2023-002: Material Weakness: Preparation of Schedule of Expenditures of Federal Awards
Criteria: The Code of Federal Regulations (CFR) section 200.510 (b) states that, the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee's financial statements and must include the total federal awards expended as determined in accordance with section 200.502- Financial Management and must include at minimum the following: (1) list of individual federal programs by federal agency (2) for federal awards received as a subrecipient, the name and number of the pass-through entity (3) federal awards expended for each individual federal program and the Assistance Listings Number (4) include the total amount provided to subrecipients from each Federal program. (5) include notes that describe significant accounting policies used in preparing the schedule, loan or loan guarantee programs, and whether the auditee elected to use the 10% de minimis cost rate.
Financial management section 200.502 (a) states that the auditee’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. (b) The financial management system must provide for the following: (1) identification of all federal awards received and expended (2) accurate, current, and complete disclosure of the financial results of each federal award or program (3) records that identify adequately the source and application of funds for federally-funded activities (4) effective control over, and accountability for, all funds, property, and other assets (5) comparison of expenditures with budget amounts for each Federal award (6) written procedures to implement the requirements of section 200.305 (7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the federal award.
Condition: During the audit of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed, therefore did not include the required federal award information and did not report all 2023 federal awards and related expenditures.
Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that the SEFA is reconciled at year-end and that the schedule includes all federal awards and related expenditures.
Effect: Audit procedures identified additional federal award expenditures and adjustments were required to be made to the final SEFA.
Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to ensure that federal expenditures are tracked in a manner that reflects that federal funds have been used and reported in accordance with federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-003- Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of federal expenditures, we noted that certain expenses were not
allowable activities under uniform guidance.
Cause: Internal controls surrounding the review of supporting documentation of expenditures
charged to grants are not properly implemented to detect and correct errors.
Effect: The Organization received reimbursement for unallowable expenditures.
Questioned Costs: ALN 84.287 - $938
ALN 84.215J - $620
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-004: Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing, we noted that expenditures were allocated to the wrong budget
category line items and did not agree to the underlying accounting records.
Cause: Internal controls surrounding the review and reconciliation of supporting documentation
to expenditures charged to the grant are not properly implemented to detect and correct errors.
Effect: The costs submitted and reimbursed by the grantors did not agree to the budget
categories set forth in the grant agreement, therefore the underlying accounting records were not
consistent with what was being reported to the grantors.
Questioned Costs: None
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-005 - Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: The Organization is required to have procedures in place to ensure that federal awards
are expended for allowable costs in accordance with Subpart E - Cost Principles of Uniform
Guidance. The CFR section 200.303 (i) states that, charges to Federal awards for salaries and
wages must be based on records that accurately reflect the work performed. These records must
be supported by a system of internal control which provides reasonable assurance that the
charges are accurate, allowable, and properly allocated.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of payroll costs, we noted that (1) the Organization’s
documentation of time and effort related to the Federal programs did not agree to personnel costs
charged to the Federal program (2) the Organization did not properly review and reconcile time
and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the
grant were allowable costs.
Cause: Internal controls surrounding the tracking and review of payroll expenditures charged to
Federal programs were not properly implemented to detect and correct errors. Additionally, the
grant related payroll tracking was a manual process during 2023, therefore increasing the
possibility of error.
Effect: The Organization did not properly review and reconcile time and effort records to payroll
costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs.
Questioned Costs: ALN 84.287 - $3,905
ALN 84.215J - $8,130
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that time records are
reviewed and reconciled to payroll expenditures being charged to the Federal program.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-002: Material Weakness: Preparation of Schedule of Expenditures of Federal Awards
Criteria: The Code of Federal Regulations (CFR) section 200.510 (b) states that, the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee's financial statements and must include the total federal awards expended as determined in accordance with section 200.502- Financial Management and must include at minimum the following: (1) list of individual federal programs by federal agency (2) for federal awards received as a subrecipient, the name and number of the pass-through entity (3) federal awards expended for each individual federal program and the Assistance Listings Number (4) include the total amount provided to subrecipients from each Federal program. (5) include notes that describe significant accounting policies used in preparing the schedule, loan or loan guarantee programs, and whether the auditee elected to use the 10% de minimis cost rate.
