FAC Explorer

Audit 361717

FY End
2024-06-30
Total Expended
$2.87M
Findings
8
Programs
4
Organization: Mending Hearts, Inc. (TN)
Year: 2024 Accepted: 2025-07-08
Auditor: Kraftcpas PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
570730 2024-002 Significant Deficiency - L
570731 2024-002 Significant Deficiency - L
570732 2024-002 Significant Deficiency - L
570733 2024-002 Significant Deficiency - L
1147172 2024-002 Significant Deficiency - L
1147173 2024-002 Significant Deficiency - L
1147174 2024-002 Significant Deficiency - L
1147175 2024-002 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $1.40M - 0
93.788 Opioid Str $530,438 Yes 1
20.507 Federal Transit Formula Grants $43,592 - 0
93.959 Block Grants for Prevention and Treatment of Substance Abuse $7,365 Yes 1

Contacts

Name Title Type
JACJLNHBKQ76 Katrinia Frierson Auditee
6153851696 Kenneth Youngstead Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Mending Hearts has elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. The accompanying Schedule of Expenditures of Federal Awards and State Financial Assistance (the “Schedule”) includes the federal and state award activity of Mending Hearts under programs of the federal government and the State of Tennessee for the year ended June 30, 2024. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and the State of Tennessee Audit Manual. Because the Schedule presents only a selected portion of the operations of Mending Hearts, it is not intended to and does not present the financial position, changes in net assets or cash flows of Mending Hearts.
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Mending Hearts has elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Mending Hearts has elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: STATE FINANCIAL ASSISTANCE - GRANT NOTES PAYABLE Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Mending Hearts has elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. The state grant notes payable listed subsequently are related to grant agreements that provide funding for the purchase or renovation of properties used to further Mending Hearts’ mission and increase their client capacity. Certain of these grants contain restrictive covenants requiring that, 1) for a predetermined period of time, generally varying from 15 to 20 years, the properties be subject to certain usage requirements, as outlined in the grant agreements, and 2) that Mending Hearts enter into a grant note payable requiring repayment of the grant funds in the event the restrictive covenants are not met. The grants are subject to forgiveness based on varying terms, either ratably or at the end of the compliance period outlined in the grant agreement. The grant notes are noninterest bearing, but, in the event of noncompliance with the restrictive covenants, are generally subject to interest on the outstanding balance at current rates of interest. The grant notes payable balances and transactions relating to these programs are included in Mending Hearts’ basic financial statements. The balance of loans outstanding at June 30, 2024 consists of: See the Notes to the SEFA for chart/table. The Schedule includes approximately $432,000 of expenditures incurred in the current year which have been submitted to the grantors for reimbursement, but not yet funded at year end. As such, the basic financial statements do not include these amounts in grants receivable or grant notes payable as of June 30, 2024, and these expenditures are not included in the balances listed above.

