2023-001 Schedule of Expenditures of Federal Awards (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: CFR Part 200.508 Audit Responsibilities state that the auditee must prepare the Schedule of Expenditures of Federal Awards, which must list individual federal awards by federal agency, including the total federal awards expended, name of pass-through entity, assistance listing number, and total amount provided to subrecipients. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare
the financial statements.
Condition: The Schedule of Expenditures of Federal Awards was prepared by the auditor based on federal award contracts provided by auditee. Auditee was not aware of federal sources of funding.
Cause: Management has limited knowledge on requirements of a Single Audit. Management relied on auditors to prepare the Schedule of Expenditures of Federal Awards.
Effect: Potential understatement or overstatement of expenditures could exist in the Schedule of Expenditures of Federal Awards and not be detected or corrected.
Questioned Costs: None noted.
Recommendation: Establish procedures to prepare the annual Schedule of Expenditures of Federal Awards and reconcile amounts reported to the Organization's general ledger. The Organization should provide appropriate training to staff who work with government funding.
Views of Responsible Officials and Planned Corrective Actions: The Organization will prepare a current Scheduel of Expenditures of Federal Awards, listing awards by federal agency, total federal awards expended, name of pass-through entity, assistance listing number, and total amount provided to subrecipients. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is April 15, 2025.
2023-001 Schedule of Expenditures of Federal Awards (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: CFR Part 200.508 Audit Responsibilities state that the auditee must prepare the Schedule of Expenditures of Federal Awards, which must list individual federal awards by federal agency, including the total federal awards expended, name of pass-through entity, assistance listing number, and total amount provided to subrecipients. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare
the financial statements.
Condition: The Schedule of Expenditures of Federal Awards was prepared by the auditor based on federal award contracts provided by auditee. Auditee was not aware of federal sources of funding.
Cause: Management has limited knowledge on requirements of a Single Audit. Management relied on auditors to prepare the Schedule of Expenditures of Federal Awards.
Effect: Potential understatement or overstatement of expenditures could exist in the Schedule of Expenditures of Federal Awards and not be detected or corrected.
Questioned Costs: None noted.
Recommendation: Establish procedures to prepare the annual Schedule of Expenditures of Federal Awards and reconcile amounts reported to the Organization's general ledger. The Organization should provide appropriate training to staff who work with government funding.
Views of Responsible Officials and Planned Corrective Actions: The Organization will prepare a current Scheduel of Expenditures of Federal Awards, listing awards by federal agency, total federal awards expended, name of pass-through entity, assistance listing number, and total amount provided to subrecipients. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is April 15, 2025.
2023-002 Reporting (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: As part of agreements with the granting agency, the Organization is required to submit financial and performance reports throughout the grant period.
Condition: For all reports tested DWD asked to see support documentation for performance information reported. The Organization was not able to provide this information. Reports that included financial information did not foot and the information did not match the financials in the Organizations books and records. DWD also noted no evidence of a secondary review by management.
Cause: For performance reports, the individual in charge of collecting information left the Organization and that individual was the only one with access to this information. The reporting is done online, is not printed out and thus, no review is documented. For the financial information, the amounts pulled from QuickBooks were estimated by an employee no longer at the Organization and there was no recalculation or footing of the information. The reporting is done online, is not printed out and thus, no review is documented.
Effect: Failure to review reports may result in inaccurate financial and performance reporting to grantors.
Questioned Costs: None noted.
Recommendation: Appropriate policies and procedures should be established to ensure all reports have appropriate information and have been reviewed and approved by the appropriate level of management.
Views of Responsible Officials and Planned Corrective Actions: The Organization will establish policies and procedures for composing and reviewing financial and performance reports before submission to grantors, including electronic storage of all reports. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is May 31, 2025.
2023-002 Reporting (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: As part of agreements with the granting agency, the Organization is required to submit financial and performance reports throughout the grant period.
Condition: For all reports tested DWD asked to see support documentation for performance information reported. The Organization was not able to provide this information. Reports that included financial information did not foot and the information did not match the financials in the Organizations books and records. DWD also noted no evidence of a secondary review by management.
