Material Weakness Internal Controls Over Finacial Reporting Deficiencies in the Design of Controls Conditions: During our audit, we noted the organization does not have the following written Standard Operating Procedures (SOP), inadequate design of controls over the preparation of the financial statements, inadequate design of controls over significant accounts and processes, inadequate documentation of the components of internal controls. We have also found inadequate segregation of duties. The client has personnel and management under their employ who lack the qualifications and training to fulfill their assigned functions. There is also inadequate design of monitoring controls used to assess the design and operating effectiveness of the entity's internal control environment. Failures in the Operation of Internal Control Conditions: Failure of the information and communication component of internal control to provide complete and accurate output because of deficiencies in timeliness, completeness, and accuracy, failure to perform reconciliations of significant accounts. Poor Documentation Conditions: Lack of clear policies and procedures, making it difficult to monitor compliance and identify potential problems. Risk Assessment Failures Conditions: Not properly identifying and mitigating key risks within the organization. Lack of Management Review Conditions: Not actively monitoring and reviewing internal controls for effectiveness. Human Error Conditions: Mistakes made by employees due to poor training or lack of attention to detail. Criteria: 2 CFR Section 200.510 (a) - The auditee shall prepare financial statements that reflect its financial position, results of operation or change in net assets, and, where appropriate, cash flows for the fiscal year audited. Management is responsible for implementing a system of internal control over reconciling, verifying, and evaluating the nature of awards in accordance with applicable accounting standards. Management must assign accountable departmental employees and procedures must be in place for evaluating and documenting the nature of the various accounting steps of rollforwards and reconciliations in accordance with accounting standards and to ensure the accounts are being represented accurately. Effects of Conditions: Without SOPs there is a higher error rate, increased risk of compliance issues, operations stop or a lack of segregation of duties occur when key personnel are unavailable. Without internal controls over the preparation of the financial statements there is no assurance that management has accurate, timely and complete information, including accounting records. The organization faces an increased risk of fraud, errors in accounting, operational inefficiencies, compliance issues, damage to reputation, and difficulty in detecting and investigating fraudulent activity because of a lack of segregation of duties. The lack of monitoring can cause inaccurate financial reporting, increased risk of fraud, poor decision-making due to unreliable data, potential reputational damage, and missed opportunities to identify and correct financial problems early on, ultimately impacting the company's financial stability and overall performance. Cause of Conditions: The lack of SOPs (financial statement close, procure to pay, order tocash) created an environment that is not conducive for monitoring, reconciliation, and communication and can have a material impact on the entity’s financials. Policies and proceduresare not in place to ensure the effectiveness of financial management and oversight. The financial statement close process is not performed in a time manner to allow for reasonable financial statements to be prepared and reviewed by management and those charged with governance. Also, the entity lacks qualified staff in critical roles to ensure that the financial processes are initiated andmonitored and reported in a timely manner.
Auditor’s Recommendation: We recommend that internal controls, along with a control matrix and SOPs, are documented and appropriately implemented and distributed to staff and management along with implementing an ongoing process of regularly reviewing and assessing the financial data. Also, we recommend hiring additional qualified staff and providing the training needed to the current staff and new hires.
Significant Deficiency Compliance and Reporting Major Federal Award Program Audit Department of Health and Human Services Assistance Listing Number 93.224 Health Center Program Cluster Statement of Condition: The required annual financial statement submission to the Federal Audit Clearing House for the year ended February 1, 2023. Criteria: The U. S. Department of Health and Human Services has implemented the Uniform Guidance at 45 CFR § 75. According to the Subpart F-Audits 45 CFR §75.501 (a) non-federal entities that expend $750,000 or more during the non-Federal entity's fiscal year in federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. Guidance on determining Federal awards expended is provided at 45CFR § 75.502. The regulation obligates organizations expending federal grant funds over $750,000 to submit their required annual financial statement information within nine months of their year end to the Federal Audit Clearing House via the Internet. Effect of Condition: The Organization was temporarily out of compliance with federal requirements and guidelines. Cause of Condition: The Organization did not complete its annual audit in a timely manner. Recommendation: We recommend that the required annual financial statement submission to the Federal Audit Clearing House be made on a timely basis for the 2024 financial statements and for all future required submissions.
