FAC Explorer

Audit 362889

FY End
2023-09-30
Total Expended
$3.58M
Findings
6
Programs
4
Organization: Great Lakes Recovery Centers, Inc. (MI)
Year: 2023 Accepted: 2025-07-23
Auditor: Wipfli LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
571853 2023-003 Significant Deficiency - P
571854 2023-004 Material Weakness - AB
571855 2023-003 Significant Deficiency - P
1148295 2023-003 Significant Deficiency - P
1148296 2023-004 Material Weakness - AB
1148297 2023-003 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $2.29M Yes 1
93.498 Covid-19 Provider Relief Fund $779,720 Yes 2
93.493 Congressional Directives $387,216 - 0
14.218 Community Development Block Grants/entitlement Grants $126,317 - 0

Contacts

Name Title Type
MVE4AJNLX7L5 Greg Toutant Auditee
9062289694 Stephanie Cavadeas Auditor
No contacts on file

Notes to SEFA

Title: Federal Loans With Continuing Compliance Requirements Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal activity of Great Lakes Recovery Centers, Inc. under programs of the federal governments for the year ended September 30, 2023. The information in this schedule is presented in accordance with requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Because the schedule presents only a selected portion of the operations of Great Lakes Recovery Centers, Inc., it is not intended to and does not present the financial position, changes in net assets or cash flows of Great Lakes Recovery Centers, Inc. De Minimis Rate Used: N Rate Explanation: Great Lakes Recovery Centers, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Great Lakes Recovery Centers, Inc. has a loan with the United States Department of Agriculture under its Community Facilities Loans and Grants cluster. Balances and transactions related to this program is included in Great Lakes Recovery Centers, Inc.'s basic consolidated financial statements. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the Schedule. The balance of loans outstanding at September 30, 2024, under the Community Facilities Loans and Grants cluster assistance listing 10.766 was $2,237,800.
Title: Basis of Accounting Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal activity of Great Lakes Recovery Centers, Inc. under programs of the federal governments for the year ended September 30, 2023. The information in this schedule is presented in accordance with requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Because the schedule presents only a selected portion of the operations of Great Lakes Recovery Centers, Inc., it is not intended to and does not present the financial position, changes in net assets or cash flows of Great Lakes Recovery Centers, Inc. De Minimis Rate Used: N Rate Explanation: Great Lakes Recovery Centers, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. 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. Pass-through entity identifying numbers are presented where available.
Title: Sub-Recipients Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal activity of Great Lakes Recovery Centers, Inc. under programs of the federal governments for the year ended September 30, 2023. The information in this schedule is presented in accordance with requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Because the schedule presents only a selected portion of the operations of Great Lakes Recovery Centers, Inc., it is not intended to and does not present the financial position, changes in net assets or cash flows of Great Lakes Recovery Centers, Inc. De Minimis Rate Used: N Rate Explanation: Great Lakes Recovery Centers, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Great Lakes Recovery Centers, Inc. does not have any sub-recipients of federal or state awards.