Cause: For performance reports, the individual in charge of collecting information left the Organization and that individual was the only one with access to this information. The reporting is done online, is not printed out and thus, no review is documented. For the financial information, the amounts pulled from QuickBooks were estimated by an employee no longer at the Organization and there was no recalculation or footing of the information. The reporting is done online, is not printed out and thus, no review is documented.
Effect: Failure to review reports may result in inaccurate financial and performance reporting to grantors.
Questioned Costs: None noted.
Recommendation: Appropriate policies and procedures should be established to ensure all reports have appropriate information and have been reviewed and approved by the appropriate level of management.
Views of Responsible Officials and Planned Corrective Actions: The Organization will establish policies and procedures for composing and reviewing financial and performance reports before submission to grantors, including electronic storage of all reports. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is May 31, 2025.
2023-003 Procurement (Significant Deficiency)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
Criteria: The Uniform Guidance required that an Organization have written procurement policies in place to comply with 2 CFR Sections 200.318-300.327 when procurement is applicable to a federal program. According to the compliance requirements matrix, procurement is applicable to ALN #21.027.
Condition: While testing the procurement compliance requirement we found that the Organization does not have a written procurement policy. We did not, however, find any evidence of material noncompliance related to this requirement. Cause: Management does not regularly expend federal dollars above the threshold requiring a Single Audit under the Uniform Guidance. As such, policies related to procurement were not adopted.
Effect: Internal controls surrounding Uniform Guidance are incomplete.
Questioned Costs: None noted.
Recommendation: Management should review 2 CFR Sections 200.138 – 300.327 and develop written policies that comply with the compliance requirements.
Views of Responsible Officials and Planned Corrective Actions: The Organization will review CFR Sections 200.138 and 300.327 and develop written policies that align with the compliance requirements. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is June 30, 2025.
2023-004 Allowable Costs (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
Criteria: The Uniform Guidance sets forth factors affecting allowability of costs. Except where otherwise
authorized by statute, costs must meet the certain criteria to be allowable under federal awards. CFR
200.403 (c) states that costs must be consistent with policies and procedures that apply uniformly to both
federally financed and other activities of the recipient or subrecipient. CFR200.403(g) states that the cost
must be adequately documented
Condition: There were multiple amounts paid for which the Organization was unable to supply appropriate documentation and invoices or receipts for which the Organization did not follow their policy for reviewing the invoices/receipts prior to payment.
Cause: The Organization uses Bill.com to make most payments. The payments made directly via an ACH with the bank do not have appropriate documentation maintained. There were also other payments for which the client was unable to locate the documents. There were also invoices/receipts that were not signed off prior to payment.
Effect: The Organization has policies in place for amounts paid through Bill.com, but these policies are not being used with other forms of payments.
Questioned Costs: $342.34. Questioned costs are made up of the total of all invoices tested that did not have appropriate documentation.
Recommendation: Organization should update policy and ensure that all payments made in any form have appropriate documentation. Also, the Organization should follow their stated policy on review of invoices prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization will update policy to ensure that all payments made in any form have appropriate documentation. Additionally, policy on review of invoices prior to payment will be reviewed by Executive Director and Business Manager. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is May 31, 2025.
2023-005 – Cost Allocations (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: Generally accepted accounting principles (GAAP), the IRS, and the Uniform Guidance (2 CFR 200.141) require nonprofit organizations to allocate expenses between three functions (program, management and general, and fundraising) on a reasonable basis that is consistently applied. The basis used should accurately distribute costs to a specific program or activity based on resource usage.
Condition: The Organization does not have a written cost allocation plan that clearly describes each overhead cost center and its allocable costs. The Organization uses a percent of revenue method to allocate costs, which may not be the most accurate approach, as it can sometimes unfairly distribute costs depending on the specific program or activity and its resource usage.
Cause: The Organization does not have a written cost allocation plan that clearly describes each overhead cost center and its allocable costs. The Organization uses a percentage of revenue to allocate salary, wages and benefits across programs which could cause too much expense to be allocated to a program with high revenue, but low costs.
Effect: The Organization uses a percentage of revenue method to allocate costs, which may not be the most accurate approach, as it can sometimes unfairly distribute costs depending on the specific program or activity and its resource usage.
Questioned Costs: None
Recommendation: We recommend the Organization develop and follow a policy that governs how they calculate and charge shared services to all funds. We recommend calculating time and effort for each individual working on more than one program, or on program and administrative or fundraising functions. This should be documented and approved by the Board of Directors. The plan should be consistently applied.
