Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.303(a) states, “The non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
A good internal control structure consists of proper segregation of duties where no one person is involved in all
aspects of a given transaction. This includes proper segregation of the following functions: authorization of
transactions, custody of assets, and recordkeeping.
Condition
During the course of the audit, we noted improper segregation of duties over cash disbursements and payroll:
Cash Disbursements:
During the year ended June 30, 2023, the bookkeeper had access to a signature stamp along with full access
to the general ledger. During our audit, we noted that there is inconsistently documented approval of nonpayroll
expenses.
Payroll:
During our audit, we noted that there is no documented review and approval of the biweekly payrolls or
timesheets.
Cause
The Organization has made a reasonable effort to design proper controls, but has faced challenges in
implementing them effectively, due to growth across multiple locations and frequent turnover.
Effect
Without proper segregation of duties or proper approval processes over cash disbursements, funds could be
misappropriated without detection by management or the Board. A lack of proper segregation over payroll
controls such as review and approval of biweekly payrolls and timesheets could result in ghost employees on the
Organization’s payroll or overpayment of hours and rates.
Questioned Costs
None
Perspective Information
During the audit we gained an understanding of the Organization’s internal controls through inquiry and
observation, and by examining one item from each of the three cycles: cash receipts, cash disbursements, and
payroll. We also tested a sample of forty (40) non-payroll cash disbursements and identified four (4) with no
authorization. The Organization does contract with an outside accounting firm who reviews all transactions and
performs reconciliations of the accounting records. Identification as a repeat finding
There was no similar finding in the prior year.
Recommendation
We recommend that the Organization implement policies and procedures, including reviews and reconciliations
where necessary, which ensure that no one individual is involved in all aspects of the cash disbursements and
payroll processes. The Organization should review these processes and segregate duties as much as considered
practical. We recommend that all non-payroll expenses be approved before disbursement and that all time sheets
and biweekly payrolls be reviewed and approved by the appropriate supervisor/management. We recommend that
control of the signature stamp be moved to a different member of the Carlisle office who does not have edit access
to the accounting software, and that it continues to only be used at the approval of the Board Chair.
View of Responsible Official
Currently, based on the capacity of the Organization’s staffing pool, the most efficient and effective means of
review and reconciliation of cash disbursements and payroll is the Organization’s Board Chair and CEO
reviewing the cash disbursements and payroll every two weeks, prior to payments being made. The Organization’s
bookkeeper forwards the Board Chair and CEO a listing of cash disbursements and payroll due with the suggested
payments. The Board Chair and CEO each will ask questions and formally “approve” or “disapprove” each
transaction, prior to any payments. Once reviewed, the CEO will contact the bookkeeper with the amounts to pay.
Also, the Organization’s outsourced accountant will review and approve each monthly bank reconciliation and
bank statement for all Organization accounts, as well as the monthly credit card statements. The outsourced
accountant does not have the ability to access the monthly bank statements and make purchases. Going forward,
the Organization’s Director of Communications will retain the Board Chair’s check stamp. The Director of
Communication will only be allowed to use the Board Chair’s check stamp once the Board Chair and CEO
approved payment.
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.303(a) states, “The non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
A good internal control structure consists of proper segregation of duties where no one person is involved in all
aspects of a given transaction. This includes proper segregation of the following functions: authorization of
transactions, custody of assets, and recordkeeping.
Condition
During the course of the audit, we noted improper segregation of duties over cash disbursements and payroll:
Cash Disbursements:
During the year ended June 30, 2023, the bookkeeper had access to a signature stamp along with full access
to the general ledger. During our audit, we noted that there is inconsistently documented approval of nonpayroll
expenses.
Payroll:
During our audit, we noted that there is no documented review and approval of the biweekly payrolls or
timesheets.
Cause
The Organization has made a reasonable effort to design proper controls, but has faced challenges in
implementing them effectively, due to growth across multiple locations and frequent turnover.
