Audit 342468

Finding Reference: 2023-003 Prior Year Finding: 2022-006 Federal Agency: Department of Health and Human Services Compliance Requirement: Allowable Costs (Indirect Costs) Type of Finding: Material Weakness in Internal Control over Compliance Federal Program: 93.569 – Community Services Block Grant (CSBG) Grant Award: Various Condition/Context: During the testing of indirect cost allocations to federal programs, it was determined that SMTCCAC charged excess indirect costs for programs to the Community Services Block Grant. The actual indirect costs allocated to all programs exceeded the approved provisional federal indirect cost rate of 22%; and was ultimately reported as administration costs within other costs for the grant, which exceeded the CSBG budget line without obtaining approval from the applicable funding agencies. Criteria: On November 13, 2023, the Department of Health and Human Services approved a provisional indirect cost rate of 22% to be applied to total direct salaries and fringe benefit costs related to all federal programs. This rate is applicable to SMTCCAC’s grants, contract, and other agreements covered by 2 CFR 200 for the period effective from December 1, 2020 to June 30, 2024. According to the approved rate agreement, if any federal contract, grant, or other agreement is reimbursing indirect costs by a means other than the approved rate in this agreement, the organization should (1) credit such costs to the affected programs, and (2) apply the approved rate to the appropriate base to identify the proper amount of indirect costs allocable to these programs. Cause: SMTCCAC allocated general and administration costs to the grant based on its monthly calculated indirect cost rate per program, rather than allocating indirect costs to programs which should not exceed the approved provisional rate of 22%. For FY2023, SMTCCAC calculated an actual indirect cost rate of 57.48% and the excess above the approved provisional rate of 22% was charged to CSBG program for all programs. These excess costs were not within the approved budget for the category administration costs. Effect: SMTCCAC allocated indirect costs for programs in excess of the approved provisional rate to the Community Services Block Grant. These costs were in excess of the budget for administration costs, although within the aggregate budget total. Questioned Costs: Based on our assessment using the approved provisional rate, SMTCCAC overallocated indirect costs to the CSBG grant by $385,819, which exceeded the CSBG budget line category for administration costs. Recommendation: We recommend that SMTCCAC ensures compliance with the cost principles in 2 CFR Part 200, Subpart E, adhere to the approved federal indirect cost rate agreement, and properly apply either the actual annual indirect cost rate or the approved federal rate, whichever is lower, when determining indirect costs charged to federal awards. In addition, other general and administrative costs charged to CSBG should be within an approved budget for the costs.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-003 Prior Year Finding: 2022-006 Federal Agency: Department of Health and Human Services Compliance Requirement: Allowable Costs (Indirect Costs) Type of Finding: Material Weakness in Internal Control over Compliance Federal Program: 93.569 – Community Services Block Grant (CSBG) Grant Award: Various Condition/Context: During the testing of indirect cost allocations to federal programs, it was determined that SMTCCAC charged excess indirect costs for programs to the Community Services Block Grant. The actual indirect costs allocated to all programs exceeded the approved provisional federal indirect cost rate of 22%; and was ultimately reported as administration costs within other costs for the grant, which exceeded the CSBG budget line without obtaining approval from the applicable funding agencies. Criteria: On November 13, 2023, the Department of Health and Human Services approved a provisional indirect cost rate of 22% to be applied to total direct salaries and fringe benefit costs related to all federal programs. This rate is applicable to SMTCCAC’s grants, contract, and other agreements covered by 2 CFR 200 for the period effective from December 1, 2020 to June 30, 2024. According to the approved rate agreement, if any federal contract, grant, or other agreement is reimbursing indirect costs by a means other than the approved rate in this agreement, the organization should (1) credit such costs to the affected programs, and (2) apply the approved rate to the appropriate base to identify the proper amount of indirect costs allocable to these programs. Cause: SMTCCAC allocated general and administration costs to the grant based on its monthly calculated indirect cost rate per program, rather than allocating indirect costs to programs which should not exceed the approved provisional rate of 22%. For FY2023, SMTCCAC calculated an actual indirect cost rate of 57.48% and the excess above the approved provisional rate of 22% was charged to CSBG program for all programs. These excess costs were not within the approved budget for the category administration costs. Effect: SMTCCAC allocated indirect costs for programs in excess of the approved provisional rate to the Community Services Block Grant. These costs were in excess of the budget for administration costs, although within the aggregate budget total. Questioned Costs: Based on our assessment using the approved provisional rate, SMTCCAC overallocated indirect costs to the CSBG grant by $385,819, which exceeded the CSBG budget line category for administration costs. Recommendation: We recommend that SMTCCAC ensures compliance with the cost principles in 2 CFR Part 200, Subpart E, adhere to the approved federal indirect cost rate agreement, and properly apply either the actual annual indirect cost rate or the approved federal rate, whichever is lower, when determining indirect costs charged to federal awards. In addition, other general and administrative costs charged to CSBG should be within an approved budget for the costs.