Audit 361057

Reference Number 2024-005 Equipment Management (Federal and State) Criteria: VOCA Grantee Responsibilities and Conditions stipulate requirements related to property and equipment purchased in whole or in part with grant funds (Section 7 Equipment Requirements): 7.1B states at least every two (2) years, grantee must take a physical inventory and reconcile the results with property records. 7.1C outlines the minimum requirements of the information that must be maintained for property/inventory (description, serial number, etc.). 7.1D states the grantee shall permanently identify all such equipment by appropriate tags or labels affixed to the equipment. Condition: Evidence of the inventory count performed in FY24 could not be verified as the column labeled "verified by and date" was left blank for all items. The Center was unable to provide an updated, comprehensive listing of all property/equipment purchased in whole or in part with VOCA funding, including the minimum information required under Section 7.1C. We were unable to observe equipment inventory tags affixed to items acquired within FY24. Cause and Effect: The Center did not adhere to its policies and procedures regarding an annual physical inventory of equipment. Additionally, the Center appears to have changed the format of its inventory records, leading to the exclusion of the minimum information required by VOCA. Questioned Cost: None reported Repeat Finding: N/A Recommendation: It is recommended the Center update the design of its written policies and procedures regarding Equipment Management to ensure all items required under Section 7 Equipment Requirements are addressed. As best practice, the Center should consider requiring identification of the date the physical count was performed, the results/conclusion of the count and who performed the count, evidenced by their signature(s). Views of Responsible Officials: See management's corrective action plan

Reference Number 2024-006 Prepaid Expenses and Requests for Reimbursement (Federal and State) Criteria: Requests for reimbursement (RFRs) in connection with CACTX grants are submitted on a monthly basis in accordance with the terms and requirements stipulated by the Center's grantor, CACTX. Costs and associated activates must be incurred within the grant period and specific claim period (month) to be eligible for reimbursement. Claimed costs must also be allowable under the grant terms, Uniform Guidance and/or Texas Grant Management Standards. Allowable direct costs applicable to a specific contract or funding source may be claimed fromthat funding source at 100%. Other allowable costs benefiting multiple programs or funding sources are subject to the Center's Cost Allocation Plan (CAP) as prescribed by CACTX: calculated each month based upon the time and efforts of the organization's personnel for the respective month. CAP rates are dynamic in nature and change frommonth to month. Consequently, for a recurring or fixed monthly costs/expenses, including amortization of prepaid contracts, the amount that may be claimed each month changes based on each respective month's CAP. Condition: For the fiscal year under audit, the Center had 3 grant agreements in effect with CACTX: 1 VOCA (term October 1, 2023 - September 30, 2024) and 2 HHSC (terms September 1, 2023 - August 31, 2024; September 1, 2024 - August 31, 2025). In review of VOCA and HHSC expenses claimed in the Center's monthly RFR's, the following exceptions were noted for payments made in connection with contracts: - Contract period from January 10, 2024 - January 10, 2025, paid in-full in January 2024: for both VOCA and HHSC, the Center's RFR claimed reimbursement for the entire amount paid; however, the term of the contract extended beyond the grant periods for both VOCA and HHSC. - Contract period fromFebruary 7, 2024 - February 6, 2025, paid in-full in February 2024: the Center's RFR claimed reimbursement for 8 months (VOCA) and 7 months (HHSC). - Contract period from April 20, 2024 - October 19, 2024, paid in-full in April 2024: for both VOCA and HHSC, the Center's RFR claimed reimbursement for the entire amount paid; however, the term of the contract extended beyond the grant periods for both VOCA and HHSC. - Contract period from May 5, 2024 - May 4, 2025, paid in-full in May 2024: the Center's RFR claimed reimbursement for 5 months (VOCA) and 4 months (HHSC). - Contract period from August 1, 2024 - July 31, 2025, paid in-full in August 2024: the Center's RFR appropriately claimed 1 month for HHSC; however, the RFR claim 2 months for VOCA (August and September). For VOCA, the September RFR claimed the cost again, causing 3months to be claimed within a 2-month period. For HHSC, the September RFR claimed 11 months of the contract. Cause and Effect: The Center did not adhere to the accrual basis of accounting required to be applied to costs claimed on its monthly RFRs submitted to CACTX. Under the accrual method, prepaid contracts should be amortized over the contract term (benefit period). Consequently, costs were inappropriately included/excluded in the Center's monthly RFRs submitted to CACTX. Questioned Cost: None reported Repeat Finding: N/A Recommendation: It is recommended the Center evaluate and update its internal controls and procedures to ensure costs are appropriately considered when preparing the Center's monthly RFRs. Views of Responsible Officials: See management's corrective action plan