Title: Indirect Cost Rate Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal activity of Great Lakes Recovery Centers, Inc. under programs of the federal governments for the year ended September 30, 2023. The information in this schedule is presented in accordance with requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Because the schedule presents only a selected portion of the operations of Great Lakes Recovery Centers, Inc., it is not intended to and does not present the financial position, changes in net assets or cash flows of Great Lakes Recovery Centers, Inc. De Minimis Rate Used: N Rate Explanation: Great Lakes Recovery Centers, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Great Lakes Recovery Centers, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2023-003
Finding 2023-003 Late Filing of Reporting Package and Data Collection Form U.S. Department of Housing and Urban Development - Community Facilities Loans and Grants Cluster - AL #10.766 Grant Number: N/A Grant Period: N/A U.S. Department of Health and Human Services - Provider Relief Funds - AL #93.498 Grant Number: N/A Grant Period: Period 4 - Deadline to Use Funds, December 31, 2022 Questioned Costs: None How the questioned costs were computed: N/A Condition As required by the Uniform Guidance, Great Lakes Recovery Centers, Inc.'s audited financial statements for the year ended September 30, 2023 were due to the federal single audit clearinghouse by June 30, 2024. Great Lakes Recovery Centers, Inc.'s September 30, 2023 audited financial statements were not completed for submission to the federal audit clearinghouse until after June 30, 2024. Criteria 2 CFR Part 200, Subpart F Section 200.512 Report Submission requires the audit, the data collection form, and the reporting package to be submitted within 30 calendar days after the auditee receives the auditor's report or nine months after the end of the audit period (whichever is earlier). Cause Great Lakes Recovery Centers, Inc. did not have sufficient audit preparation for the audit to be completed in time to submit the audit, reporting package, and data collection form on a timely basis. Effect A significant deficiency in internal control over compliance and an instance of noncompliance exists due to failure to adequately prepare for the audit in order to provide the audit, reporting package, and data collection form in a timely manner in order to meet audit submission deadlines. Recommendation We recommend that Great Lakes Recovery Centers, Inc. evaluate its existing resources and capacity and implement a plan to adequately prepare for the audit to ensure submission timelines are met. View of Responsible Officials Great Lakes Recovery Centers, Inc. agrees with the finding and is committed to a corrective action.
Finding 2023-004
Finding 2023-004 - Activities Allowed / Unallowed, Allowable Costs - Provider Relief Funds U.S. Department of Health and Human Services - Provider Relief Funds - AL #93.498 Grant Number: N/A Grant Period: None provided - but this finding relates to Period 4 for payments received between July 1, 2021 and December 31, 2021, with a deadline to use the funds of December 31, 2022. Questioned Costs: $779,720 How the questioned costs were computed: None of the federal expenditures as reported on the Schedule of Expenditures of Federal Awards for the year ended September 30, 2023, were supported by adequate documentation regarding the allowability of the costs in preventing, preparing for, or responding to coronavirus. Condition Great Lakes Recovery Centers, Inc. was not able to provide sufficient documentation to support that the payroll and personnel costs reported to the Department of Health and Human Services on its Phase 4 portal report were allowable in accordance with the terms and conditions of the award, specifically, that the payments will only be used to prevent, prepare for, and respond to coronavirus. Great Lakes Recovery Centers, Inc. is taking the position that because they were considered an essential business by the State of Michigan, that any and all activities performed by its personnel were allowable and were to prevent, prepare for, and respond to coronavirus without further substantiation necessary. However, generally accepted auditing standards requires auditors to obtain sufficient appropriate audit evidence as to the allowability of costs in accordance with program requirements and Wipfli LLP was unable to do so based on: (1) there was no identification of which personnel were included in the reported expenses figures and (2) there was no mechanism for Great Lakes Recovery Centers, Inc. to gather information regarding what those personnel may have been doing that met the criteria to prevent, prepare for, or respond to coronavirus. Criteria Great Lakes Recovery Centers, Inc. accepted and utilized funding from the Department of Health and Human Services, through the Health Resources and Services Administration. According to www.hrsa.gov, If a recipient receives payment from funds appropriated for the Relief Fund, and retains that payment for at lest 90 days without contacting HHS regarding remittance of those funds, the Recipient is deemed to have accepted the Terms and Conditions. One of the terms and conditions is that payments will only be used to prevent, prepare for, and respond to coronavirus, and that the payment shall reimburse the grant recipient only for