Audit 338449

Finding 2023-001 – Internal Control Deficiencies (Material Weakness) Information on the Federal Program – Mental and Behavioral Health Education and Training Grants, FAL No. 93.732, December 31, 2023. Criteria – 45 CFR 75.303, 75.430, 75.302, 75,305, 75.320. Condition – Noncompliance were noted, as more fully described in the context below. Questioned Cost – See condition above. Context – We noted the following instances on non-compliance during the audit: a) We noted a lack of review over the payroll process during our testing of time and effort. The Organization does not require time and effort reporting by employees per payroll. A budgeted time and effort schedule is maintained instead. We noted the contract on file for one employee had not been updated since the date of hire and did not contain the current payrate. We discovered that the organization does not have formal human resource forms to document and support pay changes and salary allocations per grant agreements. Exceptions were also noted in salaries charged to the grant. b) We noted expenses reported on the drawdown request that could not be located in the general ledger totaling $10,908.23. We also noted a variance in fringe and salary expenses in the general ledger vs drawdown request in the amount of $1,234. A total of $94,650 were recorded by journal entry at year end to record activity which had been drawdown months prior. Drawdowns did not contain physical evidence of prior approval. c) During our testing we discovered instances of credit card purchases missing receipts/invoices, prior purchase approvals, and an invoice charged to grant expenditures was paid untimely. Purchases for equipment were noted, however the client does not maintain a PP&E schedule, and does not have a log of equipment purchased with federal funds. Approval for purchases is obtained via email chain rather than a formal check/purchase request for approval. Supporting documents/receipts, invoices, etc. requested by the auditors were not readily available or provided in phases. We also noted most purchases are made via electronic funds transfer/ach transaction or credit cards and rarely a payment is made via check. d) We were informed that the Organization may have bank accounts that none of the officials have been granted access. The bank has not confirmed that such accounts exist. There have also been reported unusual fees drafted from the operating bank account but vendor statements or detail transactions are not assessable by the Organization. e) We noted a lack of segregation of duties and responsibilities in the accounting position. The accountant processes payments, processes federal drawdowns, post journal entries, and reconciles the bank accounts, and creates reports. Cause – Oversight by responsible employees. Effect – Unallowable cost could have been charged to the grant. Repeat Finding – No Recommendation – a) We recommend that /me and effort repor/ng be completed, reviewed and approved prior to seeking reimbursement for payroll expenses from the grantor. We also recommend establishing formal procedures over human resources to include maintaining standard employee records such as contracts, personnel ac/on forms that are updated rou/nely to ensure accuracy over the payroll process and mi/gate the chance of overcharging the grant. Federal regula/ons (45 CFR 75.303 and 75.430) , require that grant recipients provide reasonable assurance that charges are accurate, allowable, and properly allocated and that salary and wages charged to federal awards are based on actual rather than budget es/mates. b) We recommend all drawdowns are approved by management prior to the request being made and that drawdowns and supporting expenditures are accurately and timely recorded. Federal regulations (45 CFR 75.302 and 75.305) require that funds drawn down are limited to the minimum amounts needed to cover immediate project cost and not made to cover future or budgeted expenditures. c) We recommend the Organization require prior approval for all credit card, check, and electronic funds transfer, and maintain source documents in a manner that’s easily accessible when needed. Proper supporting source documents include invoices, approved expense/check request, payment advice copy, etc. Lastly, we recommend that the Organization develop and maintain a roll forward schedule of property, plant, and equipment to tract all equipment purchased. Federal regulations, (45 CFR 75.320) property records be maintained that include a description, cost, purchase date, source of funding, location, and condition of each property item. d) We recommend the Organization continue to seek and resolve and develop and implement safeguards to protect ownership of bank accounts. e) We recommend that bank reconciliations be prepared timely, within 14 days and approved timely by an official outside the payment process but familiar with the financial activities to safeguard assets and prevent misappropriation. We also recommend that the second person assumes the responsibilities of re-porting. Views of Responsible Officials – Management agrees with the auditor’s findings and will expand steps to strengthen its internal controls. Specific actions include updating our Finance manual to include written approval procedures for the payroll, drawdowns, credit card, and equipment purchases. We will also appoint a qualified employee to help segregate duties in the Finance office. We will address other specific recommendations in the 2023 Via Hope Corrective Action Plan.