Significant Deficiency Internal Control Weakness and Non-Compliance Condition: Client provided more than one version of the SEFA which denotes errors to the previous version. Due to the client providing several versions of the SEFA, the final SEFA was not provided in a timely manner. Criteria: Per Code of Federal Regulations, the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with, §200.514 states, “The auditor must determine whether the financial statements of the auditee are presented fairly in all material respects in accordance with generally accepted accounting principles. The auditor must also determine whether the schedule of expenditures of Federal awards is stated fairly in all material respects in relation to the auditee's financial statements as a whole”. Providing a SEFA with errors and or omissions impairs the afore-mentioned code regulations. Cause: The organization does not have effective controls over the review of the SEFA. Effect or Potential Effect: Over/understand the financial statement and grant revenue and expenses. Auditor’s Recommendation: Management should implement a review process with accounting on a quarterly basis to assure the accuracy and consistency of the SEFA
Significant Deficiency Internal Control Weakness – Violation of Federal and State Laws and Provisions Condition: The minimum requirement of at least 51% of the Board Members to utilize the Health Care Centers at least once in a two-year (24 mos.) period was not satisfied. The federal mandate of the funding agency is that the board must be comprised of at least 9 Board Members with a maximum of 25. Also, Gateway could not provide a complete list of the actual board members for the board meeting minutes for the 2022 fiscal year. Criteria: Compliance with Federal statutes, regulations, and the terms and conditions of Federal awards that may have a direct and material effect on each of its major programs per funding agency and the Compliance Supplement (OMB). Cause: Policies and procedures are not in place or implemented, to ensure the effectiveness of financial management, laws and regulations and oversight. Effect or Potential Effect: The loss of grant funding due to noncompliance. Auditor’s Recommendation: The board members should utilize the services of the clinics as mandated by the funding agency.
Material Weakness Internal Controls Over Finacial Reporting Deficiencies in the Design of Controls Conditions: During our audit, we noted the organization does not have the following written Standard Operating Procedures (SOP), inadequate design of controls over the preparation of the financial statements, inadequate design of controls over significant accounts and processes, inadequate documentation of the components of internal controls. We have also found inadequate segregation of duties. The client has personnel and management under their employ who lack the qualifications and training to fulfill their assigned functions. There is also inadequate design of monitoring controls used to assess the design and operating effectiveness of the entity's internal control environment. Failures in the Operation of Internal Control Conditions: Failure of the information and communication component of internal control to provide complete and accurate output because of deficiencies in timeliness, completeness, and accuracy, failure to perform reconciliations of significant accounts. Poor Documentation Conditions: Lack of clear policies and procedures, making it difficult to monitor compliance and identify potential problems. Risk Assessment Failures Conditions: Not properly identifying and mitigating key risks within the organization. Lack of Management Review Conditions: Not actively monitoring and reviewing internal controls for effectiveness. Human Error Conditions: Mistakes made by employees due to poor training or lack of attention to detail. Criteria: 2 CFR Section 200.510 (a) - The auditee shall prepare financial statements that reflect its financial position, results of operation or change in net assets, and, where appropriate, cash flows for the fiscal year audited. Management is responsible for implementing a system of internal control over reconciling, verifying, and evaluating the nature of awards in accordance with applicable accounting standards. Management must assign accountable departmental employees and procedures must be in place for evaluating and documenting the nature of the various accounting steps of rollforwards and reconciliations in accordance with accounting standards and to ensure the accounts are being represented accurately. Effects of Conditions: Without SOPs there is a higher error rate, increased risk of compliance issues, operations stop or a lack of segregation of duties occur when key personnel are unavailable. Without internal controls over the preparation of the financial statements there is no assurance that management has accurate, timely and complete information, including accounting records. The organization faces an increased risk of fraud, errors in accounting, operational inefficiencies, compliance issues, damage to reputation, and difficulty in detecting and investigating fraudulent activity because of a lack of segregation of duties. The lack of monitoring can cause inaccurate financial reporting, increased risk of fraud, poor decision-making due to unreliable data, potential reputational damage, and missed opportunities to identify and correct financial problems early on, ultimately impacting the company's financial stability and overall performance. Cause of Conditions: The lack of SOPs (financial statement close, procure to pay, order tocash) created an environment that is not conducive for monitoring, reconciliation, and communication and can have a material impact on the entity’s financials. Policies and proceduresare not in place to ensure the effectiveness of financial management and oversight. The financial statement close process is not performed in a time manner to allow for reasonable financial statements to be prepared and reviewed by management and those charged with governance. Also, the entity lacks qualified staff in critical roles to ensure that the financial processes are initiated andmonitored and reported in a timely manner.