health care related expenses (or lost revenues) that are attributable to coronavirus. Great Lakes Recovery Centers, Inc. reported on its Period 4 portal report that 100% of the costs reported were related to payroll and other personnel costs and it did not elect the lost revenue option. Under program guidance for Period 4, allowable G&A expense examples included, but were not limited to personnel such as direct employee expenses for staff such as nurses, contractor payroll administrators, or support personnel and related fringe benefits. Cause Great Lakes Recovery Centers, Inc. was not sufficiently aware of the terms and conditions of the funding to be able to comply with the requirements as laid out in the Criteria section. As such, Great Lakes Recovery Centers, Inc. was not able to design and implement internal controls over compliance, or to comply with the terms and conditions of the award. Effect Because there was not sufficient, appropriate audit evidence to support the allowability of costs in accordance with the terms and conditions of the Provider Relief Funding, Great Lakes Recovery Centers, Inc. was not in compliance with those terms and conditions and all of the costs reported in 2023 are questioned. Recommendation Going forward, Great Lakes Recovery Centers, Inc. will not be reporting any federal expenditures under the Provider Relief Funds as it has not received any more payments. However, Wipfli recommends that Great Lakes Recovery Centers, Inc. ensure that any federal, state, or local funding that includes terms and conditions is evaluated carefully and that a system of internal controls over compliance with those terms and conditions is designed, implemented, and monitored appropriately. View of Responsible Officials Great Lakes Recovery Centers, Inc. agrees with the finding and is committed to a corrective action. As further clarification regarding finding 2023-004, Great Lakes Recovery Centers, Inc. applied for Health Resources and Services Administration (HRSA) relief funding and was awarded by HRSA funding based on the loss of revenue during various reporting periods. Great Lakes Recovery Centers, Inc. did not ask for a specific amount of funding as HRSA determined the amount eligible for the organization based on the changes in revenue of certain time periods. The category that GLRC indicated they would utilize the funds for surrounded employee/personnel expenses responding to the pandemic. Great Lakes Recovery Centers, Inc. had more than enough eligible personnel expenses that exceeded the amount of the HRSA award. Great Lakes Recovery Centers, Inc. throughout the pandemic time period fell under the Michigan Operational Mandate as an essential service and was required to continue operations, in which Great Lakes Recovery Centers, Inc. did. The supplemental accounting memo on how to record and reconcile HRSA funding from the Federal Government was not issued until well after the HRSA COVID funding was received. Great Lakes Recovery Centers, Inc. was not aware of the supplemental accounting memo stipulating the tieback to exact personnel for retrospective coding, therefore, there is only lump sum personnel expenditures for review. The retrospective application of HRSA relief funding accounting requirements is not unusual for many awardees from that time period, which makes it more difficult to reconcile the audit requirements to that time period.
Finding 2023-003
Finding 2023-003 Late Filing of Reporting Package and Data Collection Form U.S. Department of Housing and Urban Development - Community Facilities Loans and Grants Cluster - AL #10.766 Grant Number: N/A Grant Period: N/A U.S. Department of Health and Human Services - Provider Relief Funds - AL #93.498 Grant Number: N/A Grant Period: Period 4 - Deadline to Use Funds, December 31, 2022 Questioned Costs: None How the questioned costs were computed: N/A Condition As required by the Uniform Guidance, Great Lakes Recovery Centers, Inc.'s audited financial statements for the year ended September 30, 2023 were due to the federal single audit clearinghouse by June 30, 2024. Great Lakes Recovery Centers, Inc.'s September 30, 2023 audited financial statements were not completed for submission to the federal audit clearinghouse until after June 30, 2024. Criteria 2 CFR Part 200, Subpart F Section 200.512 Report Submission requires the audit, the data collection form, and the reporting package to be submitted within 30 calendar days after the auditee receives the auditor's report or nine months after the end of the audit period (whichever is earlier). Cause Great Lakes Recovery Centers, Inc. did not have sufficient audit preparation for the audit to be completed in time to submit the audit, reporting package, and data collection form on a timely basis. Effect A significant deficiency in internal control over compliance and an instance of noncompliance exists due to failure to adequately prepare for the audit in order to provide the audit, reporting package, and data collection form in a timely manner in order to meet audit submission deadlines. Recommendation We recommend that Great Lakes Recovery Centers, Inc. evaluate its existing resources and capacity and implement a plan to adequately prepare for the audit to ensure submission timelines are met. View of Responsible Officials Great Lakes Recovery Centers, Inc. agrees with the finding and is committed to a corrective action.
