organization would make duplicate claims for the same work effort. Failure to have supervisory approval over work effort could lead to claims of employee work that cannot be substantiated. Failure to have approved pay rates could lead to employees being paid more or less than owed, and federal programs being under or over claimed. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $32,393 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their accounting for payroll. All employees should complete timesheets or have up to date work effort allocations that clearly document their work efforts. These forms should be updated regularly and approved by appropriate supervisors. Employee pay rates should be documented and approved through offer letters and pay rate change forms. The Organization should evaluate the personnel involved with the payroll cycle and ensure that appropriate segregation of duties are in place, or other internal controls are implemented to ensure Organizational funds are properly safeguarded. The Organization should also better utilize its accounting database to ensure payroll costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will conduct mandatory training for all supervisors to reinforce the importance of accurate timesheet approval processes, proper time allocation for employees working on multiple grants or programs, and ensuring timely and consistent documentation of payroll expenditures. The Organization will ensure all approved pay rates are documented, signed, and filed for each employee. The Organization will configure QuickBooks to ensure payroll costs and grant allocations are clearly identifiable and traceable and linked to corresponding grants and federal claims.

Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-003 Lack of Documentation to Support Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to maintain financial records that properly substantiated expenditures which limited the ability to test several compliance requirements as part of audit procedures. These issues were most prevalent in testing direct disbursements. As part of audit procedures, 81 transactions were selected in a testing sample from a population which included 315 transactions. Of the 81 transactions tested, the Organization was unable to provide sufficient source documentation to support 21 of the transactions. Further, vendor and contract files were not consistently maintained and failed to provide adequate support to detail the history, method, and selection of procurement. Criteria: According to Uniform Guidance 2 CFR §200.302(b)(3), the Organization's financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Cause: The Organization failed to implement appropriate policies and procedures that would allow the administrative and accounting departments to obtain the necessary documentation to support incurred expenditures. The Organization also failed to implement an effective system of internal controls and processes that would require expenditure approvals which would improve the storage of appropriate documentation. Effect: The effect of not maintaining appropriate source documentation to support expenditures could result in federal funds being misused or inappropriately spent. Failure to obtain the appropriate documentation likely limits the Organization's ability to review and approve expenditures internally. The inability to submit receipts on cost reimbursement grants could lead to disallowed grant claims. Additionally, a lack of documentation prevents the Organization's funders or auditors to evaluate the expenditures and hold the organization accountable for their expenditures to ensure compliance. Consequences of these actions would lead to questioned costs that may require repayment to the funding source and potentially a loss of future funding. Questioned Costs: Known questioned costs of $27,358 were identified. " Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization's management develop and implement a robust document retention system for all elements of the financial reporting cycle. Documents should be stored in way that allows for them to be recalled upon request. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will collaborate with the CPA firm to develop a standardized process for recording and tracking gift card transactions and allotments, ensuring accountability and traceability. Develop and enforce a formal policy requiring comprehensive documentation (e.g., invoices, receipts, contracts) for all expenditures over a certain threshold (e.g., $500 or higher). This policy will include requirements for approval and justification prior to disbursement. Require all staff to complete requisition forms for supplies or purchases in advance of procurement. These forms will include itemized details, purpose of purchase, and approval signatures. The Organization will update processes to ensure vendor and contract files include critical details: procurement history, selection method, contract terms, and vendor agreements. These files will be consistently maintained and reviewed for completeness. The Organization will strengthen the credit card usage process to require staff to submit itemized receipts, purpose of purchase, and pre-approval for all credit card transactions. This will include monthly reconciliations and management review of all credit card statements. The Organization will implement periodic internal reviews to ensure compliance with the new documentation and procurement processes. The CPA firm will assist with quality checks and provide ongoing guidance.

Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.