Effect
Without proper segregation of duties or proper approval processes over cash disbursements, funds could be
misappropriated without detection by management or the Board. A lack of proper segregation over payroll
controls such as review and approval of biweekly payrolls and timesheets could result in ghost employees on the
Organization’s payroll or overpayment of hours and rates.
Questioned Costs
None
Perspective Information
During the audit we gained an understanding of the Organization’s internal controls through inquiry and
observation, and by examining one item from each of the three cycles: cash receipts, cash disbursements, and
payroll. We also tested a sample of forty (40) non-payroll cash disbursements and identified four (4) with no
authorization. The Organization does contract with an outside accounting firm who reviews all transactions and
performs reconciliations of the accounting records. Identification as a repeat finding
There was no similar finding in the prior year.
Recommendation
We recommend that the Organization implement policies and procedures, including reviews and reconciliations
where necessary, which ensure that no one individual is involved in all aspects of the cash disbursements and
payroll processes. The Organization should review these processes and segregate duties as much as considered
practical. We recommend that all non-payroll expenses be approved before disbursement and that all time sheets
and biweekly payrolls be reviewed and approved by the appropriate supervisor/management. We recommend that
control of the signature stamp be moved to a different member of the Carlisle office who does not have edit access
to the accounting software, and that it continues to only be used at the approval of the Board Chair.
View of Responsible Official
Currently, based on the capacity of the Organization’s staffing pool, the most efficient and effective means of
review and reconciliation of cash disbursements and payroll is the Organization’s Board Chair and CEO
reviewing the cash disbursements and payroll every two weeks, prior to payments being made. The Organization’s
bookkeeper forwards the Board Chair and CEO a listing of cash disbursements and payroll due with the suggested
payments. The Board Chair and CEO each will ask questions and formally “approve” or “disapprove” each
transaction, prior to any payments. Once reviewed, the CEO will contact the bookkeeper with the amounts to pay.
Also, the Organization’s outsourced accountant will review and approve each monthly bank reconciliation and
bank statement for all Organization accounts, as well as the monthly credit card statements. The outsourced
accountant does not have the ability to access the monthly bank statements and make purchases. Going forward,
the Organization’s Director of Communications will retain the Board Chair’s check stamp. The Director of
Communication will only be allowed to use the Board Chair’s check stamp once the Board Chair and CEO
approved payment.
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.303(a) states, “The non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
A good internal control structure consists of proper segregation of duties where no one person is involved in all
aspects of a given transaction. This includes proper segregation of the following functions: authorization of
transactions, custody of assets, and recordkeeping.
Condition
During the course of the audit, we noted improper segregation of duties over cash disbursements and payroll:
Cash Disbursements:
During the year ended June 30, 2023, the bookkeeper had access to a signature stamp along with full access
to the general ledger. During our audit, we noted that there is inconsistently documented approval of nonpayroll
expenses.
Payroll:
During our audit, we noted that there is no documented review and approval of the biweekly payrolls or
timesheets.
Cause
The Organization has made a reasonable effort to design proper controls, but has faced challenges in
implementing them effectively, due to growth across multiple locations and frequent turnover.
Effect
Without proper segregation of duties or proper approval processes over cash disbursements, funds could be
misappropriated without detection by management or the Board. A lack of proper segregation over payroll
controls such as review and approval of biweekly payrolls and timesheets could result in ghost employees on the
Organization’s payroll or overpayment of hours and rates.
Questioned Costs
None
Perspective Information
During the audit we gained an understanding of the Organization’s internal controls through inquiry and
observation, and by examining one item from each of the three cycles: cash receipts, cash disbursements, and
payroll. We also tested a sample of forty (40) non-payroll cash disbursements and identified four (4) with no
authorization. The Organization does contract with an outside accounting firm who reviews all transactions and
performs reconciliations of the accounting records. Identification as a repeat finding
There was no similar finding in the prior year.