Views of Responsible Officials and Planned Corrective Actions: The Organization will develop, implement, and consistently apply a policy that governs how shared services are calculated and charged to all funds. This policy will be developed by the Executive Director, with the assistance of the DAC Finance Committee, and approved by the DAC Board of Directors. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is June 30, 2025.
2023-005 – Cost Allocations (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: Generally accepted accounting principles (GAAP), the IRS, and the Uniform Guidance (2 CFR 200.141) require nonprofit organizations to allocate expenses between three functions (program, management and general, and fundraising) on a reasonable basis that is consistently applied. The basis used should accurately distribute costs to a specific program or activity based on resource usage.
Condition: The Organization does not have a written cost allocation plan that clearly describes each overhead cost center and its allocable costs. The Organization uses a percent of revenue method to allocate costs, which may not be the most accurate approach, as it can sometimes unfairly distribute costs depending on the specific program or activity and its resource usage.
Cause: The Organization does not have a written cost allocation plan that clearly describes each overhead cost center and its allocable costs. The Organization uses a percentage of revenue to allocate salary, wages and benefits across programs which could cause too much expense to be allocated to a program with high revenue, but low costs.
Effect: The Organization uses a percentage of revenue method to allocate costs, which may not be the most accurate approach, as it can sometimes unfairly distribute costs depending on the specific program or activity and its resource usage.
Questioned Costs: None
Recommendation: We recommend the Organization develop and follow a policy that governs how they calculate and charge shared services to all funds. We recommend calculating time and effort for each individual working on more than one program, or on program and administrative or fundraising functions. This should be documented and approved by the Board of Directors. The plan should be consistently applied.
Views of Responsible Officials and Planned Corrective Actions: The Organization will develop, implement, and consistently apply a policy that governs how shared services are calculated and charged to all funds. This policy will be developed by the Executive Director, with the assistance of the DAC Finance Committee, and approved by the DAC Board of Directors. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is June 30, 2025.
2023-001 Schedule of Expenditures of Federal Awards (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: CFR Part 200.508 Audit Responsibilities state that the auditee must prepare the Schedule of Expenditures of Federal Awards, which must list individual federal awards by federal agency, including the total federal awards expended, name of pass-through entity, assistance listing number, and total amount provided to subrecipients. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare
the financial statements.
Condition: The Schedule of Expenditures of Federal Awards was prepared by the auditor based on federal award contracts provided by auditee. Auditee was not aware of federal sources of funding.
Cause: Management has limited knowledge on requirements of a Single Audit. Management relied on auditors to prepare the Schedule of Expenditures of Federal Awards.
Effect: Potential understatement or overstatement of expenditures could exist in the Schedule of Expenditures of Federal Awards and not be detected or corrected.
Questioned Costs: None noted.
Recommendation: Establish procedures to prepare the annual Schedule of Expenditures of Federal Awards and reconcile amounts reported to the Organization's general ledger. The Organization should provide appropriate training to staff who work with government funding.
Views of Responsible Officials and Planned Corrective Actions: The Organization will prepare a current Scheduel of Expenditures of Federal Awards, listing awards by federal agency, total federal awards expended, name of pass-through entity, assistance listing number, and total amount provided to subrecipients. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is April 15, 2025.
2023-001 Schedule of Expenditures of Federal Awards (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: CFR Part 200.508 Audit Responsibilities state that the auditee must prepare the Schedule of Expenditures of Federal Awards, which must list individual federal awards by federal agency, including the total federal awards expended, name of pass-through entity, assistance listing number, and total amount provided to subrecipients. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare
the financial statements.
Condition: The Schedule of Expenditures of Federal Awards was prepared by the auditor based on federal award contracts provided by auditee. Auditee was not aware of federal sources of funding.
Cause: Management has limited knowledge on requirements of a Single Audit. Management relied on auditors to prepare the Schedule of Expenditures of Federal Awards.
Effect: Potential understatement or overstatement of expenditures could exist in the Schedule of Expenditures of Federal Awards and not be detected or corrected.
Questioned Costs: None noted.
