FAC Explorer

Audit 355826

FY End
2024-06-30
Total Expended
$1.12M
Findings
6
Programs
3
Organization: Horizon Education Alliance INC (IN)
Year: 2024 Accepted: 2025-05-08
Auditor: Kruggel Lawton CPA

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
559901 2024-001 - - P
559902 2024-002 Significant Deficiency - A
559903 2024-003 Significant Deficiency - B
1136343 2024-001 - - P
1136344 2024-002 Significant Deficiency - A
1136345 2024-003 Significant Deficiency - B

Programs

ALN Program Spent Major Findings
84.425 Education Stabilization Fund $692,860 Yes 3
84.002 Adult Education - Basic Grants to States $140,498 - 0
17.285 Registered Apprenticeship $66,800 - 0

Contacts

Name Title Type
D32CBLYJNL37 Cindi Dixon Auditee
5745362265 Allison James Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the modified cash basis of accounting, a basis other than accounting principles generally accepted in the United States of America. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allocable or are limited as to reimbursement. The Organization has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Organization did not use the 10% de minimis indirect cost rate. The accompanying Schedule of Expenditures of Federal Awards ("Schedule") includes the federal award activity of Horizon Education Alliance, Inc. (the "Organization") 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 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: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on the Schedule are reported on the modified cash basis of accounting, a basis other than accounting principles generally accepted in the United States of America. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allocable or are limited as to reimbursement. The Organization has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Organization did not use the 10% de minimis indirect cost rate. Expenditures reported on the Schedule are reported on the modified cash basis of accounting, a basis other than accounting principles generally accepted in the United States of America. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allocable or are limited as to reimbursement. The Organization has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: RECONCILIATION OF THE SCHEDULE TO THE FINANCIAL STATEMENTS Accounting Policies: Expenditures reported on the Schedule are reported on the modified cash basis of accounting, a basis other than accounting principles generally accepted in the United States of America. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allocable or are limited as to reimbursement. The Organization has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Organization did not use the 10% de minimis indirect cost rate. See the Notes to the SEFA for table.