Financial management section 200.502 (a) states that the auditee’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. (b) The financial management system must provide for the following: (1) identification of all federal awards received and expended (2) accurate, current, and complete disclosure of the financial results of each federal award or program (3) records that identify adequately the source and application of funds for federally-funded activities (4) effective control over, and accountability for, all funds, property, and other assets (5) comparison of expenditures with budget amounts for each Federal award (6) written procedures to implement the requirements of section 200.305 (7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the federal award.
Condition: During the audit of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed, therefore did not include the required federal award information and did not report all 2023 federal awards and related expenditures.
Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that the SEFA is reconciled at year-end and that the schedule includes all federal awards and related expenditures.
Effect: Audit procedures identified additional federal award expenditures and adjustments were required to be made to the final SEFA.
Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to ensure that federal expenditures are tracked in a manner that reflects that federal funds have been used and reported in accordance with federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-003- Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of federal expenditures, we noted that certain expenses were not
allowable activities under uniform guidance.
Cause: Internal controls surrounding the review of supporting documentation of expenditures
charged to grants are not properly implemented to detect and correct errors.
Effect: The Organization received reimbursement for unallowable expenditures.
Questioned Costs: ALN 84.287 - $938
ALN 84.215J - $620
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-004: Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing, we noted that expenditures were allocated to the wrong budget
category line items and did not agree to the underlying accounting records.
Cause: Internal controls surrounding the review and reconciliation of supporting documentation
to expenditures charged to the grant are not properly implemented to detect and correct errors.
Effect: The costs submitted and reimbursed by the grantors did not agree to the budget
categories set forth in the grant agreement, therefore the underlying accounting records were not
consistent with what was being reported to the grantors.
Questioned Costs: None
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-005 - Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: The Organization is required to have procedures in place to ensure that federal awards
are expended for allowable costs in accordance with Subpart E - Cost Principles of Uniform
Guidance. The CFR section 200.303 (i) states that, charges to Federal awards for salaries and
wages must be based on records that accurately reflect the work performed. These records must
be supported by a system of internal control which provides reasonable assurance that the
charges are accurate, allowable, and properly allocated.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of payroll costs, we noted that (1) the Organization’s
documentation of time and effort related to the Federal programs did not agree to personnel costs
charged to the Federal program (2) the Organization did not properly review and reconcile time
and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the
grant were allowable costs.
Cause: Internal controls surrounding the tracking and review of payroll expenditures charged to
Federal programs were not properly implemented to detect and correct errors. Additionally, the
grant related payroll tracking was a manual process during 2023, therefore increasing the
possibility of error.
Effect: The Organization did not properly review and reconcile time and effort records to payroll
costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs.
Questioned Costs: ALN 84.287 - $3,905
ALN 84.215J - $8,130
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that time records are
reviewed and reconciled to payroll expenditures being charged to the Federal program.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-002: Material Weakness: Preparation of Schedule of Expenditures of Federal Awards
Criteria: The Code of Federal Regulations (CFR) section 200.510 (b) states that, the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee's financial statements and must include the total federal awards expended as determined in accordance with section 200.502- Financial Management and must include at minimum the following: (1) list of individual federal programs by federal agency (2) for federal awards received as a subrecipient, the name and number of the pass-through entity (3) federal awards expended for each individual federal program and the Assistance Listings Number (4) include the total amount provided to subrecipients from each Federal program. (5) include notes that describe significant accounting policies used in preparing the schedule, loan or loan guarantee programs, and whether the auditee elected to use the 10% de minimis cost rate.
Financial management section 200.502 (a) states that the auditee’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. (b) The financial management system must provide for the following: (1) identification of all federal awards received and expended (2) accurate, current, and complete disclosure of the financial results of each federal award or program (3) records that identify adequately the source and application of funds for federally-funded activities (4) effective control over, and accountability for, all funds, property, and other assets (5) comparison of expenditures with budget amounts for each Federal award (6) written procedures to implement the requirements of section 200.305 (7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the federal award.
Condition: During the audit of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed, therefore did not include the required federal award information and did not report all 2023 federal awards and related expenditures.
Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that the SEFA is reconciled at year-end and that the schedule includes all federal awards and related expenditures.
Effect: Audit procedures identified additional federal award expenditures and adjustments were required to be made to the final SEFA.
Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to ensure that federal expenditures are tracked in a manner that reflects that federal funds have been used and reported in accordance with federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-003- Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of federal expenditures, we noted that certain expenses were not
allowable activities under uniform guidance.
Cause: Internal controls surrounding the review of supporting documentation of expenditures
charged to grants are not properly implemented to detect and correct errors.
Effect: The Organization received reimbursement for unallowable expenditures.
Questioned Costs: ALN 84.287 - $938
ALN 84.215J - $620
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-004: Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing, we noted that expenditures were allocated to the wrong budget
category line items and did not agree to the underlying accounting records.
Cause: Internal controls surrounding the review and reconciliation of supporting documentation
to expenditures charged to the grant are not properly implemented to detect and correct errors.
Effect: The costs submitted and reimbursed by the grantors did not agree to the budget
categories set forth in the grant agreement, therefore the underlying accounting records were not
consistent with what was being reported to the grantors.
Questioned Costs: None
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-005 - Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: The Organization is required to have procedures in place to ensure that federal awards
are expended for allowable costs in accordance with Subpart E - Cost Principles of Uniform
Guidance. The CFR section 200.303 (i) states that, charges to Federal awards for salaries and
wages must be based on records that accurately reflect the work performed. These records must
be supported by a system of internal control which provides reasonable assurance that the
charges are accurate, allowable, and properly allocated.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of payroll costs, we noted that (1) the Organization’s
documentation of time and effort related to the Federal programs did not agree to personnel costs
charged to the Federal program (2) the Organization did not properly review and reconcile time
and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the
grant were allowable costs.
Cause: Internal controls surrounding the tracking and review of payroll expenditures charged to
Federal programs were not properly implemented to detect and correct errors. Additionally, the
grant related payroll tracking was a manual process during 2023, therefore increasing the
possibility of error.
Effect: The Organization did not properly review and reconcile time and effort records to payroll
costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs.
Questioned Costs: ALN 84.287 - $3,905
ALN 84.215J - $8,130
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that time records are
reviewed and reconciled to payroll expenditures being charged to the Federal program.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-002: Material Weakness: Preparation of Schedule of Expenditures of Federal Awards
Criteria: The Code of Federal Regulations (CFR) section 200.510 (b) states that, the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee's financial statements and must include the total federal awards expended as determined in accordance with section 200.502- Financial Management and must include at minimum the following: (1) list of individual federal programs by federal agency (2) for federal awards received as a subrecipient, the name and number of the pass-through entity (3) federal awards expended for each individual federal program and the Assistance Listings Number (4) include the total amount provided to subrecipients from each Federal program. (5) include notes that describe significant accounting policies used in preparing the schedule, loan or loan guarantee programs, and whether the auditee elected to use the 10% de minimis cost rate.
Financial management section 200.502 (a) states that the auditee’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. (b) The financial management system must provide for the following: (1) identification of all federal awards received and expended (2) accurate, current, and complete disclosure of the financial results of each federal award or program (3) records that identify adequately the source and application of funds for federally-funded activities (4) effective control over, and accountability for, all funds, property, and other assets (5) comparison of expenditures with budget amounts for each Federal award (6) written procedures to implement the requirements of section 200.305 (7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the federal award.
Condition: During the audit of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed, therefore did not include the required federal award information and did not report all 2023 federal awards and related expenditures.
Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that the SEFA is reconciled at year-end and that the schedule includes all federal awards and related expenditures.
Effect: Audit procedures identified additional federal award expenditures and adjustments were required to be made to the final SEFA.
Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to ensure that federal expenditures are tracked in a manner that reflects that federal funds have been used and reported in accordance with federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-003- Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of federal expenditures, we noted that certain expenses were not
allowable activities under uniform guidance.
Cause: Internal controls surrounding the review of supporting documentation of expenditures
charged to grants are not properly implemented to detect and correct errors.
Effect: The Organization received reimbursement for unallowable expenditures.
Questioned Costs: ALN 84.287 - $938
ALN 84.215J - $620
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-004: Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing, we noted that expenditures were allocated to the wrong budget
category line items and did not agree to the underlying accounting records.
Cause: Internal controls surrounding the review and reconciliation of supporting documentation
to expenditures charged to the grant are not properly implemented to detect and correct errors.