Finding 2023-001 – Internal Control Deficiencies (Material Weakness) Information on the Federal Program – Mental and Behavioral Health Education and Training Grants, FAL No. 93.732, December 31, 2023. Criteria – 45 CFR 75.303, 75.430, 75.302, 75,305, 75.320. Condition – Noncompliance were noted, as more fully described in the context below. Questioned Cost – See condition above. Context – We noted the following instances on non-compliance during the audit: a) We noted a lack of review over the payroll process during our testing of time and effort. The Organization does not require time and effort reporting by employees per payroll. A budgeted time and effort schedule is maintained instead. We noted the contract on file for one employee had not been updated since the date of hire and did not contain the current payrate. We discovered that the organization does not have formal human resource forms to document and support pay changes and salary allocations per grant agreements. Exceptions were also noted in salaries charged to the grant. b) We noted expenses reported on the drawdown request that could not be located in the general ledger totaling $10,908.23. We also noted a variance in fringe and salary expenses in the general ledger vs drawdown request in the amount of $1,234. A total of $94,650 were recorded by journal entry at year end to record activity which had been drawdown months prior. Drawdowns did not contain physical evidence of prior approval. c) During our testing we discovered instances of credit card purchases missing receipts/invoices, prior purchase approvals, and an invoice charged to grant expenditures was paid untimely. Purchases for equipment were noted, however the client does not maintain a PP&E schedule, and does not have a log of equipment purchased with federal funds. Approval for purchases is obtained via email chain rather than a formal check/purchase request for approval. Supporting documents/receipts, invoices, etc. requested by the auditors were not readily available or provided in phases. We also noted most purchases are made via electronic funds transfer/ach transaction or credit cards and rarely a payment is made via check. d) We were informed that the Organization may have bank accounts that none of the officials have been granted access. The bank has not confirmed that such accounts exist. There have also been reported unusual fees drafted from the operating bank account but vendor statements or detail transactions are not assessable by the Organization. e) We noted a lack of segregation of duties and responsibilities in the accounting position. The accountant processes payments, processes federal drawdowns, post journal entries, and reconciles the bank accounts, and creates reports. Cause – Oversight by responsible employees. Effect – Unallowable cost could have been charged to the grant. Repeat Finding – No Recommendation – a) We recommend that /me and effort repor/ng be completed, reviewed and approved prior to seeking reimbursement for payroll expenses from the grantor. We also recommend establishing formal procedures over human resources to include maintaining standard employee records such as contracts, personnel ac/on forms that are updated rou/nely to ensure accuracy over the payroll process and mi/gate the chance of overcharging the grant. Federal regula/ons (45 CFR 75.303 and 75.430) , require that grant recipients provide reasonable assurance that charges are accurate, allowable, and properly allocated and that salary and wages charged to federal awards are based on actual rather than budget es/mates. b) We recommend all drawdowns are approved by management prior to the request being made and that drawdowns and supporting expenditures are accurately and timely recorded. Federal regulations (45 CFR 75.302 and 75.305) require that funds drawn down are limited to the minimum amounts needed to cover immediate project cost and not made to cover future or budgeted expenditures. c) We recommend the Organization require prior approval for all credit card, check, and electronic funds transfer, and maintain source documents in a manner that’s easily accessible when needed. Proper supporting source documents include invoices, approved expense/check request, payment advice copy, etc. Lastly, we recommend that the Organization develop and maintain a roll forward schedule of property, plant, and equipment to tract all equipment purchased. Federal regulations, (45 CFR 75.320) property records be maintained that include a description, cost, purchase date, source of funding, location, and condition of each property item. d) We recommend the Organization continue to seek and resolve and develop and implement safeguards to protect ownership of bank accounts. e) We recommend that bank reconciliations be prepared timely, within 14 days and approved timely by an official outside the payment process but familiar with the financial activities to safeguard assets and prevent misappropriation. We also recommend that the second person assumes the responsibilities of re-porting. Views of Responsible Officials – Management agrees with the auditor’s findings and will expand steps to strengthen its internal controls. Specific actions include updating our Finance manual to include written approval procedures for the payroll, drawdowns, credit card, and equipment purchases. We will also appoint a qualified employee to help segregate duties in the Finance office. We will address other specific recommendations in the 2023 Via Hope Corrective Action Plan.

