Audit 34902

FY End

2022-12-31

Total Expended

$2.22M

Findings

4

Programs

3

Organization: Technology for Rural Enhancement of Communities (SD)

Year: 2022 Accepted: 2023-09-24

Auditor: Ketel Thorstenson LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
34202	2022-001	Material Weakness	-	L
34203	2022-001	Material Weakness	-	L
610644	2022-001	Material Weakness	-	L
610645	2022-001	Material Weakness	-	L

ALN	Program	Spent	Major	Findings
10.766	Community Facilities Loans and Grants	$136,134	-	0
93.600	Head Start	$113,445	Yes	1
10.555	National School Lunch Program	$31,778	-	0

Contacts

Name	Title	Type
MXNAS3U9ULC7	Dorothy Richards	Auditee
6057238837	Jean Schroeder	Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awardactivity of the Organization under programs of the federal government for the year ended December 31, 2022.The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code ofFederal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selectedportion of the operations of the Organization, it is not intended to and does not present the financial positions,changes in net assets, or cash flows of the Organization. The Schedule of Expenditures of Federal Awards is presented on the accrual basis of accounting. Suchexpenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certaintypes of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. COMMUNITY FACILITIES LOANS AND GRANTS (10.766) - Balances outstanding at the end of the audit period were 132289.

Title: Cash Received Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awardactivity of the Organization under programs of the federal government for the year ended December 31, 2022.The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code ofFederal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selectedportion of the operations of the Organization, it is not intended to and does not present the financial positions,changes in net assets, or cash flows of the Organization. The Schedule of Expenditures of Federal Awards is presented on the accrual basis of accounting. Suchexpenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certaintypes of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The amounts for the National School Lunch Program reflect cash received. Federal reimbursements are basedon approved rates for services provided rather than reimbursement for specific expenditures.

Finding Details

Finding 2022-001

#2022-001 FINDING: Audit and Schedule of Expenditures of Federal Awards (SEFA) Financial Statement Preparation and Adjustments Federal Program Affected: Head Start/ALN #93.600 Compliance Requirement: Reporting Questioned Costs: N/A Condition and Cause: Turnover occurred in the third-party accountant used to adjust the accounting records to full accrual basis and assist with audit preparation. As such, the Organization requested we draft the audited financial statements and related footnote disclosures and perform certain adjusting entries in addition to our regular audit services. As a result, we proposed material audit and SEFA adjustments, had minor reconciling differences, and prepared the Organization?s SEFA and financial statements. Criteria and Effect: These adjustments were not identified as a result of the Organization?s existing internal controls, and therefore, could have resulted in a material misstatement of the Organization?s financial statements or noncompliance with the federal programs. It also resulted in significant additional audit time and expense. Repeat Finding from Prior Year: No Recommendation: We recommend the Organization hire a third party with adequate accrual accounting experience to prepare year-end accruals, reconcile accounts, and prepare the SEFA and financial statements. Management should also review the financial statements for accuracy at year-end. Response/Corrective Action Plan: The Organization agrees with the above finding. See Corrective Action Plan.

Finding 2022-001

#2022-001 FINDING: Audit and Schedule of Expenditures of Federal Awards (SEFA) Financial Statement Preparation and Adjustments Federal Program Affected: Head Start/ALN #93.600 Compliance Requirement: Reporting Questioned Costs: N/A Condition and Cause: Turnover occurred in the third-party accountant used to adjust the accounting records to full accrual basis and assist with audit preparation. As such, the Organization requested we draft the audited financial statements and related footnote disclosures and perform certain adjusting entries in addition to our regular audit services. As a result, we proposed material audit and SEFA adjustments, had minor reconciling differences, and prepared the Organization?s SEFA and financial statements. Criteria and Effect: These adjustments were not identified as a result of the Organization?s existing internal controls, and therefore, could have resulted in a material misstatement of the Organization?s financial statements or noncompliance with the federal programs. It also resulted in significant additional audit time and expense. Repeat Finding from Prior Year: No Recommendation: We recommend the Organization hire a third party with adequate accrual accounting experience to prepare year-end accruals, reconcile accounts, and prepare the SEFA and financial statements. Management should also review the financial statements for accuracy at year-end. Response/Corrective Action Plan: The Organization agrees with the above finding. See Corrective Action Plan.

Finding 2022-001

#2022-001 FINDING: Audit and Schedule of Expenditures of Federal Awards (SEFA) Financial Statement Preparation and Adjustments Federal Program Affected: Head Start/ALN #93.600 Compliance Requirement: Reporting Questioned Costs: N/A Condition and Cause: Turnover occurred in the third-party accountant used to adjust the accounting records to full accrual basis and assist with audit preparation. As such, the Organization requested we draft the audited financial statements and related footnote disclosures and perform certain adjusting entries in addition to our regular audit services. As a result, we proposed material audit and SEFA adjustments, had minor reconciling differences, and prepared the Organization?s SEFA and financial statements. Criteria and Effect: These adjustments were not identified as a result of the Organization?s existing internal controls, and therefore, could have resulted in a material misstatement of the Organization?s financial statements or noncompliance with the federal programs. It also resulted in significant additional audit time and expense. Repeat Finding from Prior Year: No Recommendation: We recommend the Organization hire a third party with adequate accrual accounting experience to prepare year-end accruals, reconcile accounts, and prepare the SEFA and financial statements. Management should also review the financial statements for accuracy at year-end. Response/Corrective Action Plan: The Organization agrees with the above finding. See Corrective Action Plan.

Finding 2022-001

#2022-001 FINDING: Audit and Schedule of Expenditures of Federal Awards (SEFA) Financial Statement Preparation and Adjustments Federal Program Affected: Head Start/ALN #93.600 Compliance Requirement: Reporting Questioned Costs: N/A Condition and Cause: Turnover occurred in the third-party accountant used to adjust the accounting records to full accrual basis and assist with audit preparation. As such, the Organization requested we draft the audited financial statements and related footnote disclosures and perform certain adjusting entries in addition to our regular audit services. As a result, we proposed material audit and SEFA adjustments, had minor reconciling differences, and prepared the Organization?s SEFA and financial statements. Criteria and Effect: These adjustments were not identified as a result of the Organization?s existing internal controls, and therefore, could have resulted in a material misstatement of the Organization?s financial statements or noncompliance with the federal programs. It also resulted in significant additional audit time and expense. Repeat Finding from Prior Year: No Recommendation: We recommend the Organization hire a third party with adequate accrual accounting experience to prepare year-end accruals, reconcile accounts, and prepare the SEFA and financial statements. Management should also review the financial statements for accuracy at year-end. Response/Corrective Action Plan: The Organization agrees with the above finding. See Corrective Action Plan.