Recommendation
We recommend that the Organization implement policies and procedures, including reviews and reconciliations
where necessary, which ensure that no one individual is involved in all aspects of the cash disbursements and
payroll processes. The Organization should review these processes and segregate duties as much as considered
practical. We recommend that all non-payroll expenses be approved before disbursement and that all time sheets
and biweekly payrolls be reviewed and approved by the appropriate supervisor/management. We recommend that
control of the signature stamp be moved to a different member of the Carlisle office who does not have edit access
to the accounting software, and that it continues to only be used at the approval of the Board Chair.
View of Responsible Official
Currently, based on the capacity of the Organization’s staffing pool, the most efficient and effective means of
review and reconciliation of cash disbursements and payroll is the Organization’s Board Chair and CEO
reviewing the cash disbursements and payroll every two weeks, prior to payments being made. The Organization’s
bookkeeper forwards the Board Chair and CEO a listing of cash disbursements and payroll due with the suggested
payments. The Board Chair and CEO each will ask questions and formally “approve” or “disapprove” each
transaction, prior to any payments. Once reviewed, the CEO will contact the bookkeeper with the amounts to pay.
Also, the Organization’s outsourced accountant will review and approve each monthly bank reconciliation and
bank statement for all Organization accounts, as well as the monthly credit card statements. The outsourced
accountant does not have the ability to access the monthly bank statements and make purchases. Going forward,
the Organization’s Director of Communications will retain the Board Chair’s check stamp. The Director of
Communication will only be allowed to use the Board Chair’s check stamp once the Board Chair and CEO
approved payment.
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.430(i)(viii) states, “Budget estimates alone do not qualify as support for charges to Federal awards, but
may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces
reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work
activity are identified and entered into the records in a timely manner; and (C) the non-Federal entity’s system of
internal controls includes processes to review after-the-fact interim charges made to a Federal award based on
budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award
is accurate, allowable, and properly allocated.”
Condition
During the course of the audit, we noted that employee time charged to multiple programs was based on an
estimated percentage of time established at the beginning of the fiscal year. The methodology is allowable when
an after-the-fact review of the estimate is completed to ensure the federal award is charged the proper amount.
The Organization reviews and adjusts allocations annually but makes changes on a prospective basis.
Cause
The Organization’s internal controls do not include a process for adjustments to estimated percentages for
charging employee time.
Effect
The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses
could include an over or understatement of salary expenses allocated to the federal grant.
Questioned Costs
None
Perspective Information
The finding noted related to four (4) pay periods tested where it was noted that no allocation based on actual time
spent on the grants was performed. It was noted that all employees tested were allocated 100% to the grant.
Identification as a repeat finding
There was a similar finding in the prior year.
Recommendation
We recommend the Organization develop a process to review the percentages used to charge employee time to
the Federal grants during the fiscal year and update accounting records accordingly. View of Responsible Official
Currently, the Organization’s CEO and the bookkeeper will review each grant’s funding details prior to the grant’s
fiscal year to determine how each employee’s salary percentages should be allocated according to the grant
contract. Throughout the fiscal year, the CEO and bookkeeper will meet regularly to review and incorporate any
new hires to determine how their salary is expected to be allocated. Additionally, the outsourced accountant will
review the allocations periodically throughout the year to ensure that it is being done properly. Over the next year,
as considered efficient, the Organization will implement a daily timesheet record, which requires each program
service employee to classify their daily time between federal grant programs. At the end of each week, staff
members will submit their timesheet to their supervisor. The supervisor will review each week’s daily timesheet
to confirm the staff are recognizing their activities properly. At the end of each month, the Organization’s
outsourced accountant, will review these timesheets and determine the proper allocation needed to record each
employee’s payroll activities in the accounting software by appropriate federal program. This process will allow
for the allocation of actuals to each federal program by the end of the month.
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.430(i)(viii) states, “Budget estimates alone do not qualify as support for charges to Federal awards, but
may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces
reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work
activity are identified and entered into the records in a timely manner; and (C) the non-Federal entity’s system of
internal controls includes processes to review after-the-fact interim charges made to a Federal award based on
budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award
is accurate, allowable, and properly allocated.”
Condition
During the course of the audit, we noted that employee time charged to multiple programs was based on an
estimated percentage of time established at the beginning of the fiscal year. The methodology is allowable when
an after-the-fact review of the estimate is completed to ensure the federal award is charged the proper amount.