Finding Details

Finding 2024-002
2024-002 Untimely submission of data collection form and compliance with reporting requirements Federal Programs Information Funding Agency: U.S. Department of Health and Human Services Pass-Through Agency: TN Department of Mental Health & Substance Abuse Services 1) 93.959 Federal Block Grants for Prevention of Substance Abuse DGA 78087_2023-2024_023 and DGA 82413_2024-2026_204 2) 93.788 Opioid STR H79TI0883307 and DGA 78005_2022-2023_076 Criteria In accordance with 2 CFR Section 200.512(a), the audit must be complete, and the data collection form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditor’s report(s), or nine months after the end of the audit period, adjusted for any extension permitted by the Office of Management and Budget. Mending Hearts did not meet the nine-month deadline. Condition The audit, reporting package and data collection form for the year ended June 30, 2024, was not filed by the deadline of March 31, 2025, to the Federal Audit Clearinghouse. Cause Mending Hearts has been in a period of expansion of their operations and has also experienced administrative staff changes, resulting in limited resources available to produce a complete, accurate and timely closing of the books. Effect or potential effect Delays in submission of audit reports, reporting packages and data collection forms raise concerns about Mending Hearts’ reliability in adhering to accounting and compliance requirements in a timely manner, potentially jeopardizing its ability to secure funding. Recommendation We recommend that Mending Hearts’ ensure that administrative staffing is sufficient to support the accounting and financial reporting functions of the organization. Views of responsible officers Management acknowledges this finding and will address remediation in the accompanying management’s corrective action plan in appendix A.
Finding 2024-002
2024-002 Untimely submission of data collection form and compliance with reporting requirements Federal Programs Information Funding Agency: U.S. Department of Health and Human Services Pass-Through Agency: TN Department of Mental Health & Substance Abuse Services 1) 93.959 Federal Block Grants for Prevention of Substance Abuse DGA 78087_2023-2024_023 and DGA 82413_2024-2026_204 2) 93.788 Opioid STR H79TI0883307 and DGA 78005_2022-2023_076 Criteria In accordance with 2 CFR Section 200.512(a), the audit must be complete, and the data collection form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditor’s report(s), or nine months after the end of the audit period, adjusted for any extension permitted by the Office of Management and Budget. Mending Hearts did not meet the nine-month deadline. Condition The audit, reporting package and data collection form for the year ended June 30, 2024, was not filed by the deadline of March 31, 2025, to the Federal Audit Clearinghouse. Cause Mending Hearts has been in a period of expansion of their operations and has also experienced administrative staff changes, resulting in limited resources available to produce a complete, accurate and timely closing of the books. Effect or potential effect Delays in submission of audit reports, reporting packages and data collection forms raise concerns about Mending Hearts’ reliability in adhering to accounting and compliance requirements in a timely manner, potentially jeopardizing its ability to secure funding. Recommendation We recommend that Mending Hearts’ ensure that administrative staffing is sufficient to support the accounting and financial reporting functions of the organization. Views of responsible officers Management acknowledges this finding and will address remediation in the accompanying management’s corrective action plan in appendix A.
Finding 2024-002
2024-002 Untimely submission of data collection form and compliance with reporting requirements Federal Programs Information Funding Agency: U.S. Department of Health and Human Services Pass-Through Agency: TN Department of Mental Health & Substance Abuse Services 1) 93.959 Federal Block Grants for Prevention of Substance Abuse DGA 78087_2023-2024_023 and DGA 82413_2024-2026_204 2) 93.788 Opioid STR H79TI0883307 and DGA 78005_2022-2023_076 Criteria In accordance with 2 CFR Section 200.512(a), the audit must be complete, and the data collection form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditor’s report(s), or nine months after the end of the audit period, adjusted for any extension permitted by the Office of Management and Budget. Mending Hearts did not meet the nine-month deadline. Condition The audit, reporting package and data collection form for the year ended June 30, 2024, was not filed by the deadline of March 31, 2025, to the Federal Audit Clearinghouse. Cause Mending Hearts has been in a period of expansion of their operations and has also experienced administrative staff changes, resulting in limited resources available to produce a complete, accurate and timely closing of the books. Effect or potential effect Delays in submission of audit reports, reporting packages and data collection forms raise concerns about Mending Hearts’ reliability in adhering to accounting and compliance requirements in a timely manner, potentially jeopardizing its ability to secure funding. Recommendation We recommend that Mending Hearts’ ensure that administrative staffing is sufficient to support the accounting and financial reporting functions of the organization. Views of responsible officers Management acknowledges this finding and will address remediation in the accompanying management’s corrective action plan in appendix A.
Finding 2024-002
2024-002 Untimely submission of data collection form and compliance with reporting requirements Federal Programs Information Funding Agency: U.S. Department of Health and Human Services Pass-Through Agency: TN Department of Mental Health & Substance Abuse Services 1) 93.959 Federal Block Grants for Prevention of Substance Abuse DGA 78087_2023-2024_023 and DGA 82413_2024-2026_204 2) 93.788 Opioid STR H79TI0883307 and DGA 78005_2022-2023_076 Criteria In accordance with 2 CFR Section 200.512(a), the audit must be complete, and the data collection form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditor’s report(s), or nine months after the end of the audit period, adjusted for any extension permitted by the Office of Management and Budget. Mending Hearts did not meet the nine-month deadline. Condition The audit, reporting package and data collection form for the year ended June 30, 2024, was not filed by the deadline of March 31, 2025, to the Federal Audit Clearinghouse. Cause Mending Hearts has been in a period of expansion of their operations and has also experienced administrative staff changes, resulting in limited resources available to produce a complete, accurate and timely closing of the books. Effect or potential effect Delays in submission of audit reports, reporting packages and data collection forms raise concerns about Mending Hearts’ reliability in adhering to accounting and compliance requirements in a timely manner, potentially jeopardizing its ability to secure funding. Recommendation We recommend that Mending Hearts’ ensure that administrative staffing is sufficient to support the accounting and financial reporting functions of the organization. Views of responsible officers Management acknowledges this finding and will address remediation in the accompanying management’s corrective action plan in appendix A.