Effect: The costs submitted and reimbursed by the grantors did not agree to the budget
categories set forth in the grant agreement, therefore the underlying accounting records were not
consistent with what was being reported to the grantors.
Questioned Costs: None
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-005 - Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: The Organization is required to have procedures in place to ensure that federal awards
are expended for allowable costs in accordance with Subpart E - Cost Principles of Uniform
Guidance. The CFR section 200.303 (i) states that, charges to Federal awards for salaries and
wages must be based on records that accurately reflect the work performed. These records must
be supported by a system of internal control which provides reasonable assurance that the
charges are accurate, allowable, and properly allocated.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of payroll costs, we noted that (1) the Organization’s
documentation of time and effort related to the Federal programs did not agree to personnel costs
charged to the Federal program (2) the Organization did not properly review and reconcile time
and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the
grant were allowable costs.
Cause: Internal controls surrounding the tracking and review of payroll expenditures charged to
Federal programs were not properly implemented to detect and correct errors. Additionally, the
grant related payroll tracking was a manual process during 2023, therefore increasing the
possibility of error.
Effect: The Organization did not properly review and reconcile time and effort records to payroll
costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs.
Questioned Costs: ALN 84.287 - $3,905
ALN 84.215J - $8,130
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that time records are
reviewed and reconciled to payroll expenditures being charged to the Federal program.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-002: Material Weakness: Preparation of Schedule of Expenditures of Federal Awards
Criteria: The Code of Federal Regulations (CFR) section 200.510 (b) states that, the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee's financial statements and must include the total federal awards expended as determined in accordance with section 200.502- Financial Management and must include at minimum the following: (1) list of individual federal programs by federal agency (2) for federal awards received as a subrecipient, the name and number of the pass-through entity (3) federal awards expended for each individual federal program and the Assistance Listings Number (4) include the total amount provided to subrecipients from each Federal program. (5) include notes that describe significant accounting policies used in preparing the schedule, loan or loan guarantee programs, and whether the auditee elected to use the 10% de minimis cost rate.
Financial management section 200.502 (a) states that the auditee’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. (b) The financial management system must provide for the following: (1) identification of all federal awards received and expended (2) accurate, current, and complete disclosure of the financial results of each federal award or program (3) records that identify adequately the source and application of funds for federally-funded activities (4) effective control over, and accountability for, all funds, property, and other assets (5) comparison of expenditures with budget amounts for each Federal award (6) written procedures to implement the requirements of section 200.305 (7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the federal award.
Condition: During the audit of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed, therefore did not include the required federal award information and did not report all 2023 federal awards and related expenditures.
Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that the SEFA is reconciled at year-end and that the schedule includes all federal awards and related expenditures.
Effect: Audit procedures identified additional federal award expenditures and adjustments were required to be made to the final SEFA.
Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to ensure that federal expenditures are tracked in a manner that reflects that federal funds have been used and reported in accordance with federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-003- Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of federal expenditures, we noted that certain expenses were not
allowable activities under uniform guidance.
Cause: Internal controls surrounding the review of supporting documentation of expenditures
charged to grants are not properly implemented to detect and correct errors.
Effect: The Organization received reimbursement for unallowable expenditures.
Questioned Costs: ALN 84.287 - $938
ALN 84.215J - $620
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-004: Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing, we noted that expenditures were allocated to the wrong budget
category line items and did not agree to the underlying accounting records.
Cause: Internal controls surrounding the review and reconciliation of supporting documentation
to expenditures charged to the grant are not properly implemented to detect and correct errors.
Effect: The costs submitted and reimbursed by the grantors did not agree to the budget
categories set forth in the grant agreement, therefore the underlying accounting records were not
consistent with what was being reported to the grantors.
Questioned Costs: None
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-005 - Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: The Organization is required to have procedures in place to ensure that federal awards
are expended for allowable costs in accordance with Subpart E - Cost Principles of Uniform
Guidance. The CFR section 200.303 (i) states that, charges to Federal awards for salaries and
wages must be based on records that accurately reflect the work performed. These records must
be supported by a system of internal control which provides reasonable assurance that the
charges are accurate, allowable, and properly allocated.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of payroll costs, we noted that (1) the Organization’s
documentation of time and effort related to the Federal programs did not agree to personnel costs
charged to the Federal program (2) the Organization did not properly review and reconcile time
and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the
grant were allowable costs.