Finding 2023-003
Finding 2023-003 Late Filing of Reporting Package and Data Collection Form U.S. Department of Housing and Urban Development - Community Facilities Loans and Grants Cluster - AL #10.766 Grant Number: N/A Grant Period: N/A U.S. Department of Health and Human Services - Provider Relief Funds - AL #93.498 Grant Number: N/A Grant Period: Period 4 - Deadline to Use Funds, December 31, 2022 Questioned Costs: None How the questioned costs were computed: N/A Condition As required by the Uniform Guidance, Great Lakes Recovery Centers, Inc.'s audited financial statements for the year ended September 30, 2023 were due to the federal single audit clearinghouse by June 30, 2024. Great Lakes Recovery Centers, Inc.'s September 30, 2023 audited financial statements were not completed for submission to the federal audit clearinghouse until after June 30, 2024. Criteria 2 CFR Part 200, Subpart F Section 200.512 Report Submission requires the audit, the data collection form, and the reporting package to be submitted within 30 calendar days after the auditee receives the auditor's report or nine months after the end of the audit period (whichever is earlier). Cause Great Lakes Recovery Centers, Inc. did not have sufficient audit preparation for the audit to be completed in time to submit the audit, reporting package, and data collection form on a timely basis. Effect A significant deficiency in internal control over compliance and an instance of noncompliance exists due to failure to adequately prepare for the audit in order to provide the audit, reporting package, and data collection form in a timely manner in order to meet audit submission deadlines. Recommendation We recommend that Great Lakes Recovery Centers, Inc. evaluate its existing resources and capacity and implement a plan to adequately prepare for the audit to ensure submission timelines are met. View of Responsible Officials Great Lakes Recovery Centers, Inc. agrees with the finding and is committed to a corrective action.
Finding 2023-004
Finding 2023-004 - Activities Allowed / Unallowed, Allowable Costs - Provider Relief Funds U.S. Department of Health and Human Services - Provider Relief Funds - AL #93.498 Grant Number: N/A Grant Period: None provided - but this finding relates to Period 4 for payments received between July 1, 2021 and December 31, 2021, with a deadline to use the funds of December 31, 2022. Questioned Costs: $779,720 How the questioned costs were computed: None of the federal expenditures as reported on the Schedule of Expenditures of Federal Awards for the year ended September 30, 2023, were supported by adequate documentation regarding the allowability of the costs in preventing, preparing for, or responding to coronavirus. Condition Great Lakes Recovery Centers, Inc. was not able to provide sufficient documentation to support that the payroll and personnel costs reported to the Department of Health and Human Services on its Phase 4 portal report were allowable in accordance with the terms and conditions of the award, specifically, that the payments will only be used to prevent, prepare for, and respond to coronavirus. Great Lakes Recovery Centers, Inc. is taking the position that because they were considered an essential business by the State of Michigan, that any and all activities performed by its personnel were allowable and were to prevent, prepare for, and respond to coronavirus without further substantiation necessary. However, generally accepted auditing standards requires auditors to obtain sufficient appropriate audit evidence as to the allowability of costs in accordance with program requirements and Wipfli LLP was unable to do so based on: (1) there was no identification of which personnel were included in the reported expenses figures and (2) there was no mechanism for Great Lakes Recovery Centers, Inc. to gather information regarding what those personnel may have been doing that met the criteria to prevent, prepare for, or respond to coronavirus. Criteria Great Lakes Recovery Centers, Inc. accepted and utilized funding from the Department of Health and Human Services, through the Health Resources and Services Administration. According to www.hrsa.gov, If a recipient receives payment from funds appropriated for the Relief Fund, and retains that payment for at lest 90 days without contacting HHS regarding remittance of those funds, the Recipient is deemed to have accepted the Terms and Conditions. One of the terms and conditions is that payments will only be used to prevent, prepare for, and respond to coronavirus, and that the payment shall reimburse the grant recipient only for health care related expenses (or lost revenues) that are attributable to coronavirus. Great Lakes Recovery Centers, Inc. reported on its Period 4 portal report that 100% of the costs reported were related to payroll and other personnel costs and it did not elect the lost revenue option. Under program guidance for Period 4, allowable G&A expense examples included, but were not limited to