The Organization reviews and adjusts allocations annually but makes changes on a prospective basis.
Cause
The Organization’s internal controls do not include a process for adjustments to estimated percentages for
charging employee time.
Effect
The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses
could include an over or understatement of salary expenses allocated to the federal grant.
Questioned Costs
None
Perspective Information
The finding noted related to four (4) pay periods tested where it was noted that no allocation based on actual time
spent on the grants was performed. It was noted that all employees tested were allocated 100% to the grant.
Identification as a repeat finding
There was a similar finding in the prior year.
Recommendation
We recommend the Organization develop a process to review the percentages used to charge employee time to
the Federal grants during the fiscal year and update accounting records accordingly. View of Responsible Official
Currently, the Organization’s CEO and the bookkeeper will review each grant’s funding details prior to the grant’s
fiscal year to determine how each employee’s salary percentages should be allocated according to the grant
contract. Throughout the fiscal year, the CEO and bookkeeper will meet regularly to review and incorporate any
new hires to determine how their salary is expected to be allocated. Additionally, the outsourced accountant will
review the allocations periodically throughout the year to ensure that it is being done properly. Over the next year,
as considered efficient, the Organization will implement a daily timesheet record, which requires each program
service employee to classify their daily time between federal grant programs. At the end of each week, staff
members will submit their timesheet to their supervisor. The supervisor will review each week’s daily timesheet
to confirm the staff are recognizing their activities properly. At the end of each month, the Organization’s
outsourced accountant, will review these timesheets and determine the proper allocation needed to record each
employee’s payroll activities in the accounting software by appropriate federal program. This process will allow
for the allocation of actuals to each federal program by the end of the month.
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.430(i)(viii) states, “Budget estimates alone do not qualify as support for charges to Federal awards, but
may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces
reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work
activity are identified and entered into the records in a timely manner; and (C) the non-Federal entity’s system of
internal controls includes processes to review after-the-fact interim charges made to a Federal award based on
budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award
is accurate, allowable, and properly allocated.”
Condition
During the course of the audit, we noted that employee time charged to multiple programs was based on an
estimated percentage of time established at the beginning of the fiscal year. The methodology is allowable when
an after-the-fact review of the estimate is completed to ensure the federal award is charged the proper amount.
The Organization reviews and adjusts allocations annually but makes changes on a prospective basis.
Cause
The Organization’s internal controls do not include a process for adjustments to estimated percentages for
charging employee time.
Effect
The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses
could include an over or understatement of salary expenses allocated to the federal grant.
Questioned Costs
None
Perspective Information
The finding noted related to four (4) pay periods tested where it was noted that no allocation based on actual time
spent on the grants was performed. It was noted that all employees tested were allocated 100% to the grant.
Identification as a repeat finding
There was a similar finding in the prior year.
Recommendation
We recommend the Organization develop a process to review the percentages used to charge employee time to
the Federal grants during the fiscal year and update accounting records accordingly. View of Responsible Official
Currently, the Organization’s CEO and the bookkeeper will review each grant’s funding details prior to the grant’s
fiscal year to determine how each employee’s salary percentages should be allocated according to the grant
contract. Throughout the fiscal year, the CEO and bookkeeper will meet regularly to review and incorporate any
new hires to determine how their salary is expected to be allocated. Additionally, the outsourced accountant will
review the allocations periodically throughout the year to ensure that it is being done properly. Over the next year,
as considered efficient, the Organization will implement a daily timesheet record, which requires each program
service employee to classify their daily time between federal grant programs. At the end of each week, staff
members will submit their timesheet to their supervisor. The supervisor will review each week’s daily timesheet
to confirm the staff are recognizing their activities properly. At the end of each month, the Organization’s
outsourced accountant, will review these timesheets and determine the proper allocation needed to record each
employee’s payroll activities in the accounting software by appropriate federal program. This process will allow
for the allocation of actuals to each federal program by the end of the month.
