FAC Explorer

Audit 35230

FY End
2022-12-31
Total Expended
$3.24M
Findings
4
Programs
9
Organization: Nexus Family Healing (MN)
Year: 2022 Accepted: 2023-09-05
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
34937 2022-001 Material Weakness - L
34938 2022-002 Material Weakness - AB
611379 2022-001 Material Weakness - L
611380 2022-002 Material Weakness - AB

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $1.35M Yes 2
84.215 Fund for the Improvement of Education $411,886 - 0
93.674 John H. Chafee Foster Care Program for Successful Transition to Adulthood $200,000 - 0
84.013 Title I State Agency Program for Neglected and Delinquent Children and Youth $165,182 - 0
10.559 Summer Food Service Program for Children $69,509 - 0
10.555 National School Lunch Program $19,054 - 0
84.126 Rehabilitation Services_vocational Rehabilitation Grants to States $12,256 - 0
93.958 Block Grants for Community Mental Health Services $10,000 - 0
10.553 School Breakfast Program $8,982 - 0

Contacts

Name Title Type
YJGXXGE6PJF9 Scott McGuire Auditee
7635518661 Ashley Brandt-Duda Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported in the schedule are reported on the accrual basis of accounting, except for subrecipient expenditures, which are recorded on the cash basis. When applicable, 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. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis cost rate. The accompanying consolidated schedule of expenditures of federal awards (the consolidated schedule) includes the federal grant activity of Nexus Family Healing (the Organization), under programs of the federal government for the year ended December 31, 2022. The information 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 consolidated schedule presents only a selected portion of the operations of the Organization, it is not intended to, and does not, present the financial position, changes in net assets, or cash flows of the Organization.
Title: Food Donation Accounting Policies: Expenditures reported in the schedule are reported on the accrual basis of accounting, except for subrecipient expenditures, which are recorded on the cash basis. When applicable, 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. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis cost rate. Nonmonetary assistance is reported in this consolidated schedule at the fair market value of the commodities received and disbursed. At December 31, 2022, the Organization had no food commodities in inventory. The Organization reported total noncash food donations on the consolidated schedule of $25,437 as part of the Child Nutrition Cluster.
Title: Provider Relief Funds Accounting Policies: Expenditures reported in the schedule are reported on the accrual basis of accounting, except for subrecipient expenditures, which are recorded on the cash basis. When applicable, 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. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis cost rate. The Organization received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund (PRF) program (Federal Financial Assistance Listing/CFDA #93.498) during the year ended December 31, 2021, totaling $1,348,112. The Organization incurred eligible expenditures, including lost revenues and, therefore, recognized revenues totaling $1,348,112 for the year ended December 31, 2021, on the consolidated financial statements. In accordance with the 2022 Compliance Supplement, the PRF expenditures recognized on the consolidated schedule are based on the reporting to HHS for Period 3, defined as payments received during January 1, 2021 to June 30, 2021, of $1,323,886, and Period 4, defined as payments received during July 1, 2021 to December 31, 2021, of $24,226. The amount of PRF expenditures included on the Schedule requires management to make estimates and assumptions that affect the reported amounts. Accordingly, such expenditures are considered a significant estimate. Estimates and assumptions may include reducing actual expenses by amounts that have been reimbursed or are obligated to be reimbursed by other sources and estimating marginal increases in expenses related to coronavirus. Actual amounts could differ from those estimates.

Finding Details

Finding 2022-001
2022-001 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 4 TIN #411419064 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.33(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statues, regulations, and conditions of the federal award. The Organization is required to submit an accurate report to HHS for each filing period of funds were received. Condition: The Organization claimed lost revenues attributable to coronavirus in which the final lost revenue calculation did not tie to the HHS Report. In addition, the Organization?s special report submitted to the Department of Health and Human Services (HHS) for Period 4 TIN #411419064 did not have documented review and approval by a separate individual outside of the preparer. Cause: The Organization did not have an internal control process in place to ensure documentation of the review and approval of the report submitted to the Department of Health and Human Services for Period 4. The Organization had a lost revenue calculation error of $1,698,708 on the HHS special report causing a difference to the actual lost revenues (i.e. there were more lost revenues reported on the HHS special report). Effect: While the calculation error provided a difference between the lost revenues on the HHS special report and the lost revenue calculation, the Organization had excess lost revenues available to be applied. This calculation error also indicated there is a lack of policies governing the review and approval of the lost revenue calculation to the HHS special report. Questioned Costs: None reported. The Organization had excess lost revenues available to be applied. Context: Key line items were tested on the Period 4 Department of Health and Human Services special report. The HHS special reports included total lost revenue calculation errors of $1,698,708. The Organization had excess lost revenues from the period 3 and period 4 HHS reports that totaled $17,305,791. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization enhance internal control policies to ensure the HHS special report is supported by accurate lost revenue calculations. This should include implementing a secondary review and approval over the lost revenue calculation. Views of Responsible Officials: Management agrees with this finding.
Finding 2022-002
2022-002 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 3 and Period 4 TIN #411419064 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization?s calculation of lost revenue claimed under the federal program as an allowable cost was not subjected to formal review or approval by a separate individual outside of the preparer. Cause: The Organization did not have an adequate internal control policy to ensure review and approval of the lost revenue calculation claimed under the federal program was documented in accordance with guidance. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: The lost revenue calculation for all applicable quarters was tested. Repeat Finding from Prior Year: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and documented approval of the lost revenue calculation under the federal program. Views of Responsible Officials: Management agrees with this finding.
Finding 2022-001
2022-001 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 4 TIN #411419064 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.33(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statues, regulations, and conditions of the federal award. The Organization is required to submit an accurate report to HHS for each filing period of funds were received. Condition: The Organization claimed lost revenues attributable to coronavirus in which the final lost revenue calculation did not tie to the HHS Report. In addition, the Organization?s special report submitted to the Department of Health and Human Services (HHS) for Period 4 TIN #411419064 did not have documented review and approval by a separate individual outside of the preparer. Cause: The Organization did not have an internal control process in place to ensure documentation of the review and approval of the report submitted to the Department of Health and Human Services for Period 4. The Organization had a lost revenue calculation error of $1,698,708 on the HHS special report causing a difference to the actual lost revenues (i.e. there were more lost revenues reported on the HHS special report). Effect: While the calculation error provided a difference between the lost revenues on the HHS special report and the lost revenue calculation, the Organization had excess lost revenues available to be applied. This calculation error also indicated there is a lack of policies governing the review and approval of the lost revenue calculation to the HHS special report. Questioned Costs: None reported. The Organization had excess lost revenues available to be applied. Context: Key line items were tested on the Period 4 Department of Health and Human Services special report. The HHS special reports included total lost revenue calculation errors of $1,698,708. The Organization had excess lost revenues from the period 3 and period 4 HHS reports that totaled $17,305,791. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization enhance internal control policies to ensure the HHS special report is supported by accurate lost revenue calculations. This should include implementing a secondary review and approval over the lost revenue calculation. Views of Responsible Officials: Management agrees with this finding.
Finding 2022-002
2022-002 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 3 and Period 4 TIN #411419064 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization?s calculation of lost revenue claimed under the federal program as an allowable cost was not subjected to formal review or approval by a separate individual outside of the preparer. Cause: The Organization did not have an adequate internal control policy to ensure review and approval of the lost revenue calculation claimed under the federal program was documented in accordance with guidance. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: The lost revenue calculation for all applicable quarters was tested. Repeat Finding from Prior Year: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and documented approval of the lost revenue calculation under the federal program. Views of Responsible Officials: Management agrees with this finding.