Finding 2023-005 Unallowable and Improperly Documented Direct Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 81 transactions were selected in a testing sample from a population of 315 direct expense transactions. Of the transactions tested, the auditors noted 15 instances of payments to contractors for work that were not sufficiently documented to support the allocatable work efforts performed on the grants in which they were charged. The auditors noted 4 instances where the costs charged to the federal grant were determined to not be reasonable, as they were either unallowable per Uniform Guidance, or were outside of the allowable costs approved in the federal award budgets. The auditors noted 1 instance of a transaction being claimed twice on different federal grants. The auditors also noted a significant lack of approvals for costs spent, as well as a failure to maintain adequate documentation, as noted in Finding 2023-003. Criteria: According to Uniform Guidance 2 CFR §200.402 - 405, costs charged to federal awards must be necessary, reasonable, consistent, allocable, and supported be adequate documentation. Federal requirements also mandate that expenditures align with the program budget and adhere to specific limitations on allowable costs. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim direct expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to determine that costs charged against federal grants are necessary, reasonable, consistent, allocable, and properly supported by adequate documentation significantly increases the risk that federal grants would be charged for expenses that did not occur, were not reasonably spent, or were charged against the wrong grant. These issues could lead to the misallocation of federal resources and the diminished impact on the program’s intended outcomes. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $17,959 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their procurement cycle that results in expenditures being properly reviewed and approved. Expenditures should only be approved by individuals with sufficient knowledge of allowable costs and should be familiar with Uniform Guidance and grant document requirements. Source documentation should clearly provide sufficient information to identify the scope of the expenses and to which grant the costs were charged against. The Organization should also better utilize its accounting database to ensure costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a formal procurement policy to ensure all contractor and vendor selections are based on program needs and comply with federal regulations. The procurement process will include clear criteria for vendor selection and justification, requirement to document scope of work, deliverables, and costs before engaging contractors, and verification of vendor eligibility against the Suspension and Debarment list.

Finding 2023-006 Unallowable and Improperly Documented Payroll Expenditures Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 44 transactions were selected in a testing sample from a population of 243 direct payroll transactions. Of the transactions tested, the auditors noted 8 instances of payroll costs overclaimed by way of claiming the same work effort for the same period on multiple grants. The auditors noted 18 instances of failure to properly calculate and allocate the work effort completed by employees that worked on multiple grants and programs. The auditors noted 9 instances of the Organization failing to have approved pay rates on file that matched the amounts paid to the employees. The auditors also noted a significant lack of supervisory approval on timesheets or other time allocation support. Criteria: According to Uniform Guidance 2 CFR §200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records should be adequately documented, authorized, and supported by timesheets or other documentation approved by appropriate officials. These records should also reasonably reflect the total activity for which the employee is compensated, not exceeding 100 percent of compensated activities. The records should also 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. Further, proper internal controls should be in place to ensure compliance with federal requirements. Cause: The Organization failed to implement appropriate policies, procedures, and internal controls that would allow management to properly record, track, and claim payroll expenditures compliant with Uniform Guidance requirements. The root cause of these matters appears to be due to a lack of sufficient skills, knowledge, and experience in the grant administrators and leadership roles. Effect: The impact of failing to establish a robust system of processes and internal controls to specifically allocate the work performed for employees among specific grants, there is a significant risk that the Organization would charge work efforts against the wrong grants. Failure to have an appropriate system in place also increases the risk that the Organization would make duplicate claims for the same work effort. Failure to have supervisory approval over work effort could lead to claims of employee work that cannot be substantiated. Failure to have approved pay rates could lead to employees being paid more or less than owed, and federal programs being under or over claimed. Overall, the failure to establish sufficient internal controls in these areas greatly increases the risks that federal funds would be spent outside of the Uniform Guidance requirements. Questioned Costs: Known questioned costs of $32,393 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization implement more robust processes and internal controls over their accounting for payroll. All employees should complete timesheets or have up to date work effort allocations that clearly document their work efforts. These forms should be updated regularly and approved by appropriate supervisors. Employee pay rates should be documented and approved through offer letters and pay rate change forms. The Organization should evaluate the personnel involved with the payroll cycle and ensure that appropriate segregation of duties are in place, or other internal controls are implemented to ensure Organizational funds are properly safeguarded. The Organization should also better utilize its accounting database to ensure payroll costs are properly tracked and categorized against its grant activities to prevent duplicate claims. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will conduct mandatory training for all supervisors to reinforce the importance of accurate timesheet approval processes, proper time allocation for employees working on multiple grants or programs, and ensuring timely and consistent documentation of payroll expenditures. The Organization will ensure all approved pay rates are documented, signed, and filed for each employee. The Organization will configure QuickBooks to ensure payroll costs and grant allocations are clearly identifiable and traceable and linked to corresponding grants and federal claims.

Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.

