Audit 348039

Condition: One contractor was selected for testing procurement, suspension, and debarment. Our test work indicated that there was no documentation for the verification of suspension and debarment for the contractor selected for testing. Criteria: Suspension and debarment regulations under 2 CFR should be followed. Cause: Procedures were not consistently implemented to verify if vendors contracted with the Foundation related to the federal program in excess of $25,000 are not suspended, debarred or otherwise excluded from doing business. Effect: Noncompliance with the federal award program’s suspension and debarment compliance requirements could occur and not be detected and corrected timely. Recommendation: We noted that management implemented procedures to address suspension and debarment toward the end of the fiscal year. We recommend that the Foundation ensure the established procedures are consistently followed and documented for all contracts entered into using federal awards. Views of Responsible Officials and Planned Corrective Actions: The Foundation has consistently maintained procedures to verify whether an organization is suspended or debarred and the enhanced process of documenting these procedures as recommended during the prior year audit was implemented by the Foundation during 2024.

Condition: A sample of four (4) drawdowns were selected for testing cash management procedures. While we noted the drawdowns were adequately supported by documentation of expenses, our test work found that there was no documentation of management approval of drawdowns before the drawdown occurred. Criteria: The Uniform Guidance requires organizations who receive funds on a cost reimbursement basis to draw down funds based on allowable expenditures under the grant. Cause: Implementation of policies and procedures regarding approval of drawdowns was not consistent throughout the fiscal year. Effect: Noncompliance with the federal award program’s cash management compliance requirements could occur and not be detected and corrected timely. Recommendation: We noted that management established policies and procedures toward the end of the fiscal year to ensure drawdowns were approved prior to the drawdown occurring. We recommend that the Foundation ensure the recently implemented procedures for approval of drawdowns are consistently documented. Views of Responsible Officials and Planned Corrective Actions: While all drawdown amounts were in alignment with incurred expenses, the Foundation recognizes the importance of maintaining proper documentation to ensure compliance with federal cash management requirements. The Foundation has established a formal practice requiring documented management approval for all drawdowns before they are initiated.

Condition: Our test work over the reporting compliance requirement included a sample of financial and performance reports. We noted that one financial report and one performance report did not have a documented review prior to submission. Criteria: The Uniform Guidance requires organizations to establish internal controls to detect potential noncompliance. Cause: Policies and procedures regarding retention of review documentation were not consistently applied. Effect: Noncompliance with adequate review over required financial and program reports. Recommendation: We noted that management established procedures to document the review and approval of the required financial and performance reports toward the end of the fiscal year. We recommend those procedures are consistently applied. Views of Responsible Officials and Planned Corrective Actions: The Foundation has established a formal review and approval process for all financial and performance reports prior to submission. This process includes requiring documented management review and approval, which will be retained for audit purposes as well as training to be provided to staff involved in grant reporting.

Condition: One contractor was selected for testing procurement, suspension, and debarment. Our test work indicated that there was no documentation for the verification of suspension and debarment for the contractor selected for testing. Criteria: Suspension and debarment regulations under 2 CFR should be followed. Cause: Procedures were not consistently implemented to verify if vendors contracted with the Foundation related to the federal program in excess of $25,000 are not suspended, debarred or otherwise excluded from doing business. Effect: Noncompliance with the federal award program’s suspension and debarment compliance requirements could occur and not be detected and corrected timely. Recommendation: We noted that management implemented procedures to address suspension and debarment toward the end of the fiscal year. We recommend that the Foundation ensure the established procedures are consistently followed and documented for all contracts entered into using federal awards. Views of Responsible Officials and Planned Corrective Actions: The Foundation has consistently maintained procedures to verify whether an organization is suspended or debarred and the enhanced process of documenting these procedures as recommended during the prior year audit was implemented by the Foundation during 2024.

Condition: A sample of four (4) drawdowns were selected for testing cash management procedures. While we noted the drawdowns were adequately supported by documentation of expenses, our test work found that there was no documentation of management approval of drawdowns before the drawdown occurred. Criteria: The Uniform Guidance requires organizations who receive funds on a cost reimbursement basis to draw down funds based on allowable expenditures under the grant. Cause: Implementation of policies and procedures regarding approval of drawdowns was not consistent throughout the fiscal year. Effect: Noncompliance with the federal award program’s cash management compliance requirements could occur and not be detected and corrected timely. Recommendation: We noted that management established policies and procedures toward the end of the fiscal year to ensure drawdowns were approved prior to the drawdown occurring. We recommend that the Foundation ensure the recently implemented procedures for approval of drawdowns are consistently documented. Views of Responsible Officials and Planned Corrective Actions: While all drawdown amounts were in alignment with incurred expenses, the Foundation recognizes the importance of maintaining proper documentation to ensure compliance with federal cash management requirements. The Foundation has established a formal practice requiring documented management approval for all drawdowns before they are initiated.

Condition: Our test work over the reporting compliance requirement included a sample of financial and performance reports. We noted that one financial report and one performance report did not have a documented review prior to submission. Criteria: The Uniform Guidance requires organizations to establish internal controls to detect potential noncompliance. Cause: Policies and procedures regarding retention of review documentation were not consistently applied. Effect: Noncompliance with adequate review over required financial and program reports. Recommendation: We noted that management established procedures to document the review and approval of the required financial and performance reports toward the end of the fiscal year. We recommend those procedures are consistently applied. Views of Responsible Officials and Planned Corrective Actions: The Foundation has established a formal review and approval process for all financial and performance reports prior to submission. This process includes requiring documented management review and approval, which will be retained for audit purposes as well as training to be provided to staff involved in grant reporting.