Auditor’s Recommendation: We recommend that internal controls, along with a control matrix and SOPs, are documented and appropriately implemented and distributed to staff and management along with implementing an ongoing process of regularly reviewing and assessing the financial data. Also, we recommend hiring additional qualified staff and providing the training needed to the current staff and new hires.
Significant Deficiency Compliance and Reporting Major Federal Award Program Audit Department of Health and Human Services Assistance Listing Number 93.224 Health Center Program Cluster Statement of Condition: The required annual financial statement submission to the Federal Audit Clearing House for the year ended February 1, 2023. Criteria: The U. S. Department of Health and Human Services has implemented the Uniform Guidance at 45 CFR § 75. According to the Subpart F-Audits 45 CFR §75.501 (a) non-federal entities that expend $750,000 or more during the non-Federal entity's fiscal year in federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. Guidance on determining Federal awards expended is provided at 45CFR § 75.502. The regulation obligates organizations expending federal grant funds over $750,000 to submit their required annual financial statement information within nine months of their year end to the Federal Audit Clearing House via the Internet. Effect of Condition: The Organization was temporarily out of compliance with federal requirements and guidelines. Cause of Condition: The Organization did not complete its annual audit in a timely manner. Recommendation: We recommend that the required annual financial statement submission to the Federal Audit Clearing House be made on a timely basis for the 2024 financial statements and for all future required submissions.
Significant Deficiency Internal Control Weakness and Non-Compliance Condition: Client provided more than one version of the SEFA which denotes errors to the previous version. Due to the client providing several versions of the SEFA, the final SEFA was not provided in a timely manner. Criteria: Per Code of Federal Regulations, the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with, §200.514 states, “The auditor must determine whether the financial statements of the auditee are presented fairly in all material respects in accordance with generally accepted accounting principles. The auditor must also determine whether the schedule of expenditures of Federal awards is stated fairly in all material respects in relation to the auditee's financial statements as a whole”. Providing a SEFA with errors and or omissions impairs the afore-mentioned code regulations. Cause: The organization does not have effective controls over the review of the SEFA. Effect or Potential Effect: Over/understand the financial statement and grant revenue and expenses. Auditor’s Recommendation: Management should implement a review process with accounting on a quarterly basis to assure the accuracy and consistency of the SEFA
Significant Deficiency Internal Control Weakness – Violation of Federal and State Laws and Provisions Condition: The minimum requirement of at least 51% of the Board Members to utilize the Health Care Centers at least once in a two-year (24 mos.) period was not satisfied. The federal mandate of the funding agency is that the board must be comprised of at least 9 Board Members with a maximum of 25. Also, Gateway could not provide a complete list of the actual board members for the board meeting minutes for the 2022 fiscal year. Criteria: Compliance with Federal statutes, regulations, and the terms and conditions of Federal awards that may have a direct and material effect on each of its major programs per funding agency and the Compliance Supplement (OMB). Cause: Policies and procedures are not in place or implemented, to ensure the effectiveness of financial management, laws and regulations and oversight. Effect or Potential Effect: The loss of grant funding due to noncompliance. Auditor’s Recommendation: The board members should utilize the services of the clinics as mandated by the funding agency.