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Audit 349443

FY End
2024-06-30
Total Expended
$5.41M
Findings
4
Programs
1
Organization: United Mental Health & Addiction Recovery Coalition (IL)
Year: 2024 Accepted: 2025-03-28
Auditor: Legacy Shore Group PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
538706 2024-001 - - A
538707 2024-002 - - A
1115148 2024-001 - - A
1115149 2024-002 - - A

Programs

ALN Program Spent Major Findings
93.959 Block Grants for Prevention and Treatment of Substance Abuse $5.41M Yes 2

Contacts

Name Title Type
L634XHKGHC45 Angela Smith Auditee
7089690253 Robert Young Auditor
No contacts on file

Notes to SEFA

Title: UMARC Notes to Schedule of Expenditure of Federal Awards For the Year Ended June 30, 2023 Accounting Policies: The Basis of Accounintg used is GAAP and GAGAS De Minimis Rate Used: Y Rate Explanation: UMARC uses the de minimis cost rate UMARC Notes to Schedule of Expenditure of Federal Awards For the Year Ended June 30, 2024
Title: 1. Basis of Presentation Accounting Policies: The Basis of Accounintg used is GAAP and GAGAS De Minimis Rate Used: Y Rate Explanation: UMARC uses the de minimis cost rate The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of UMARC under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of UMARC, it is not intended to and does not present the financial position, changes in net position, or cash flows of UMARC.
Title: 2. Summary of Significant Accounting Policies Accounting Policies: The Basis of Accounintg used is GAAP and GAGAS De Minimis Rate Used: Y Rate Explanation: UMARC uses the de minimis cost rate Expenditures reported on the Schedule are reported on the identify basis of accounting of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
Title: 3. Indirect Cost Rate Accounting Policies: The Basis of Accounintg used is GAAP and GAGAS De Minimis Rate Used: Y Rate Explanation: UMARC uses the de minimis cost rate UMARC elected to use the 10% de minimis indirect cost rate during fiscal year 2024.
Title: 4. Subrecipients Accounting Policies: The Basis of Accounintg used is GAAP and GAGAS De Minimis Rate Used: Y Rate Explanation: UMARC uses the de minimis cost rate UMARC made $5,100,478 in disbursements to subrecipients during the fiscal year 2024.
Title: 5. Non-cash Assistance Accounting Policies: The Basis of Accounintg used is GAAP and GAGAS De Minimis Rate Used: Y Rate Explanation: UMARC uses the de minimis cost rate UMARC did not receive any federal non-cash assistance during the fiscal year 2024.
Title: 6. Insurance Accounting Policies: The Basis of Accounintg used is GAAP and GAGAS De Minimis Rate Used: Y Rate Explanation: UMARC uses the de minimis cost rate UMARC used no federal funds to acquire insurance during the fiscal year 2024.
Title: 7. Loans Accounting Policies: The Basis of Accounintg used is GAAP and GAGAS De Minimis Rate Used: Y Rate Explanation: UMARC uses the de minimis cost rate UMARC did not have any federal loans or loan guarantees outstanding as of June 30, 2024.