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.303(a) states, “The non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
A good internal control structure consists of proper segregation of duties where no one person is involved in all
aspects of a given transaction. This includes proper segregation of the following functions: authorization of
transactions, custody of assets, and recordkeeping.
Condition
During the course of the audit, we noted improper segregation of duties over cash disbursements and payroll:
Cash Disbursements:
During the year ended June 30, 2023, the bookkeeper had access to a signature stamp along with full access
to the general ledger. During our audit, we noted that there is inconsistently documented approval of nonpayroll
expenses.
Payroll:
During our audit, we noted that there is no documented review and approval of the biweekly payrolls or
timesheets.
Cause
The Organization has made a reasonable effort to design proper controls, but has faced challenges in
implementing them effectively, due to growth across multiple locations and frequent turnover.
Effect
Without proper segregation of duties or proper approval processes over cash disbursements, funds could be
misappropriated without detection by management or the Board. A lack of proper segregation over payroll
controls such as review and approval of biweekly payrolls and timesheets could result in ghost employees on the
Organization’s payroll or overpayment of hours and rates.
Questioned Costs
None
Perspective Information
During the audit we gained an understanding of the Organization’s internal controls through inquiry and
observation, and by examining one item from each of the three cycles: cash receipts, cash disbursements, and
payroll. We also tested a sample of forty (40) non-payroll cash disbursements and identified four (4) with no
authorization. The Organization does contract with an outside accounting firm who reviews all transactions and
performs reconciliations of the accounting records. Identification as a repeat finding
There was no similar finding in the prior year.
Recommendation
We recommend that the Organization implement policies and procedures, including reviews and reconciliations
where necessary, which ensure that no one individual is involved in all aspects of the cash disbursements and
payroll processes. The Organization should review these processes and segregate duties as much as considered
practical. We recommend that all non-payroll expenses be approved before disbursement and that all time sheets
and biweekly payrolls be reviewed and approved by the appropriate supervisor/management. We recommend that
control of the signature stamp be moved to a different member of the Carlisle office who does not have edit access
to the accounting software, and that it continues to only be used at the approval of the Board Chair.
View of Responsible Official
Currently, based on the capacity of the Organization’s staffing pool, the most efficient and effective means of
review and reconciliation of cash disbursements and payroll is the Organization’s Board Chair and CEO
reviewing the cash disbursements and payroll every two weeks, prior to payments being made. The Organization’s
bookkeeper forwards the Board Chair and CEO a listing of cash disbursements and payroll due with the suggested
payments. The Board Chair and CEO each will ask questions and formally “approve” or “disapprove” each
transaction, prior to any payments. Once reviewed, the CEO will contact the bookkeeper with the amounts to pay.
Also, the Organization’s outsourced accountant will review and approve each monthly bank reconciliation and
bank statement for all Organization accounts, as well as the monthly credit card statements. The outsourced
accountant does not have the ability to access the monthly bank statements and make purchases. Going forward,
the Organization’s Director of Communications will retain the Board Chair’s check stamp. The Director of
Communication will only be allowed to use the Board Chair’s check stamp once the Board Chair and CEO
approved payment.
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.303(a) states, “The non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
A good internal control structure consists of proper segregation of duties where no one person is involved in all
aspects of a given transaction. This includes proper segregation of the following functions: authorization of
transactions, custody of assets, and recordkeeping.
Condition
During the course of the audit, we noted improper segregation of duties over cash disbursements and payroll:
Cash Disbursements:
During the year ended June 30, 2023, the bookkeeper had access to a signature stamp along with full access
to the general ledger. During our audit, we noted that there is inconsistently documented approval of nonpayroll
expenses.
Payroll:
During our audit, we noted that there is no documented review and approval of the biweekly payrolls or
timesheets.
Cause
The Organization has made a reasonable effort to design proper controls, but has faced challenges in
implementing them effectively, due to growth across multiple locations and frequent turnover.
