Audit 356686

Information on Federal Program(s) - U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds American Rescue Plan Act – Youth Mental Health ALN 21-027 Award Year 2023 Criteria or Specific Requirement – The Code of Federal Regulations Section 200.403 states that for costs to be allowable under Federal awards, they must be a in accordance with the terms and conditions of the federal award. Condition – During our audit, we identified instances where overtime costs were charged to the federal award without documented pre-approval for these overtime expenses in the grant document or approved budget. During our testing of payroll disbursements, we noted the following exceptions: Two of the 11 expenditures sampled included unauthorized overtime pay in the amount of $391. Cause - Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained correctly to evidence that costs were allowable and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect or Potential Effect - The effect of charging unauthorized overtime costs to the federal award is the potential disallowance of these costs upon review by the grantor agency, which could result in the organization having to refund these amounts to the federal government. Additionally, this finding raises concerns about the adequacy of the organization's internal controls over compliance with federal award requirements. Questioned Costs - $391 Context – We tested a sample of 11 items and found two exceptions as noted in the condition in the amount of $391. This is a condition identified per review of YMCA’s compliance with specified requirements using a statistically valid sample. Recommendation - We recommend that YMCA: 1) Review and strengthen its internal controls and procedures to ensure that all costs charged to federal awards, especially personnel costs, are in accordance with the terms and conditions of the award and applicable federal regulations. 2) Provide training to relevant staff on the requirements for charging costs to federal awards, with a particular focus on the need for prior approval for overtime charges.3) Work with the federal grantor agency to resolve the questioned costs and take any necessary corrective actions to prevent similar findings in the future. Views of Responsible Officials – Management has reviewed the finding related to charging overtime pay to the federal award and has developed the following plan to address this finding and ensure compliance going forward: 1. The Y has already addressed the disallowed costs with the City of San Antonio and will be deducting those costs from the next quarterly billing on June 20, 2024. 2. Due to accounting staff turnover throughout 2023, our new staff will be attending online trainings offered through the City’s online funding portal before the next billing on June 20, 2024. 3. Knowledge gained by staff through a monitoring visit by the City in January 2024 has provided additional direction as to what expenditures are qualified under the provisions of the federal award. Staff will utilize knowledge gained from this visit to ensure certain components of compensation are excluded from future billings. 4. The Y will develop an invoicing checklist for use by the Senior Accountant that will assist her with ensuring that only approved budgeted expenditures are included in future billings. This checklist will be completed by the Senior Accountant and reviewed and signed by the VPFinance/ Controller before invoice submission to the City.

Information on Federal Program(s) - U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds American Rescue Plan Act – Youth Mental Health ALN 21-027 Award Year 2023 Criteria or Specific Requirement – The Code of Federal Regulations Section 200.403 states that for costs to be allowable under Federal awards, they must be a in accordance with the terms and conditions of the federal award. Condition – During our audit, we identified instances where overtime costs were charged to the federal award without documented pre-approval for these overtime expenses in the grant document or approved budget. During our testing of payroll disbursements, we noted the following exceptions: Two of the 11 expenditures sampled included unauthorized overtime pay in the amount of $391. Cause - Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained correctly to evidence that costs were allowable and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect or Potential Effect - The effect of charging unauthorized overtime costs to the federal award is the potential disallowance of these costs upon review by the grantor agency, which could result in the organization having to refund these amounts to the federal government. Additionally, this finding raises concerns about the adequacy of the organization's internal controls over compliance with federal award requirements. Questioned Costs - $391 Context – We tested a sample of 11 items and found two exceptions as noted in the condition in the amount of $391. This is a condition identified per review of YMCA’s compliance with specified requirements using a statistically valid sample. Recommendation - We recommend that YMCA: 1) Review and strengthen its internal controls and procedures to ensure that all costs charged to federal awards, especially personnel costs, are in accordance with the terms and conditions of the award and applicable federal regulations. 2) Provide training to relevant staff on the requirements for charging costs to federal awards, with a particular focus on the need for prior approval for overtime charges.3) Work with the federal grantor agency to resolve the questioned costs and take any necessary corrective actions to prevent similar findings in the future. Views of Responsible Officials – Management has reviewed the finding related to charging overtime pay to the federal award and has developed the following plan to address this finding and ensure compliance going forward: 1. The Y has already addressed the disallowed costs with the City of San Antonio and will be deducting those costs from the next quarterly billing on June 20, 2024. 2. Due to accounting staff turnover throughout 2023, our new staff will be attending online trainings offered through the City’s online funding portal before the next billing on June 20, 2024. 3. Knowledge gained by staff through a monitoring visit by the City in January 2024 has provided additional direction as to what expenditures are qualified under the provisions of the federal award. Staff will utilize knowledge gained from this visit to ensure certain components of compensation are excluded from future billings. 4. The Y will develop an invoicing checklist for use by the Senior Accountant that will assist her with ensuring that only approved budgeted expenditures are included in future billings. This checklist will be completed by the Senior Accountant and reviewed and signed by the VPFinance/ Controller before invoice submission to the City.