Cause: Internal controls surrounding the tracking and review of payroll expenditures charged to
Federal programs were not properly implemented to detect and correct errors. Additionally, the
grant related payroll tracking was a manual process during 2023, therefore increasing the
possibility of error.
Effect: The Organization did not properly review and reconcile time and effort records to payroll
costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs.
Questioned Costs: ALN 84.287 - $3,905
ALN 84.215J - $8,130
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that time records are
reviewed and reconciled to payroll expenditures being charged to the Federal program.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-002: Material Weakness: Preparation of Schedule of Expenditures of Federal Awards
Criteria: The Code of Federal Regulations (CFR) section 200.510 (b) states that, the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee's financial statements and must include the total federal awards expended as determined in accordance with section 200.502- Financial Management and must include at minimum the following: (1) list of individual federal programs by federal agency (2) for federal awards received as a subrecipient, the name and number of the pass-through entity (3) federal awards expended for each individual federal program and the Assistance Listings Number (4) include the total amount provided to subrecipients from each Federal program. (5) include notes that describe significant accounting policies used in preparing the schedule, loan or loan guarantee programs, and whether the auditee elected to use the 10% de minimis cost rate.
Financial management section 200.502 (a) states that the auditee’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. (b) The financial management system must provide for the following: (1) identification of all federal awards received and expended (2) accurate, current, and complete disclosure of the financial results of each federal award or program (3) records that identify adequately the source and application of funds for federally-funded activities (4) effective control over, and accountability for, all funds, property, and other assets (5) comparison of expenditures with budget amounts for each Federal award (6) written procedures to implement the requirements of section 200.305 (7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the federal award.
Condition: During the audit of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed, therefore did not include the required federal award information and did not report all 2023 federal awards and related expenditures.
Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that the SEFA is reconciled at year-end and that the schedule includes all federal awards and related expenditures.
Effect: Audit procedures identified additional federal award expenditures and adjustments were required to be made to the final SEFA.
Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to ensure that federal expenditures are tracked in a manner that reflects that federal funds have been used and reported in accordance with federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-003- Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of federal expenditures, we noted that certain expenses were not
allowable activities under uniform guidance.
Cause: Internal controls surrounding the review of supporting documentation of expenditures
charged to grants are not properly implemented to detect and correct errors.
Effect: The Organization received reimbursement for unallowable expenditures.
Questioned Costs: ALN 84.287 - $938
ALN 84.215J - $620
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-004: Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow
the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing, we noted that expenditures were allocated to the wrong budget
category line items and did not agree to the underlying accounting records.
Cause: Internal controls surrounding the review and reconciliation of supporting documentation
to expenditures charged to the grant are not properly implemented to detect and correct errors.
Effect: The costs submitted and reimbursed by the grantors did not agree to the budget
categories set forth in the grant agreement, therefore the underlying accounting records were not
consistent with what was being reported to the grantors.
Questioned Costs: None
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that expenditures are
allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.
2023-005 - Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles
Criteria: The Organization is required to have procedures in place to ensure that federal awards
are expended for allowable costs in accordance with Subpart E - Cost Principles of Uniform
Guidance. The CFR section 200.303 (i) states that, charges to Federal awards for salaries and
wages must be based on records that accurately reflect the work performed. These records must
be supported by a system of internal control which provides reasonable assurance that the
charges are accurate, allowable, and properly allocated.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition: During our testing of payroll costs, we noted that (1) the Organization’s
documentation of time and effort related to the Federal programs did not agree to personnel costs
charged to the Federal program (2) the Organization did not properly review and reconcile time
and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the
grant were allowable costs.
Cause: Internal controls surrounding the tracking and review of payroll expenditures charged to
Federal programs were not properly implemented to detect and correct errors. Additionally, the
grant related payroll tracking was a manual process during 2023, therefore increasing the
possibility of error.
Effect: The Organization did not properly review and reconcile time and effort records to payroll
costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs.
Questioned Costs: ALN 84.287 - $3,905
ALN 84.215J - $8,130
Recommendation: We recommend that management of the Organization review internal
controls and ensure they are properly designed and implemented to ensure that time records are
reviewed and reconciled to payroll expenditures being charged to the Federal program.
Views of Responsible Officials: Management agrees with this finding and their response is
included in the corrective action plan.