Finding 2023-001 – Internal Control Deficiencies (Material Weakness) Information on the Federal Program – Mental and Behavioral Health Education and Training Grants, FAL No. 93.732, December 31, 2023. Criteria – 45 CFR 75.303, 75.430, 75.302, 75,305, 75.320. Condition – Noncompliance were noted, as more fully described in the context below. Questioned Cost – See condition above. Context – We noted the following instances on non-compliance during the audit: a) We noted a lack of review over the payroll process during our testing of time and effort. The Organization does not require time and effort reporting by employees per payroll. A budgeted time and effort schedule is maintained instead. We noted the contract on file for one employee had not been updated since the date of hire and did not contain the current payrate. We discovered that the organization does not have formal human resource forms to document and support pay changes and salary allocations per grant agreements. Exceptions were also noted in salaries charged to the grant. b) We noted expenses reported on the drawdown request that could not be located in the general ledger totaling $10,908.23. We also noted a variance in fringe and salary expenses in the general ledger vs drawdown request in the amount of $1,234. A total of $94,650 were recorded by journal entry at year end to record activity which had been drawdown months prior. Drawdowns did not contain physical evidence of prior approval. c) During our testing we discovered instances of credit card purchases missing receipts/invoices, prior purchase approvals, and an invoice charged to grant expenditures was paid untimely. Purchases for equipment were noted, however the client does not maintain a PP&E schedule, and does not have a log of equipment purchased with federal funds. Approval for purchases is obtained via email chain rather than a formal check/purchase request for approval. Supporting documents/receipts, invoices, etc. requested by the auditors were not readily available or provided in phases. We also noted most purchases are made via electronic funds transfer/ach transaction or credit cards and rarely a payment is made via check. d) We were informed that the Organization may have bank accounts that none of the officials have been granted access. The bank has not confirmed that such accounts exist. There have also been reported unusual fees drafted from the operating bank account but vendor statements or detail transactions are not assessable by the Organization. e) We noted a lack of segregation of duties and responsibilities in the accounting position. The accountant processes payments, processes federal drawdowns, post journal entries, and reconciles the bank accounts, and creates reports. Cause – Oversight by responsible employees. Effect – Unallowable cost could have been charged to the grant. Repeat Finding – No Recommendation – a) We recommend that /me and effort repor/ng be completed, reviewed and approved prior to seeking reimbursement for payroll expenses from the grantor. We also recommend establishing formal procedures over human resources to include maintaining standard employee records such as contracts, personnel ac/on forms that are updated rou/nely to ensure accuracy over the payroll process and mi/gate the chance of overcharging the grant. Federal regula/ons (45 CFR 75.303 and 75.430) , require that grant recipients provide reasonable assurance that charges are accurate, allowable, and properly allocated and that salary and wages charged to federal awards are based on actual rather than budget es/mates. b) We recommend all drawdowns are approved by management prior to the request being made and that drawdowns and supporting expenditures are accurately and timely recorded. Federal regulations (45 CFR 75.302 and 75.305) require that funds drawn down are limited to the minimum amounts needed to cover immediate project cost and not made to cover future or budgeted expenditures. c) We recommend the Organization require prior approval for all credit card, check, and electronic funds transfer, and maintain source documents in a manner that’s easily accessible when needed. Proper supporting source documents include invoices, approved expense/check request, payment advice copy, etc. Lastly, we recommend that the Organization develop and maintain a roll forward schedule of property, plant, and equipment to tract all equipment purchased. Federal regulations, (45 CFR 75.320) property records be maintained that include a description, cost, purchase date, source of funding, location, and condition of each property item. d) We recommend the Organization continue to seek and resolve and develop and implement safeguards to protect ownership of bank accounts. e) We recommend that bank reconciliations be prepared timely, within 14 days and approved timely by an official outside the payment process but familiar with the financial activities to safeguard assets and prevent misappropriation. We also recommend that the second person assumes the responsibilities of re-porting. Views of Responsible Officials – Management agrees with the auditor’s findings and will expand steps to strengthen its internal controls. Specific actions include updating our Finance manual to include written approval procedures for the payroll, drawdowns, credit card, and equipment purchases. We will also appoint a qualified employee to help segregate duties in the Finance office. We will address other specific recommendations in the 2023 Via Hope Corrective Action Plan.