Reference Number 2024-005 Equipment Management (Federal and State) Criteria: VOCA Grantee Responsibilities and Conditions stipulate requirements related to property and equipment purchased in whole or in part with grant funds (Section 7 Equipment Requirements): 7.1B states at least every two (2) years, grantee must take a physical inventory and reconcile the results with property records. 7.1C outlines the minimum requirements of the information that must be maintained for property/inventory (description, serial number, etc.). 7.1D states the grantee shall permanently identify all such equipment by appropriate tags or labels affixed to the equipment. Condition: Evidence of the inventory count performed in FY24 could not be verified as the column labeled "verified by and date" was left blank for all items. The Center was unable to provide an updated, comprehensive listing of all property/equipment purchased in whole or in part with VOCA funding, including the minimum information required under Section 7.1C. We were unable to observe equipment inventory tags affixed to items acquired within FY24. Cause and Effect: The Center did not adhere to its policies and procedures regarding an annual physical inventory of equipment. Additionally, the Center appears to have changed the format of its inventory records, leading to the exclusion of the minimum information required by VOCA. Questioned Cost: None reported Repeat Finding: N/A Recommendation: It is recommended the Center update the design of its written policies and procedures regarding Equipment Management to ensure all items required under Section 7 Equipment Requirements are addressed. As best practice, the Center should consider requiring identification of the date the physical count was performed, the results/conclusion of the count and who performed the count, evidenced by their signature(s). Views of Responsible Officials: See management's corrective action plan

Reference Number 2024-006 Prepaid Expenses and Requests for Reimbursement (Federal and State) Criteria: Requests for reimbursement (RFRs) in connection with CACTX grants are submitted on a monthly basis in accordance with the terms and requirements stipulated by the Center's grantor, CACTX. Costs and associated activates must be incurred within the grant period and specific claim period (month) to be eligible for reimbursement. Claimed costs must also be allowable under the grant terms, Uniform Guidance and/or Texas Grant Management Standards. Allowable direct costs applicable to a specific contract or funding source may be claimed fromthat funding source at 100%. Other allowable costs benefiting multiple programs or funding sources are subject to the Center's Cost Allocation Plan (CAP) as prescribed by CACTX: calculated each month based upon the time and efforts of the organization's personnel for the respective month. CAP rates are dynamic in nature and change frommonth to month. Consequently, for a recurring or fixed monthly costs/expenses, including amortization of prepaid contracts, the amount that may be claimed each month changes based on each respective month's CAP. Condition: For the fiscal year under audit, the Center had 3 grant agreements in effect with CACTX: 1 VOCA (term October 1, 2023 - September 30, 2024) and 2 HHSC (terms September 1, 2023 - August 31, 2024; September 1, 2024 - August 31, 2025). In review of VOCA and HHSC expenses claimed in the Center's monthly RFR's, the following exceptions were noted for payments made in connection with contracts: - Contract period from January 10, 2024 - January 10, 2025, paid in-full in January 2024: for both VOCA and HHSC, the Center's RFR claimed reimbursement for the entire amount paid; however, the term of the contract extended beyond the grant periods for both VOCA and HHSC. - Contract period fromFebruary 7, 2024 - February 6, 2025, paid in-full in February 2024: the Center's RFR claimed reimbursement for 8 months (VOCA) and 7 months (HHSC). - Contract period from April 20, 2024 - October 19, 2024, paid in-full in April 2024: for both VOCA and HHSC, the Center's RFR claimed reimbursement for the entire amount paid; however, the term of the contract extended beyond the grant periods for both VOCA and HHSC. - Contract period from May 5, 2024 - May 4, 2025, paid in-full in May 2024: the Center's RFR claimed reimbursement for 5 months (VOCA) and 4 months (HHSC). - Contract period from August 1, 2024 - July 31, 2025, paid in-full in August 2024: the Center's RFR appropriately claimed 1 month for HHSC; however, the RFR claim 2 months for VOCA (August and September). For VOCA, the September RFR claimed the cost again, causing 3months to be claimed within a 2-month period. For HHSC, the September RFR claimed 11 months of the contract. Cause and Effect: The Center did not adhere to the accrual basis of accounting required to be applied to costs claimed on its monthly RFRs submitted to CACTX. Under the accrual method, prepaid contracts should be amortized over the contract term (benefit period). Consequently, costs were inappropriately included/excluded in the Center's monthly RFRs submitted to CACTX. Questioned Cost: None reported Repeat Finding: N/A Recommendation: It is recommended the Center evaluate and update its internal controls and procedures to ensure costs are appropriately considered when preparing the Center's monthly RFRs. Views of Responsible Officials: See management's corrective action plan