Effect
Without proper segregation of duties or proper approval processes over cash disbursements, funds could be
misappropriated without detection by management or the Board. A lack of proper segregation over payroll
controls such as review and approval of biweekly payrolls and timesheets could result in ghost employees on the
Organization’s payroll or overpayment of hours and rates.
Questioned Costs
None
Perspective Information
During the audit we gained an understanding of the Organization’s internal controls through inquiry and
observation, and by examining one item from each of the three cycles: cash receipts, cash disbursements, and
payroll. We also tested a sample of forty (40) non-payroll cash disbursements and identified four (4) with no
authorization. The Organization does contract with an outside accounting firm who reviews all transactions and
performs reconciliations of the accounting records. Identification as a repeat finding
There was no similar finding in the prior year.
Recommendation
We recommend that the Organization implement policies and procedures, including reviews and reconciliations
where necessary, which ensure that no one individual is involved in all aspects of the cash disbursements and
payroll processes. The Organization should review these processes and segregate duties as much as considered
practical. We recommend that all non-payroll expenses be approved before disbursement and that all time sheets
and biweekly payrolls be reviewed and approved by the appropriate supervisor/management. We recommend that
control of the signature stamp be moved to a different member of the Carlisle office who does not have edit access
to the accounting software, and that it continues to only be used at the approval of the Board Chair.
View of Responsible Official
Currently, based on the capacity of the Organization’s staffing pool, the most efficient and effective means of
review and reconciliation of cash disbursements and payroll is the Organization’s Board Chair and CEO
reviewing the cash disbursements and payroll every two weeks, prior to payments being made. The Organization’s
bookkeeper forwards the Board Chair and CEO a listing of cash disbursements and payroll due with the suggested
payments. The Board Chair and CEO each will ask questions and formally “approve” or “disapprove” each
transaction, prior to any payments. Once reviewed, the CEO will contact the bookkeeper with the amounts to pay.
Also, the Organization’s outsourced accountant will review and approve each monthly bank reconciliation and
bank statement for all Organization accounts, as well as the monthly credit card statements. The outsourced
accountant does not have the ability to access the monthly bank statements and make purchases. Going forward,
the Organization’s Director of Communications will retain the Board Chair’s check stamp. The Director of
Communication will only be allowed to use the Board Chair’s check stamp once the Board Chair and CEO
approved payment.
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.303(a) states, “The non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
A good internal control structure consists of proper segregation of duties where no one person is involved in all
aspects of a given transaction. This includes proper segregation of the following functions: authorization of
transactions, custody of assets, and recordkeeping.
Condition
During the course of the audit, we noted improper segregation of duties over cash disbursements and payroll:
Cash Disbursements:
During the year ended June 30, 2023, the bookkeeper had access to a signature stamp along with full access
to the general ledger. During our audit, we noted that there is inconsistently documented approval of nonpayroll
expenses.
Payroll:
During our audit, we noted that there is no documented review and approval of the biweekly payrolls or
timesheets.
Cause
The Organization has made a reasonable effort to design proper controls, but has faced challenges in
implementing them effectively, due to growth across multiple locations and frequent turnover.
Effect
Without proper segregation of duties or proper approval processes over cash disbursements, funds could be
misappropriated without detection by management or the Board. A lack of proper segregation over payroll
controls such as review and approval of biweekly payrolls and timesheets could result in ghost employees on the
Organization’s payroll or overpayment of hours and rates.
Questioned Costs
None
Perspective Information
During the audit we gained an understanding of the Organization’s internal controls through inquiry and
observation, and by examining one item from each of the three cycles: cash receipts, cash disbursements, and
payroll. We also tested a sample of forty (40) non-payroll cash disbursements and identified four (4) with no
authorization. The Organization does contract with an outside accounting firm who reviews all transactions and
performs reconciliations of the accounting records. Identification as a repeat finding
There was no similar finding in the prior year.