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-003 Prior Year Finding: 2022-006 Federal Agency: Department of Health and Human Services Compliance Requirement: Allowable Costs (Indirect Costs) Type of Finding: Material Weakness in Internal Control over Compliance Federal Program: 93.569 – Community Services Block Grant (CSBG) Grant Award: Various Condition/Context: During the testing of indirect cost allocations to federal programs, it was determined that SMTCCAC charged excess indirect costs for programs to the Community Services Block Grant. The actual indirect costs allocated to all programs exceeded the approved provisional federal indirect cost rate of 22%; and was ultimately reported as administration costs within other costs for the grant, which exceeded the CSBG budget line without obtaining approval from the applicable funding agencies. Criteria: On November 13, 2023, the Department of Health and Human Services approved a provisional indirect cost rate of 22% to be applied to total direct salaries and fringe benefit costs related to all federal programs. This rate is applicable to SMTCCAC’s grants, contract, and other agreements covered by 2 CFR 200 for the period effective from December 1, 2020 to June 30, 2024. According to the approved rate agreement, if any federal contract, grant, or other agreement is reimbursing indirect costs by a means other than the approved rate in this agreement, the organization should (1) credit such costs to the affected programs, and (2) apply the approved rate to the appropriate base to identify the proper amount of indirect costs allocable to these programs. Cause: SMTCCAC allocated general and administration costs to the grant based on its monthly calculated indirect cost rate per program, rather than allocating indirect costs to programs which should not exceed the approved provisional rate of 22%. For FY2023, SMTCCAC calculated an actual indirect cost rate of 57.48% and the excess above the approved provisional rate of 22% was charged to CSBG program for all programs. These excess costs were not within the approved budget for the category administration costs. Effect: SMTCCAC allocated indirect costs for programs in excess of the approved provisional rate to the Community Services Block Grant. These costs were in excess of the budget for administration costs, although within the aggregate budget total. Questioned Costs: Based on our assessment using the approved provisional rate, SMTCCAC overallocated indirect costs to the CSBG grant by $385,819, which exceeded the CSBG budget line category for administration costs. Recommendation: We recommend that SMTCCAC ensures compliance with the cost principles in 2 CFR Part 200, Subpart E, adhere to the approved federal indirect cost rate agreement, and properly apply either the actual annual indirect cost rate or the approved federal rate, whichever is lower, when determining indirect costs charged to federal awards. In addition, other general and administrative costs charged to CSBG should be within an approved budget for the costs.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-002 Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Receivable Federal Agency: Various Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition: SMTCCAC’s SEFA included incorrect expenditures resulting from unreconciled grants receivable balances. Certain federal expenditures were either overstated or understated because SMTCCAC did not reconcile its grants receivable accounts before preparing the SEFA. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Reconciliation of grants receivable is an essential internal control to ensure that SEFA reporting aligns with federal requirements. Cause: Management did not implement adequate procedures to reconcile grants receivable accounts prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements, including overstated federal expenditures for certain programs and understated expenditures for others. This could result in non-compliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants receivable are fully reconciled before the preparation of the SEFA. This includes reviewing all grant activity, reconciling receivable balances to underlying documentation, and making necessary adjustments promptly.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-003 Prior Year Finding: 2022-006 Federal Agency: Department of Health and Human Services Compliance Requirement: Allowable Costs (Indirect Costs) Type of Finding: Material Weakness in Internal Control over Compliance Federal Program: 93.569 – Community Services Block Grant (CSBG) Grant Award: Various Condition/Context: During the testing of indirect cost allocations to federal programs, it was determined that SMTCCAC charged excess indirect costs for programs to the Community Services Block Grant. The actual indirect costs allocated to all programs exceeded the approved provisional federal indirect cost rate of 22%; and was ultimately reported as administration costs within other costs for the grant, which exceeded the CSBG budget line without obtaining approval from the applicable funding agencies. Criteria: On November 13, 2023, the Department of Health and Human Services approved a provisional indirect cost rate of 22% to be applied to total direct salaries and fringe benefit costs related to all federal programs. This rate is applicable to SMTCCAC’s grants, contract, and other agreements covered by 2 CFR 200 for the period effective from December 1, 2020 to June 30, 2024. According to the approved rate agreement, if any federal contract, grant, or other agreement is reimbursing indirect costs by a means other than the approved rate in this agreement, the organization should (1) credit such costs to the affected programs, and (2) apply the approved rate to the appropriate base to identify the proper amount of indirect costs allocable to these programs. Cause: SMTCCAC allocated general and administration costs to the grant based on its monthly calculated indirect cost rate per program, rather than allocating indirect costs to programs which should not exceed the approved provisional rate of 22%. For FY2023, SMTCCAC calculated an actual indirect cost rate of 57.48% and the excess above the approved provisional rate of 22% was charged to CSBG program for all programs. These excess costs were not within the approved budget for the category administration costs. Effect: SMTCCAC allocated indirect costs for programs in excess of the approved provisional rate to the Community Services Block Grant. These costs were in excess of the budget for administration costs, although within the aggregate budget total. Questioned Costs: Based on our assessment using the approved provisional rate, SMTCCAC overallocated indirect costs to the CSBG grant by $385,819, which exceeded the CSBG budget line category for administration costs. Recommendation: We recommend that SMTCCAC ensures compliance with the cost principles in 2 CFR Part 200, Subpart E, adhere to the approved federal indirect cost rate agreement, and properly apply either the actual annual indirect cost rate or the approved federal rate, whichever is lower, when determining indirect costs charged to federal awards. In addition, other general and administrative costs charged to CSBG should be within an approved budget for the costs.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.

Finding Reference: 2023-004 Prior Year Finding: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2023 would be due on March 31, 2024. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.