Finding Details

Finding 2024-001
NONCOMPLIANCE 2024-001 WRITTEN FEDERAL PROCEDURES Federal Agency: Department of Education Federal Program or Cluster: Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years 70907 - June 24, 2022 - September 30, 2024 Questioned Costs $0 Condition: The Organization's accounting and procedures manual did not include written policies or procedures that address all applicable compliance areas under the Uniform Guidance; for instance, allowable costs. Criteria: The Organization must establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award as stated in 2 CFR Section 200.302. Cause: The Organization was inattentive to all of the requirements in the Uniform Guidance. Effect: The absence of documented policies and procedures could result in noncompliance with the terms of federal awards. Recommendation: The Organization should document and adhere to written policies and procedures that reflect current OMB requirements under the Uniform Guidance. This accounting and procedures manual should be monitored and revised annually as necessary. Identification of repeat findings: This finding is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop an updated accounting and procedures manual that includes written policies and procedures related to all applicable compliance areas under Uniform Guidance by July 2025.
Finding 2024-002
SIGNIFICANT DEFICIENCY 2024-002 ALLOWABLE COSTS Federal Agency: Department of Education Federal Program or Cluster: Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years 70907: 06/24/2022 - 9/30/2024 Questioned Costs $0 Condition: An allocated payroll expense was improperly calculated and charged to the grant due to an error in a manual spreadsheet used to allocate payroll costs to the grant. A separate unallowed cost was charged to the grant to the grant as well. In that case, out of a sample of 7 expenditures, 1 expenditure tested was unallowed by the grant requirements. Criteria: The Organization is required to maintain a system of internal controls that ensures only costs incurred for federal grant activities are charged to the federal grant. Cause: The individual responsible for reviewing the grant activity and resulting reimbursements failed to detect that the payroll expense was calculated improperly and that the other expense was not an allowable cost. Effect: The Organization used federal funds for unallowable costs which could result in recapture by the federal agency. Recommendation: Management should improve the system of review over payroll costs and other costs charged to the grant to ensure reimbursements are only requested for allowable costs. Personnel should be trained as needed. Identification of repeat findings: This finding is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop an updated accounting and procedures manual that includes written policies and procedures related to all applicable compliance areas under Uniform Guidance which included allowable costs. Relevant staff will be trained on the updated policies and each cost assigned to a federal grant will be reviewed by the grants manager or leadership staff.
Finding 2024-003
SIGNIFICANT DEFICIENCY 2024-003 TIME & EFFORT REPORTS Federal Agency: Department of Education Federal Program or Cluster: Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years 70907 - June 24, 2022 - September 30, 2024 Questioned Costs $0 Condition: The Organization lacked the required support to show that the hours billed by program employees were allocated in accordance with actual time spent rather than predetermined budgets. Criteria: A complete system of internal controls requires all expenditures be properly approved and supported by appropriate documentation. In addition, all expenditures charged to the federal program are required to be allowable costs under the program and allocated in accordance with the Organization's approved budget. Cause: The Organization was not aware that time studies or time and effort reports to capture actual time spent on program activities were necessary. Effect: Payroll expenses unrelated to the federal grant may be paid and charged to the federal program or charged to the incorrect grant. Recommendation: We recommend that the Organization conduct time studies to provide support for the time allocated to each grant. Identification of repeat findings: This finding is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop a policy and procedure for documenting time and effort for all employees funded under a federal grant that aligns with Uniform Guidance requirements by July 2025.
Finding 2024-001
NONCOMPLIANCE 2024-001 WRITTEN FEDERAL PROCEDURES Federal Agency: Department of Education Federal Program or Cluster: Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years 70907 - June 24, 2022 - September 30, 2024 Questioned Costs $0 Condition: The Organization's accounting and procedures manual did not include written policies or procedures that address all applicable compliance areas under the Uniform Guidance; for instance, allowable costs. Criteria: The Organization must establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award as stated in 2 CFR Section 200.302. Cause: The Organization was inattentive to all of the requirements in the Uniform Guidance. Effect: The absence of documented policies and procedures could result in noncompliance with the terms of federal awards. Recommendation: The Organization should document and adhere to written policies and procedures that reflect current OMB requirements under the Uniform Guidance. This accounting and procedures manual should be monitored and revised annually as necessary. Identification of repeat findings: This finding is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop an updated accounting and procedures manual that includes written policies and procedures related to all applicable compliance areas under Uniform Guidance by July 2025.
Finding 2024-002
SIGNIFICANT DEFICIENCY 2024-002 ALLOWABLE COSTS Federal Agency: Department of Education Federal Program or Cluster: Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years 70907: 06/24/2022 - 9/30/2024 Questioned Costs $0 Condition: An allocated payroll expense was improperly calculated and charged to the grant due to an error in a manual spreadsheet used to allocate payroll costs to the grant. A separate unallowed cost was charged to the grant to the grant as well. In that case, out of a sample of 7 expenditures, 1 expenditure tested was unallowed by the grant requirements. Criteria: The Organization is required to maintain a system of internal controls that ensures only costs incurred for federal grant activities are charged to the federal grant. Cause: The individual responsible for reviewing the grant activity and resulting reimbursements failed to detect that the payroll expense was calculated improperly and that the other expense was not an allowable cost. Effect: The Organization used federal funds for unallowable costs which could result in recapture by the federal agency. Recommendation: Management should improve the system of review over payroll costs and other costs charged to the grant to ensure reimbursements are only requested for allowable costs. Personnel should be trained as needed. Identification of repeat findings: This finding is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop an updated accounting and procedures manual that includes written policies and procedures related to all applicable compliance areas under Uniform Guidance which included allowable costs. Relevant staff will be trained on the updated policies and each cost assigned to a federal grant will be reviewed by the grants manager or leadership staff.
Finding 2024-003
SIGNIFICANT DEFICIENCY 2024-003 TIME & EFFORT REPORTS Federal Agency: Department of Education Federal Program or Cluster: Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years 70907 - June 24, 2022 - September 30, 2024 Questioned Costs $0 Condition: The Organization lacked the required support to show that the hours billed by program employees were allocated in accordance with actual time spent rather than predetermined budgets. Criteria: A complete system of internal controls requires all expenditures be properly approved and supported by appropriate documentation. In addition, all expenditures charged to the federal program are required to be allowable costs under the program and allocated in accordance with the Organization's approved budget. Cause: The Organization was not aware that time studies or time and effort reports to capture actual time spent on program activities were necessary. Effect: Payroll expenses unrelated to the federal grant may be paid and charged to the federal program or charged to the incorrect grant. Recommendation: We recommend that the Organization conduct time studies to provide support for the time allocated to each grant. Identification of repeat findings: This finding is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop a policy and procedure for documenting time and effort for all employees funded under a federal grant that aligns with Uniform Guidance requirements by July 2025.