Recommendation
We recommend that the Organization implement policies and procedures, including reviews and reconciliations
where necessary, which ensure that no one individual is involved in all aspects of the cash disbursements and
payroll processes. The Organization should review these processes and segregate duties as much as considered
practical. We recommend that all non-payroll expenses be approved before disbursement and that all time sheets
and biweekly payrolls be reviewed and approved by the appropriate supervisor/management. We recommend that
control of the signature stamp be moved to a different member of the Carlisle office who does not have edit access
to the accounting software, and that it continues to only be used at the approval of the Board Chair.
View of Responsible Official
Currently, based on the capacity of the Organization’s staffing pool, the most efficient and effective means of
review and reconciliation of cash disbursements and payroll is the Organization’s Board Chair and CEO
reviewing the cash disbursements and payroll every two weeks, prior to payments being made. The Organization’s
bookkeeper forwards the Board Chair and CEO a listing of cash disbursements and payroll due with the suggested
payments. The Board Chair and CEO each will ask questions and formally “approve” or “disapprove” each
transaction, prior to any payments. Once reviewed, the CEO will contact the bookkeeper with the amounts to pay.
Also, the Organization’s outsourced accountant will review and approve each monthly bank reconciliation and
bank statement for all Organization accounts, as well as the monthly credit card statements. The outsourced
accountant does not have the ability to access the monthly bank statements and make purchases. Going forward,
the Organization’s Director of Communications will retain the Board Chair’s check stamp. The Director of
Communication will only be allowed to use the Board Chair’s check stamp once the Board Chair and CEO
approved payment.
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.430(i)(viii) states, “Budget estimates alone do not qualify as support for charges to Federal awards, but
may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces
reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work
activity are identified and entered into the records in a timely manner; and (C) the non-Federal entity’s system of
internal controls includes processes to review after-the-fact interim charges made to a Federal award based on
budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award
is accurate, allowable, and properly allocated.”
Condition
During the course of the audit, we noted that employee time charged to multiple programs was based on an
estimated percentage of time established at the beginning of the fiscal year. The methodology is allowable when
an after-the-fact review of the estimate is completed to ensure the federal award is charged the proper amount.
The Organization reviews and adjusts allocations annually but makes changes on a prospective basis.
Cause
The Organization’s internal controls do not include a process for adjustments to estimated percentages for
charging employee time.
Effect
The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses
could include an over or understatement of salary expenses allocated to the federal grant.
Questioned Costs
None
Perspective Information
The finding noted related to four (4) pay periods tested where it was noted that no allocation based on actual time
spent on the grants was performed. It was noted that all employees tested were allocated 100% to the grant.
Identification as a repeat finding
There was a similar finding in the prior year.
Recommendation
We recommend the Organization develop a process to review the percentages used to charge employee time to
the Federal grants during the fiscal year and update accounting records accordingly. View of Responsible Official
Currently, the Organization’s CEO and the bookkeeper will review each grant’s funding details prior to the grant’s
fiscal year to determine how each employee’s salary percentages should be allocated according to the grant
contract. Throughout the fiscal year, the CEO and bookkeeper will meet regularly to review and incorporate any
new hires to determine how their salary is expected to be allocated. Additionally, the outsourced accountant will
review the allocations periodically throughout the year to ensure that it is being done properly. Over the next year,
as considered efficient, the Organization will implement a daily timesheet record, which requires each program
service employee to classify their daily time between federal grant programs. At the end of each week, staff
members will submit their timesheet to their supervisor. The supervisor will review each week’s daily timesheet
to confirm the staff are recognizing their activities properly. At the end of each month, the Organization’s
outsourced accountant, will review these timesheets and determine the proper allocation needed to record each
employee’s payroll activities in the accounting software by appropriate federal program. This process will allow
for the allocation of actuals to each federal program by the end of the month.
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.430(i)(viii) states, “Budget estimates alone do not qualify as support for charges to Federal awards, but
may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces
reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work
activity are identified and entered into the records in a timely manner; and (C) the non-Federal entity’s system of
internal controls includes processes to review after-the-fact interim charges made to a Federal award based on
budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award
is accurate, allowable, and properly allocated.”
Condition
During the course of the audit, we noted that employee time charged to multiple programs was based on an
estimated percentage of time established at the beginning of the fiscal year. The methodology is allowable when
an after-the-fact review of the estimate is completed to ensure the federal award is charged the proper amount.