Finding 2024-002
2024-002 Untimely submission of data collection form and compliance with reporting requirements Federal Programs Information Funding Agency: U.S. Department of Health and Human Services Pass-Through Agency: TN Department of Mental Health & Substance Abuse Services 1) 93.959 Federal Block Grants for Prevention of Substance Abuse DGA 78087_2023-2024_023 and DGA 82413_2024-2026_204 2) 93.788 Opioid STR H79TI0883307 and DGA 78005_2022-2023_076 Criteria In accordance with 2 CFR Section 200.512(a), the audit must be complete, and the data collection form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditor’s report(s), or nine months after the end of the audit period, adjusted for any extension permitted by the Office of Management and Budget. Mending Hearts did not meet the nine-month deadline. Condition The audit, reporting package and data collection form for the year ended June 30, 2024, was not filed by the deadline of March 31, 2025, to the Federal Audit Clearinghouse. Cause Mending Hearts has been in a period of expansion of their operations and has also experienced administrative staff changes, resulting in limited resources available to produce a complete, accurate and timely closing of the books. Effect or potential effect Delays in submission of audit reports, reporting packages and data collection forms raise concerns about Mending Hearts’ reliability in adhering to accounting and compliance requirements in a timely manner, potentially jeopardizing its ability to secure funding. Recommendation We recommend that Mending Hearts’ ensure that administrative staffing is sufficient to support the accounting and financial reporting functions of the organization. Views of responsible officers Management acknowledges this finding and will address remediation in the accompanying management’s corrective action plan in appendix A.
Finding 2024-002
2024-002 Untimely submission of data collection form and compliance with reporting requirements Federal Programs Information Funding Agency: U.S. Department of Health and Human Services Pass-Through Agency: TN Department of Mental Health & Substance Abuse Services 1) 93.959 Federal Block Grants for Prevention of Substance Abuse DGA 78087_2023-2024_023 and DGA 82413_2024-2026_204 2) 93.788 Opioid STR H79TI0883307 and DGA 78005_2022-2023_076 Criteria In accordance with 2 CFR Section 200.512(a), the audit must be complete, and the data collection form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditor’s report(s), or nine months after the end of the audit period, adjusted for any extension permitted by the Office of Management and Budget. Mending Hearts did not meet the nine-month deadline. Condition The audit, reporting package and data collection form for the year ended June 30, 2024, was not filed by the deadline of March 31, 2025, to the Federal Audit Clearinghouse. Cause Mending Hearts has been in a period of expansion of their operations and has also experienced administrative staff changes, resulting in limited resources available to produce a complete, accurate and timely closing of the books. Effect or potential effect Delays in submission of audit reports, reporting packages and data collection forms raise concerns about Mending Hearts’ reliability in adhering to accounting and compliance requirements in a timely manner, potentially jeopardizing its ability to secure funding. Recommendation We recommend that Mending Hearts’ ensure that administrative staffing is sufficient to support the accounting and financial reporting functions of the organization. Views of responsible officers Management acknowledges this finding and will address remediation in the accompanying management’s corrective action plan in appendix A.
Finding 2024-002
2024-002 Untimely submission of data collection form and compliance with reporting requirements Federal Programs Information Funding Agency: U.S. Department of Health and Human Services Pass-Through Agency: TN Department of Mental Health & Substance Abuse Services 1) 93.959 Federal Block Grants for Prevention of Substance Abuse DGA 78087_2023-2024_023 and DGA 82413_2024-2026_204 2) 93.788 Opioid STR H79TI0883307 and DGA 78005_2022-2023_076 Criteria In accordance with 2 CFR Section 200.512(a), the audit must be complete, and the data collection form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditor’s report(s), or nine months after the end of the audit period, adjusted for any extension permitted by the Office of Management and Budget. Mending Hearts did not meet the nine-month deadline. Condition The audit, reporting package and data collection form for the year ended June 30, 2024, was not filed by the deadline of March 31, 2025, to the Federal Audit Clearinghouse. Cause Mending Hearts has been in a period of expansion of their operations and has also experienced administrative staff changes, resulting in limited resources available to produce a complete, accurate and timely closing of the books. Effect or potential effect Delays in submission of audit reports, reporting packages and data collection forms raise concerns about Mending Hearts’ reliability in adhering to accounting and compliance requirements in a timely manner, potentially jeopardizing its ability to secure funding. Recommendation We recommend that Mending Hearts’ ensure that administrative staffing is sufficient to support the accounting and financial reporting functions of the organization. Views of responsible officers Management acknowledges this finding and will address remediation in the accompanying management’s corrective action plan in appendix A.
Finding 2024-002
2024-002 Untimely submission of data collection form and compliance with reporting requirements Federal Programs Information Funding Agency: U.S. Department of Health and Human Services Pass-Through Agency: TN Department of Mental Health & Substance Abuse Services 1) 93.959 Federal Block Grants for Prevention of Substance Abuse DGA 78087_2023-2024_023 and DGA 82413_2024-2026_204 2) 93.788 Opioid STR H79TI0883307 and DGA 78005_2022-2023_076 Criteria In accordance with 2 CFR Section 200.512(a), the audit must be complete, and the data collection form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditor’s report(s), or nine months after the end of the audit period, adjusted for any extension permitted by the Office of Management and Budget. Mending Hearts did not meet the nine-month deadline. Condition The audit, reporting package and data collection form for the year ended June 30, 2024, was not filed by the deadline of March 31, 2025, to the Federal Audit Clearinghouse. Cause Mending Hearts has been in a period of expansion of their operations and has also experienced administrative staff changes, resulting in limited resources available to produce a complete, accurate and timely closing of the books. Effect or potential effect Delays in submission of audit reports, reporting packages and data collection forms raise concerns about Mending Hearts’ reliability in adhering to accounting and compliance requirements in a timely manner, potentially jeopardizing its ability to secure funding. Recommendation We recommend that Mending Hearts’ ensure that administrative staffing is sufficient to support the accounting and financial reporting functions of the organization. Views of responsible officers Management acknowledges this finding and will address remediation in the accompanying management’s corrective action plan in appendix A.