Finding Details

Finding 2024-001
Finding 2024-01: Improper classification of transactions in general ledger software Criteria: According to generally accepted accounting principles (GAAP), financial transactions must be accurately classified to reflect the true nature of each transaction. Condition: The audit identified several instances where expenses were classified as capital expenditures, and revenue transactions were incorrectly recorded as liabilities. These misclassifications resulted in inaccurate financial statements and misstated financial positions. Cause: The improper classification of transactions was due to insufficient oversight by management. Effect: The misclassification of transactions led to inaccurate financial statements, affecting decision-making and stakeholder confidence. Recommendation: UMARC management should implement robust review and approval procedures for financial transactions to ensure accurate classification. Questioned Costs $24,125 Auditee Response: Management concurs with the finding. We have passed the relevant adjustments to correct the misclassification in our FY24 financial statements. We will also update our accounting policies and procedures Per the Audit recommendation. The adjusted financial statements will be submitted to the federal awarding agency by the end of March 2025.
Finding 2024-002
Finding 2024-02: Noncompliance with Timely Financial Reporting for Federal Grant Award and State Reporting requirements Criteria: 2 CFR § 200.327(a) states that grantees must submit financial reports no less frequently than annually. Further, SEFA to the Federal Audit Clearinghouse website within nine (9) months of June 30, 2024. UMARC also didn’t submit its audited financial statements, CYEFR, and other required information to the GATA portal within six (6) months after June 30, 2024. Condition: The report for the quarter ended June 30, 2024, was due on July 30, 2024, was not submitted as of the date of this Audit, and the annual financial reports for FY24, were due on December 31, 2024, were also not submitted to the GATA portal as of the date of this audit. Cause: The grantee's internal controls over financial reporting were inadequate, lacking tracking, formal review, and approvals. As well as the late appointment of a new auditor. Effect: Late submission of financial reports hinders the federal agency's ability to monitor the financial health and programmatic progress of the grant. This can delay funding disbursements, impede program evaluation, and potentially lead to closer scrutiny of the grantee's activities. It also prevents the agency from fulfilling its oversight responsibilities as outlined in 2 CFR Part 200. Recommendation: Develop and implement a comprehensive financial reporting calendar that clearly identifies deadlines for all required reports and assigns responsibility for their preparation and submission. This calendar should be distributed to all relevant staff. Also provide comprehensive training to the finance staff on federal financial reporting requirements, including 2 CFR Part 200 and the specific requirements of this grant agreement. Include training on the grantee's internal financial reporting policies and procedures. Questioned Costs None noted Auditee Response: Management concurs with the finding. A new financial reporting calendar has been implemented and distributed to all staff. A formal review and approval process for financial reports has been implemented. The report for the quarter ended June 2024 will be submitted by end of March 2025.
Finding 2024-001
Finding 2024-01: Improper classification of transactions in general ledger software Criteria: According to generally accepted accounting principles (GAAP), financial transactions must be accurately classified to reflect the true nature of each transaction. Condition: The audit identified several instances where expenses were classified as capital expenditures, and revenue transactions were incorrectly recorded as liabilities. These misclassifications resulted in inaccurate financial statements and misstated financial positions. Cause: The improper classification of transactions was due to insufficient oversight by management. Effect: The misclassification of transactions led to inaccurate financial statements, affecting decision-making and stakeholder confidence. Recommendation: UMARC management should implement robust review and approval procedures for financial transactions to ensure accurate classification. Questioned Costs $24,125 Auditee Response: Management concurs with the finding. We have passed the relevant adjustments to correct the misclassification in our FY24 financial statements. We will also update our accounting policies and procedures Per the Audit recommendation. The adjusted financial statements will be submitted to the federal awarding agency by the end of March 2025.
Finding 2024-002
Finding 2024-02: Noncompliance with Timely Financial Reporting for Federal Grant Award and State Reporting requirements Criteria: 2 CFR § 200.327(a) states that grantees must submit financial reports no less frequently than annually. Further, SEFA to the Federal Audit Clearinghouse website within nine (9) months of June 30, 2024. UMARC also didn’t submit its audited financial statements, CYEFR, and other required information to the GATA portal within six (6) months after June 30, 2024. Condition: The report for the quarter ended June 30, 2024, was due on July 30, 2024, was not submitted as of the date of this Audit, and the annual financial reports for FY24, were due on December 31, 2024, were also not submitted to the GATA portal as of the date of this audit. Cause: The grantee's internal controls over financial reporting were inadequate, lacking tracking, formal review, and approvals. As well as the late appointment of a new auditor. Effect: Late submission of financial reports hinders the federal agency's ability to monitor the financial health and programmatic progress of the grant. This can delay funding disbursements, impede program evaluation, and potentially lead to closer scrutiny of the grantee's activities. It also prevents the agency from fulfilling its oversight responsibilities as outlined in 2 CFR Part 200. Recommendation: Develop and implement a comprehensive financial reporting calendar that clearly identifies deadlines for all required reports and assigns responsibility for their preparation and submission. This calendar should be distributed to all relevant staff. Also provide comprehensive training to the finance staff on federal financial reporting requirements, including 2 CFR Part 200 and the specific requirements of this grant agreement. Include training on the grantee's internal financial reporting policies and procedures. Questioned Costs None noted Auditee Response: Management concurs with the finding. A new financial reporting calendar has been implemented and distributed to all staff. A formal review and approval process for financial reports has been implemented. The report for the quarter ended June 2024 will be submitted by end of March 2025.