The Organization reviews and adjusts allocations annually but makes changes on a prospective basis.
Cause
The Organization’s internal controls do not include a process for adjustments to estimated percentages for
charging employee time.
Effect
The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses
could include an over or understatement of salary expenses allocated to the federal grant.
Questioned Costs
None
Perspective Information
The finding noted related to four (4) pay periods tested where it was noted that no allocation based on actual time
spent on the grants was performed. It was noted that all employees tested were allocated 100% to the grant.
Identification as a repeat finding
There was a similar finding in the prior year.
Recommendation
We recommend the Organization develop a process to review the percentages used to charge employee time to
the Federal grants during the fiscal year and update accounting records accordingly. View of Responsible Official
Currently, the Organization’s CEO and the bookkeeper will review each grant’s funding details prior to the grant’s
fiscal year to determine how each employee’s salary percentages should be allocated according to the grant
contract. Throughout the fiscal year, the CEO and bookkeeper will meet regularly to review and incorporate any
new hires to determine how their salary is expected to be allocated. Additionally, the outsourced accountant will
review the allocations periodically throughout the year to ensure that it is being done properly. Over the next year,
as considered efficient, the Organization will implement a daily timesheet record, which requires each program
service employee to classify their daily time between federal grant programs. At the end of each week, staff
members will submit their timesheet to their supervisor. The supervisor will review each week’s daily timesheet
to confirm the staff are recognizing their activities properly. At the end of each month, the Organization’s
outsourced accountant, will review these timesheets and determine the proper allocation needed to record each
employee’s payroll activities in the accounting software by appropriate federal program. This process will allow
for the allocation of actuals to each federal program by the end of the month.
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states
uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.430(i)(viii) states, “Budget estimates alone do not qualify as support for charges to Federal awards, but
may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces
reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work
activity are identified and entered into the records in a timely manner; and (C) the non-Federal entity’s system of
internal controls includes processes to review after-the-fact interim charges made to a Federal award based on
budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award
is accurate, allowable, and properly allocated.”
Condition
During the course of the audit, we noted that employee time charged to multiple programs was based on an
estimated percentage of time established at the beginning of the fiscal year. The methodology is allowable when
an after-the-fact review of the estimate is completed to ensure the federal award is charged the proper amount.
The Organization reviews and adjusts allocations annually but makes changes on a prospective basis.
Cause
The Organization’s internal controls do not include a process for adjustments to estimated percentages for
charging employee time.
Effect
The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses
could include an over or understatement of salary expenses allocated to the federal grant.
Questioned Costs
None
Perspective Information
The finding noted related to four (4) pay periods tested where it was noted that no allocation based on actual time
spent on the grants was performed. It was noted that all employees tested were allocated 100% to the grant.
Identification as a repeat finding
There was a similar finding in the prior year.
Recommendation
We recommend the Organization develop a process to review the percentages used to charge employee time to
the Federal grants during the fiscal year and update accounting records accordingly. View of Responsible Official
Currently, the Organization’s CEO and the bookkeeper will review each grant’s funding details prior to the grant’s
fiscal year to determine how each employee’s salary percentages should be allocated according to the grant
contract. Throughout the fiscal year, the CEO and bookkeeper will meet regularly to review and incorporate any
new hires to determine how their salary is expected to be allocated. Additionally, the outsourced accountant will
review the allocations periodically throughout the year to ensure that it is being done properly. Over the next year,
as considered efficient, the Organization will implement a daily timesheet record, which requires each program
service employee to classify their daily time between federal grant programs. At the end of each week, staff
members will submit their timesheet to their supervisor. The supervisor will review each week’s daily timesheet
to confirm the staff are recognizing their activities properly. At the end of each month, the Organization’s
outsourced accountant, will review these timesheets and determine the proper allocation needed to record each
employee’s payroll activities in the accounting software by appropriate federal program. This process will allow
for the allocation of actuals to each federal program by the end of the month.