FAC Explorer

Audit 362054

FY End
2024-06-30
Total Expended
$9.91M
Findings
2
Programs
9
Organization: Johnston-Lee Harnett Community Action, Incorporated (NC)
Year: 2024 Accepted: 2025-07-12
Auditor: Mpcompany LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
571143 2024-001 Material Weakness - B
1147585 2024-001 Material Weakness - B

Programs

ALN Program Spent Major Findings
93.600 Head Start $7.09M Yes 1
93.569 Community Services Block Grant $784,208 Yes 0
93.568 Low-Income Home Energy Assistance $390,869 - 0
10.558 Child and Adult Care Food Program $368,408 - 0
14.231 Emergency Solutions Grant Program $268,861 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $66,710 - 0
14.267 Continuum of Care Program $50,830 - 0
81.042 Weatherization Assistance for Low-Income Persons $27,182 - 0
97.024 Emergency Food and Shelter National Board Program $992 - 0

Contacts

Name Title Type
LB13HGN1QFE7 Lakisha Alston Auditee
9199342145 Michael Palazzo Auditor
No contacts on file

Notes to SEFA

Title: Oustanding Loans Accounting Policies: Expenditures reported on the Schedule are reported on the modified-cash basis of accounting. The modified-cash basis used by management differs in many respects from accounting principles generally accepted in the United States of America as detailed:(a) the acquisition of property and equipment is shown as an expense, which means that depreciation expense is never shown as such, nor is there ever a gain or loss to recognize on the disposal of property and equipment during its estimated useful life:(b) this schedule does not recognize prepaid expenses; rather, payments made in advance areshown as expenses of the reporting period:(c) no accrual has been made for unpaid vacation time even though such time has vested; instead, the expense is recognized in the period the vacation time is actually used.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. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The auditee has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. At June 30, 2024, there was an outstanding loan under the United States Department of Agriculture Rural Development for an amount of $1,262,104. Other than repayment of principal and interest, there was no continuing compliance requirement on this loan, and as such, is not reported on the Schedule.

Finding Details

Finding 2024-001
Type of Finding: Material weakness in internal controls over compliance. Criteria: 45 CFR Section §75.303 states the non-Federal entity must evaluate and monitor the entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards. Condition and Context: The organization did not have policies and procedures in place to provide reasonable assurance it is managing the Federal award in compliance with the applicable statutes, regulations, and terms and conditions. Questioned Costs: $102,145 Cause: The Association did not have a process in place to identify and communicate spending in excess of the approved budget and costs that would be subject to prior written approval requirements. Effect: Direct costs were charged to the grant award that may not have been allowable. There is the possibility that such costs would have to be refunded to the awarding agency if such determination is made. Additionally, significant costs were incurred throughout the year for other costs, such as staff bonuses and food purchases, that led to program incurring more costs than funding available. Recommendation: We recommend management implement procedures to ensure that financial information is appropriately communicated to management and those in charge of governance and identify expected purchases that may require prior written approval from the federal awarding agency. Responsible Official’s Response: The fiscal policies and procedures will be revised to include clear guidelines for effective communication with the governing body, ensuring that anticipated purchases requiring prior written approval from federal awarding agencies are properly identified and addressed.
Finding 2024-001
Type of Finding: Material weakness in internal controls over compliance. Criteria: 45 CFR Section §75.303 states the non-Federal entity must evaluate and monitor the entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards. Condition and Context: The organization did not have policies and procedures in place to provide reasonable assurance it is managing the Federal award in compliance with the applicable statutes, regulations, and terms and conditions. Questioned Costs: $102,145 Cause: The Association did not have a process in place to identify and communicate spending in excess of the approved budget and costs that would be subject to prior written approval requirements. Effect: Direct costs were charged to the grant award that may not have been allowable. There is the possibility that such costs would have to be refunded to the awarding agency if such determination is made. Additionally, significant costs were incurred throughout the year for other costs, such as staff bonuses and food purchases, that led to program incurring more costs than funding available. Recommendation: We recommend management implement procedures to ensure that financial information is appropriately communicated to management and those in charge of governance and identify expected purchases that may require prior written approval from the federal awarding agency. Responsible Official’s Response: The fiscal policies and procedures will be revised to include clear guidelines for effective communication with the governing body, ensuring that anticipated purchases requiring prior written approval from federal awarding agencies are properly identified and addressed.