Recommendation: Establish procedures to prepare the annual Schedule of Expenditures of Federal Awards and reconcile amounts reported to the Organization's general ledger. The Organization should provide appropriate training to staff who work with government funding.
Views of Responsible Officials and Planned Corrective Actions: The Organization will prepare a current Scheduel of Expenditures of Federal Awards, listing awards by federal agency, total federal awards expended, name of pass-through entity, assistance listing number, and total amount provided to subrecipients. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is April 15, 2025.
2023-002 Reporting (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: As part of agreements with the granting agency, the Organization is required to submit financial and performance reports throughout the grant period.
Condition: For all reports tested DWD asked to see support documentation for performance information reported. The Organization was not able to provide this information. Reports that included financial information did not foot and the information did not match the financials in the Organizations books and records. DWD also noted no evidence of a secondary review by management.
Cause: For performance reports, the individual in charge of collecting information left the Organization and that individual was the only one with access to this information. The reporting is done online, is not printed out and thus, no review is documented. For the financial information, the amounts pulled from QuickBooks were estimated by an employee no longer at the Organization and there was no recalculation or footing of the information. The reporting is done online, is not printed out and thus, no review is documented.
Effect: Failure to review reports may result in inaccurate financial and performance reporting to grantors.
Questioned Costs: None noted.
Recommendation: Appropriate policies and procedures should be established to ensure all reports have appropriate information and have been reviewed and approved by the appropriate level of management.
Views of Responsible Officials and Planned Corrective Actions: The Organization will establish policies and procedures for composing and reviewing financial and performance reports before submission to grantors, including electronic storage of all reports. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is May 31, 2025.
2023-002 Reporting (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: As part of agreements with the granting agency, the Organization is required to submit financial and performance reports throughout the grant period.
Condition: For all reports tested DWD asked to see support documentation for performance information reported. The Organization was not able to provide this information. Reports that included financial information did not foot and the information did not match the financials in the Organizations books and records. DWD also noted no evidence of a secondary review by management.
Cause: For performance reports, the individual in charge of collecting information left the Organization and that individual was the only one with access to this information. The reporting is done online, is not printed out and thus, no review is documented. For the financial information, the amounts pulled from QuickBooks were estimated by an employee no longer at the Organization and there was no recalculation or footing of the information. The reporting is done online, is not printed out and thus, no review is documented.
Effect: Failure to review reports may result in inaccurate financial and performance reporting to grantors.
Questioned Costs: None noted.
Recommendation: Appropriate policies and procedures should be established to ensure all reports have appropriate information and have been reviewed and approved by the appropriate level of management.
Views of Responsible Officials and Planned Corrective Actions: The Organization will establish policies and procedures for composing and reviewing financial and performance reports before submission to grantors, including electronic storage of all reports. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is May 31, 2025.
2023-003 Procurement (Significant Deficiency)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
Criteria: The Uniform Guidance required that an Organization have written procurement policies in place to comply with 2 CFR Sections 200.318-300.327 when procurement is applicable to a federal program. According to the compliance requirements matrix, procurement is applicable to ALN #21.027.
Condition: While testing the procurement compliance requirement we found that the Organization does not have a written procurement policy. We did not, however, find any evidence of material noncompliance related to this requirement. Cause: Management does not regularly expend federal dollars above the threshold requiring a Single Audit under the Uniform Guidance. As such, policies related to procurement were not adopted.
Effect: Internal controls surrounding Uniform Guidance are incomplete.
Questioned Costs: None noted.
Recommendation: Management should review 2 CFR Sections 200.138 – 300.327 and develop written policies that comply with the compliance requirements.
Views of Responsible Officials and Planned Corrective Actions: The Organization will review CFR Sections 200.138 and 300.327 and develop written policies that align with the compliance requirements. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is June 30, 2025.
2023-004 Allowable Costs (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
Criteria: The Uniform Guidance sets forth factors affecting allowability of costs. Except where otherwise
authorized by statute, costs must meet the certain criteria to be allowable under federal awards. CFR
200.403 (c) states that costs must be consistent with policies and procedures that apply uniformly to both
federally financed and other activities of the recipient or subrecipient. CFR200.403(g) states that the cost
must be adequately documented
Condition: There were multiple amounts paid for which the Organization was unable to supply appropriate documentation and invoices or receipts for which the Organization did not follow their policy for reviewing the invoices/receipts prior to payment.