Finding 2023-001 Financial Close Process Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: The auditors noted a lack of a strong financial close process which led to several material audit adjustments that were proposed during the audit and recorded by the client to properly reflect various financial statement accounts. Criteria: Management is responsible for adopting sound accounting policies and establishing and maintaining a system of internal control for the fair presentation of the basis financial statements in accordance with accounting principles generally accepted in the United States of America. Cause: Personnel responsible for the month-end close and financial statement reporting process lack the necessary skills, knowledge, and experience regarding the applicable requirements dictated under accounting principles generally accepted in the United States of America. Effect: The impact resulting from an inadequate financial close process has several profound effects. First, the deficiency compromises the reliability and integrity of financial statements, raising concerns about the accuracy of reported financial data and information. Recommendation: It is recommended that the Organization review their current financial statement close process paying special attention to all balance sheet reconciliations and general ledger review of expense transactions. Considering the amount of activity on a monthly basis we recommend reconciling balance sheet accounts on a monthly or quarterly basis. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. Their role includes providing oversight and ensuring that all financial activities are appropriately reviewed and recorded. A comprehensive financial close process will be formalized and documented, which will include clear timelines, task ownership, and internal controls to ensure the timely and accurate reconciliation of all accounts prior to audit submission. Beginning in 2025, all financial transactions and balances will undergo rigorous monthly reviews to ensure proper classification in the correct financial statement accounts, reducing the likelihood of errors.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition and Context: During the audit, it was identified that the Organization encountered deficiencies in preparing an accurate and complete Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA is a critical component of the organization's reporting process, as it provides a summary of federal funds expended and aids in assessing compliance with federal regulations. The Organization's failure to ensure the accuracy and completeness of the SEFA indicates shortcomings in its reporting practices. It was observed that the SEFA presented inaccuracies and omissions, compromising the completeness and reliability of reported information. The SEFA did not accurately reflect all federal awards received and expended during the audit period, and relevant details such as award numbers, funding sources, and program titles were either missing or misstated. These deficiencies reflect a lack of adherence to reporting requirements. Criteria: Federal regulations and accounting principles generally accepted in the United States of America ("GAAP") mandate the preparation of a comprehensive and accurate SEFA, which provides transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Cause: Personnel responsible for SEFA preparation and reporting lack the necessary skills, knowledge, and experience regarding federal reporting requirements. Effect: Failure to prepare an accurate SEFA has several implications. First, the discrepancies in the SEFA could lead to misrepresentation of the extent and nature of federal funds received and expended, potentially misleading stakeholders. Second, the failure to accurately report federal awards and expenditures could result in non-compliance with federal reporting requirements, jeopardizing the organization's eligibility for future federal funding. Finally, an incomplete SEFA hinders transparency and accountability by obscuring the sources of federal funds and the programs they support, making it difficult to track the organization's use of grant funds. Recommendation: It is recommended that the Organization's management establish documented procedures for the preparation, review, and validation of the SEFA to ensure consistency and accuracy in future reporting. Second, management should implement controls to ensure accurate and complete recording of federal awards and corresponding expenditures in the SEFA. Finally, the Organization should procure training for personnel responsible for financial reporting, emphasizing the importance of accurate SEFA preparation and compliance with federal reporting requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will compile and provide the CPA firm with all federal contracts, grant agreements, and award letters to ensure complete visibility of federal funding sources and terms. A comprehensive master list of all federal awards received and expended to date will be prepared and regularly updated. This list will include critical details such as award numbers, funding agencies, program titles, FALN numbers, and expenditure amounts.

Finding 2023-008 Late Issuance of 2023 Single Audit Reporting Package Type of Finding: Noncompliance Condition and Context: The Organization is required to submit the reporting package by the deadline required by Uniform Guidance, which was September 30, 2024 for the year ended December 31, 2023. The Organization failed to file their report by this deadline. Criteria: The Uniform Guidance (2 CFR §200.512) requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The audit was not completed by September 30, 2024, due to timeliness of information being available to complete the audit. Effect: Failure to file the reporting package to the Federal Audit Clearinghouse timely delays the Organization's funders from their ability to evaluate the results of the Organization's audit and compliance over major programs. This impacts their ability to properly monitor the use of federal funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization improve their financial statement close process and provide more timely information to complete the audit to ensure it is able to file the reporting package by the deadline. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The CPA firm will work proactively with VOICES to ensure that all financial statements, schedules, and compliance documents are completed, reviewed, and filed well in advance of the reporting deadline.