personnel such as direct employee expenses for staff such as nurses, contractor payroll administrators, or support personnel and related fringe benefits. Cause Great Lakes Recovery Centers, Inc. was not sufficiently aware of the terms and conditions of the funding to be able to comply with the requirements as laid out in the Criteria section. As such, Great Lakes Recovery Centers, Inc. was not able to design and implement internal controls over compliance, or to comply with the terms and conditions of the award. Effect Because there was not sufficient, appropriate audit evidence to support the allowability of costs in accordance with the terms and conditions of the Provider Relief Funding, Great Lakes Recovery Centers, Inc. was not in compliance with those terms and conditions and all of the costs reported in 2023 are questioned. Recommendation Going forward, Great Lakes Recovery Centers, Inc. will not be reporting any federal expenditures under the Provider Relief Funds as it has not received any more payments. However, Wipfli recommends that Great Lakes Recovery Centers, Inc. ensure that any federal, state, or local funding that includes terms and conditions is evaluated carefully and that a system of internal controls over compliance with those terms and conditions is designed, implemented, and monitored appropriately. View of Responsible Officials Great Lakes Recovery Centers, Inc. agrees with the finding and is committed to a corrective action. As further clarification regarding finding 2023-004, Great Lakes Recovery Centers, Inc. applied for Health Resources and Services Administration (HRSA) relief funding and was awarded by HRSA funding based on the loss of revenue during various reporting periods. Great Lakes Recovery Centers, Inc. did not ask for a specific amount of funding as HRSA determined the amount eligible for the organization based on the changes in revenue of certain time periods. The category that GLRC indicated they would utilize the funds for surrounded employee/personnel expenses responding to the pandemic. Great Lakes Recovery Centers, Inc. had more than enough eligible personnel expenses that exceeded the amount of the HRSA award. Great Lakes Recovery Centers, Inc. throughout the pandemic time period fell under the Michigan Operational Mandate as an essential service and was required to continue operations, in which Great Lakes Recovery Centers, Inc. did. The supplemental accounting memo on how to record and reconcile HRSA funding from the Federal Government was not issued until well after the HRSA COVID funding was received. Great Lakes Recovery Centers, Inc. was not aware of the supplemental accounting memo stipulating the tieback to exact personnel for retrospective coding, therefore, there is only lump sum personnel expenditures for review. The retrospective application of HRSA relief funding accounting requirements is not unusual for many awardees from that time period, which makes it more difficult to reconcile the audit requirements to that time period.
Finding 2023-003
Finding 2023-003 Late Filing of Reporting Package and Data Collection Form U.S. Department of Housing and Urban Development - Community Facilities Loans and Grants Cluster - AL #10.766 Grant Number: N/A Grant Period: N/A U.S. Department of Health and Human Services - Provider Relief Funds - AL #93.498 Grant Number: N/A Grant Period: Period 4 - Deadline to Use Funds, December 31, 2022 Questioned Costs: None How the questioned costs were computed: N/A Condition As required by the Uniform Guidance, Great Lakes Recovery Centers, Inc.'s audited financial statements for the year ended September 30, 2023 were due to the federal single audit clearinghouse by June 30, 2024. Great Lakes Recovery Centers, Inc.'s September 30, 2023 audited financial statements were not completed for submission to the federal audit clearinghouse until after June 30, 2024. Criteria 2 CFR Part 200, Subpart F Section 200.512 Report Submission requires the audit, the data collection form, and the reporting package to be submitted within 30 calendar days after the auditee receives the auditor's report or nine months after the end of the audit period (whichever is earlier). Cause Great Lakes Recovery Centers, Inc. did not have sufficient audit preparation for the audit to be completed in time to submit the audit, reporting package, and data collection form on a timely basis. Effect A significant deficiency in internal control over compliance and an instance of noncompliance exists due to failure to adequately prepare for the audit in order to provide the audit, reporting package, and data collection form in a timely manner in order to meet audit submission deadlines. Recommendation We recommend that Great Lakes Recovery Centers, Inc. evaluate its existing resources and capacity and implement a plan to adequately prepare for the audit to ensure submission timelines are met. View of Responsible Officials Great Lakes Recovery Centers, Inc. agrees with the finding and is committed to a corrective action.