Cause: The Organization uses Bill.com to make most payments. The payments made directly via an ACH with the bank do not have appropriate documentation maintained. There were also other payments for which the client was unable to locate the documents. There were also invoices/receipts that were not signed off prior to payment.
Effect: The Organization has policies in place for amounts paid through Bill.com, but these policies are not being used with other forms of payments.
Questioned Costs: $342.34. Questioned costs are made up of the total of all invoices tested that did not have appropriate documentation.
Recommendation: Organization should update policy and ensure that all payments made in any form have appropriate documentation. Also, the Organization should follow their stated policy on review of invoices prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization will update policy to ensure that all payments made in any form have appropriate documentation. Additionally, policy on review of invoices prior to payment will be reviewed by Executive Director and Business Manager. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is May 31, 2025.
2023-005 – Cost Allocations (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: Generally accepted accounting principles (GAAP), the IRS, and the Uniform Guidance (2 CFR 200.141) require nonprofit organizations to allocate expenses between three functions (program, management and general, and fundraising) on a reasonable basis that is consistently applied. The basis used should accurately distribute costs to a specific program or activity based on resource usage.
Condition: The Organization does not have a written cost allocation plan that clearly describes each overhead cost center and its allocable costs. The Organization uses a percent of revenue method to allocate costs, which may not be the most accurate approach, as it can sometimes unfairly distribute costs depending on the specific program or activity and its resource usage.
Cause: The Organization does not have a written cost allocation plan that clearly describes each overhead cost center and its allocable costs. The Organization uses a percentage of revenue to allocate salary, wages and benefits across programs which could cause too much expense to be allocated to a program with high revenue, but low costs.
Effect: The Organization uses a percentage of revenue method to allocate costs, which may not be the most accurate approach, as it can sometimes unfairly distribute costs depending on the specific program or activity and its resource usage.
Questioned Costs: None
Recommendation: We recommend the Organization develop and follow a policy that governs how they calculate and charge shared services to all funds. We recommend calculating time and effort for each individual working on more than one program, or on program and administrative or fundraising functions. This should be documented and approved by the Board of Directors. The plan should be consistently applied.
Views of Responsible Officials and Planned Corrective Actions: The Organization will develop, implement, and consistently apply a policy that governs how shared services are calculated and charged to all funds. This policy will be developed by the Executive Director, with the assistance of the DAC Finance Committee, and approved by the DAC Board of Directors. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is June 30, 2025.
2023-005 – Cost Allocations (Material Weakness)
U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds
U.S. Department of Treasury 93.959 Block Grants for Prevention and Treatment of Substance Abuse
Criteria: Generally accepted accounting principles (GAAP), the IRS, and the Uniform Guidance (2 CFR 200.141) require nonprofit organizations to allocate expenses between three functions (program, management and general, and fundraising) on a reasonable basis that is consistently applied. The basis used should accurately distribute costs to a specific program or activity based on resource usage.
Condition: The Organization does not have a written cost allocation plan that clearly describes each overhead cost center and its allocable costs. The Organization uses a percent of revenue method to allocate costs, which may not be the most accurate approach, as it can sometimes unfairly distribute costs depending on the specific program or activity and its resource usage.
Cause: The Organization does not have a written cost allocation plan that clearly describes each overhead cost center and its allocable costs. The Organization uses a percentage of revenue to allocate salary, wages and benefits across programs which could cause too much expense to be allocated to a program with high revenue, but low costs.
Effect: The Organization uses a percentage of revenue method to allocate costs, which may not be the most accurate approach, as it can sometimes unfairly distribute costs depending on the specific program or activity and its resource usage.
Questioned Costs: None
Recommendation: We recommend the Organization develop and follow a policy that governs how they calculate and charge shared services to all funds. We recommend calculating time and effort for each individual working on more than one program, or on program and administrative or fundraising functions. This should be documented and approved by the Board of Directors. The plan should be consistently applied.
Views of Responsible Officials and Planned Corrective Actions: The Organization will develop, implement, and consistently apply a policy that governs how shared services are calculated and charged to all funds. This policy will be developed by the Executive Director, with the assistance of the DAC Finance Committee, and approved by the DAC Board of Directors. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is June 30, 2025.