Finding 2023-001 – Internal Control Deficiencies (Material Weakness) Information on the Federal Program – Mental and Behavioral Health Education and Training Grants, FAL No. 93.732, December 31, 2023. Criteria – 45 CFR 75.303, 75.430, 75.302, 75,305, 75.320. Condition – Noncompliance were noted, as more fully described in the context below. Questioned Cost – See condition above. Context – We noted the following instances on non-compliance during the audit: a) We noted a lack of review over the payroll process during our testing of time and effort. The Organization does not require time and effort reporting by employees per payroll. A budgeted time and effort schedule is maintained instead. We noted the contract on file for one employee had not been updated since the date of hire and did not contain the current payrate. We discovered that the organization does not have formal human resource forms to document and support pay changes and salary allocations per grant agreements. Exceptions were also noted in salaries charged to the grant. b) We noted expenses reported on the drawdown request that could not be located in the general ledger totaling $10,908.23. We also noted a variance in fringe and salary expenses in the general ledger vs drawdown request in the amount of $1,234. A total of $94,650 were recorded by journal entry at year end to record activity which had been drawdown months prior. Drawdowns did not contain physical evidence of prior approval. c) During our testing we discovered instances of credit card purchases missing receipts/invoices, prior purchase approvals, and an invoice charged to grant expenditures was paid untimely. Purchases for equipment were noted, however the client does not maintain a PP&E schedule, and does not have a log of equipment purchased with federal funds. Approval for purchases is obtained via email chain rather than a formal check/purchase request for approval. Supporting documents/receipts, invoices, etc. requested by the auditors were not readily available or provided in phases. We also noted most purchases are made via electronic funds transfer/ach transaction or credit cards and rarely a payment is made via check. d) We were informed that the Organization may have bank accounts that none of the officials have been granted access. The bank has not confirmed that such accounts exist. There have also been reported unusual fees drafted from the operating bank account but vendor statements or detail transactions are not assessable by the Organization. e) We noted a lack of segregation of duties and responsibilities in the accounting position. The accountant processes payments, processes federal drawdowns, post journal entries, and reconciles the bank accounts, and creates reports. Cause – Oversight by responsible employees. Effect – Unallowable cost could have been charged to the grant. Repeat Finding – No Recommendation – a) We recommend that /me and effort repor/ng be completed, reviewed and approved prior to seeking reimbursement for payroll expenses from the grantor. We also recommend establishing formal procedures over human resources to include maintaining standard employee records such as contracts, personnel ac/on forms that are updated rou/nely to ensure accuracy over the payroll process and mi/gate the chance of overcharging the grant. Federal regula/ons (45 CFR 75.303 and 75.430) , require that grant recipients provide reasonable assurance that charges are accurate, allowable, and properly allocated and that salary and wages charged to federal awards are based on actual rather than budget es/mates. b) We recommend all drawdowns are approved by management prior to the request being made and that drawdowns and supporting expenditures are accurately and timely recorded. Federal regulations (45 CFR 75.302 and 75.305) require that funds drawn down are limited to the minimum amounts needed to cover immediate project cost and not made to cover future or budgeted expenditures. c) We recommend the Organization require prior approval for all credit card, check, and electronic funds transfer, and maintain source documents in a manner that’s easily accessible when needed. Proper supporting source documents include invoices, approved expense/check request, payment advice copy, etc. Lastly, we recommend that the Organization develop and maintain a roll forward schedule of property, plant, and equipment to tract all equipment purchased. Federal regulations, (45 CFR 75.320) property records be maintained that include a description, cost, purchase date, source of funding, location, and condition of each property item. d) We recommend the Organization continue to seek and resolve and develop and implement safeguards to protect ownership of bank accounts. e) We recommend that bank reconciliations be prepared timely, within 14 days and approved timely by an official outside the payment process but familiar with the financial activities to safeguard assets and prevent misappropriation. We also recommend that the second person assumes the responsibilities of re-porting. Views of Responsible Officials – Management agrees with the auditor’s findings and will expand steps to strengthen its internal controls. Specific actions include updating our Finance manual to include written approval procedures for the payroll, drawdowns, credit card, and equipment purchases. We will also appoint a qualified employee to help segregate duties in the Finance office. We will address other specific recommendations in the 2023 Via Hope Corrective Action Plan.