FAC Explorer

Audit 353036

FY End
2024-12-31
Total Expended
$1.20M
Findings
4
Programs
1
Organization: The Covering House (AZ)
Year: 2024 Accepted: 2025-04-08
Auditor: F E W CPAS

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
554378 2024-001 Significant Deficiency - P
554379 2024-002 Significant Deficiency - P
1130820 2024-001 Significant Deficiency - P
1130821 2024-002 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.20M Yes 2

Contacts

Name Title Type
MLL3PQKBKSN3 Martha Ward Auditee
3149623450 Lora Romano Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 - REPORTING ENTITY BASIS OF PRESENTATION AND ACCOUNTING Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of The Covering House and has been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles. The information in this schedule is also 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis indirect cost rate allocation. The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of The Covering House and has been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles. The information in this schedule is also 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.
Title: NOTE 2 - SUB-RECIPIENTS Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of The Covering House and has been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles. The information in this schedule is also 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis indirect cost rate allocation. None of the federal expenditures presented in the schedule were provided to sub-recipients.
Title: NOTE 3 - DESCRIPTION OF MAJOR FEDERAL PROGRAM Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of The Covering House and has been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles. The information in this schedule is also 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis indirect cost rate allocation. The objectives of the Coronavirus State and Local Recovery – American Rescue Plan Act funds is to provide direct payments to local governments to respond to the public health emergency, respond to workers performing essential work during the public health emergency, provide government services, and make necessary investments in water, sewer, or broadband infrastructure.
Title: NOTE 4 - NONCASH ASSISTANCE Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of The Covering House and has been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles. The information in this schedule is also 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis indirect cost rate allocation. The Organization received no federal noncash assistance during the year.
Title: NOTE 5 - INSURANCE Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of The Covering House and has been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles. The information in this schedule is also 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis indirect cost rate allocation. The federal programs presented in the previous schedule did not have separate program-specific insurance policies.
Title: NOTE 6 - LOANS/LOAN GUARANTEES/INTEREST SUBSIDIES Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of The Covering House and has been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles. The information in this schedule is also 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis indirect cost rate allocation. The federal programs presented in the previous schedule did not have any loans, loan guarantees, or interest subsidies associated with them.
Title: NOTE 7 - DE MINIMIS COST RATE Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of The Covering House and has been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles. The information in this schedule is also 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis indirect cost rate allocation. The Organization has not elected to use the 10% de minimis indirect cost rate allocation.
Title: NOTE 8 - DONATED PERSONAL PROTECTIVE EQUIPMENT Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of The Covering House and has been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles. The information in this schedule is also 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis indirect cost rate allocation. The District did not receive any donated personal protective equipment during the year ended December 31, 2024.

Finding Details

Finding 2024-001
Condition: We identified a significant deficiency related to the Organization’s controls over cash disbursements. Specifically, not all cash disbursements maintained the required supporting documentation and documented approval. Criteria: Proper internal control calls for every expenditure to show some evidence that it was approved prior to preparing the check and that invoices are present to support expenditures. Effect: The lack of these controls increases the risk of unauthorized or improper transactions, which could result in financial misstatements or misappropriation of assets. Recommendation: We recommend that the Organization obtain invoices or receipts for all disbursements and that all disbursements get initialed by a member of management to show evidence of approval. Response: The Organization is in agreement with the finding and has implemented new bill paying procedures that they will continue in 2025.
Finding 2024-002
Condition: We identified a significant deficiency related to the Organization’s segregation of duties. Specifically, the accounting department lacked proper segregation of duties in key areas, including accounting, banking procedures, and cash disbursements, increasing the risk of errors and unauthorized transactions. Criteria: An important element of internal accounting controls is an adequate segregation of duties such that no individual has the responsibility to execute a transaction, possess access to the related assets, and have responsibility or authority to record the transaction. Effect: A lack of segregation of duties subjects the Organization to a higher risk that errors or fraud could occur and not be detected in a timely manner in the normal course of business. Recommendation: We recommend that the Organization develop new written accounting procedures that include proper segregation of duties in the accounting department. Response: The Organization is in agreement with the finding and will review responsibilities during the 2025 year to determine and allow for sufficient segregation of duties.
Finding 2024-001
Condition: We identified a significant deficiency related to the Organization’s controls over cash disbursements. Specifically, not all cash disbursements maintained the required supporting documentation and documented approval. Criteria: Proper internal control calls for every expenditure to show some evidence that it was approved prior to preparing the check and that invoices are present to support expenditures. Effect: The lack of these controls increases the risk of unauthorized or improper transactions, which could result in financial misstatements or misappropriation of assets. Recommendation: We recommend that the Organization obtain invoices or receipts for all disbursements and that all disbursements get initialed by a member of management to show evidence of approval. Response: The Organization is in agreement with the finding and has implemented new bill paying procedures that they will continue in 2025.
Finding 2024-002
Condition: We identified a significant deficiency related to the Organization’s segregation of duties. Specifically, the accounting department lacked proper segregation of duties in key areas, including accounting, banking procedures, and cash disbursements, increasing the risk of errors and unauthorized transactions. Criteria: An important element of internal accounting controls is an adequate segregation of duties such that no individual has the responsibility to execute a transaction, possess access to the related assets, and have responsibility or authority to record the transaction. Effect: A lack of segregation of duties subjects the Organization to a higher risk that errors or fraud could occur and not be detected in a timely manner in the normal course of business. Recommendation: We recommend that the Organization develop new written accounting procedures that include proper segregation of duties in the accounting department. Response: The Organization is in agreement with the finding and will review responsibilities during the 2025 year to determine and allow for sufficient segregation of duties.