Audit 365201

2022-001 {ALN 45.129 Promotion of the Humanities Federal/State Partnership} Condition: During our review of the Schedule of Expenditures of Federal Awards (SEFA) and related financial statements, we noted that a significant portion of total subawards issued during the fiscal year were funded by federal programs. However, the corresponding Federal Financial Report (FFR) did not reflect any unliquidated obligations, despite the presence of a substantial subawards payable balance in the audited financial statements. Criteria: In accordance with 2 CFR §200.343 and Uniform Guidance requirements, recipients of federal funds must accurately report unliquidated obligations on the FFR to ensure complete and transparent financial reporting. Cause: The discrepancy resulted from a change in the organization’s bookkeeping practices and reporting methodology. Specifically, the organization transitioned from a cash basis to an accrual basis for preparing the FFR, which was not fully aligned with the timing and recognition of subaward obligations. Effect: This discrepancy may result in inaccurate reporting to federal agencies, which could lead to misunderstandings about the organization’s financial position and compliance with federal requirements. Recommendation: We recommend that the organization establish and implement procedures to ensure that subawards payable are properly reviewed and reconciled with the FFR prior to submission in line with the accrual method for reporting the FFR. This should include identifying and reporting any unliquidated obligations related to federal subawards. Views of Responsible Officials: The organization concurs with the finding and has since resubmitted the Federal Financial Report (FFR) to the federal agency to accurately reflect unliquidated obligations. Procedures are being developed to ensure future FFRs are reconciled with subawards payable balances prior to submission.

2022-001 {ALN 45.129 Promotion of the Humanities Federal/State Partnership} Condition: During our review of the Schedule of Expenditures of Federal Awards (SEFA) and related financial statements, we noted that a significant portion of total subawards issued during the fiscal year were funded by federal programs. However, the corresponding Federal Financial Report (FFR) did not reflect any unliquidated obligations, despite the presence of a substantial subawards payable balance in the audited financial statements. Criteria: In accordance with 2 CFR §200.343 and Uniform Guidance requirements, recipients of federal funds must accurately report unliquidated obligations on the FFR to ensure complete and transparent financial reporting. Cause: The discrepancy resulted from a change in the organization’s bookkeeping practices and reporting methodology. Specifically, the organization transitioned from a cash basis to an accrual basis for preparing the FFR, which was not fully aligned with the timing and recognition of subaward obligations. Effect: This discrepancy may result in inaccurate reporting to federal agencies, which could lead to misunderstandings about the organization’s financial position and compliance with federal requirements. Recommendation: We recommend that the organization establish and implement procedures to ensure that subawards payable are properly reviewed and reconciled with the FFR prior to submission in line with the accrual method for reporting the FFR. This should include identifying and reporting any unliquidated obligations related to federal subawards. Views of Responsible Officials: The organization concurs with the finding and has since resubmitted the Federal Financial Report (FFR) to the federal agency to accurately reflect unliquidated obligations. Procedures are being developed to ensure future FFRs are reconciled with subawards payable balances prior to submission.

2022-001 {ALN 45.129 Promotion of the Humanities Federal/State Partnership} Condition: During our review of the Schedule of Expenditures of Federal Awards (SEFA) and related financial statements, we noted that a significant portion of total subawards issued during the fiscal year were funded by federal programs. However, the corresponding Federal Financial Report (FFR) did not reflect any unliquidated obligations, despite the presence of a substantial subawards payable balance in the audited financial statements. Criteria: In accordance with 2 CFR §200.343 and Uniform Guidance requirements, recipients of federal funds must accurately report unliquidated obligations on the FFR to ensure complete and transparent financial reporting. Cause: The discrepancy resulted from a change in the organization’s bookkeeping practices and reporting methodology. Specifically, the organization transitioned from a cash basis to an accrual basis for preparing the FFR, which was not fully aligned with the timing and recognition of subaward obligations. Effect: This discrepancy may result in inaccurate reporting to federal agencies, which could lead to misunderstandings about the organization’s financial position and compliance with federal requirements. Recommendation: We recommend that the organization establish and implement procedures to ensure that subawards payable are properly reviewed and reconciled with the FFR prior to submission in line with the accrual method for reporting the FFR. This should include identifying and reporting any unliquidated obligations related to federal subawards. Views of Responsible Officials: The organization concurs with the finding and has since resubmitted the Federal Financial Report (FFR) to the federal agency to accurately reflect unliquidated obligations. Procedures are being developed to ensure future FFRs are reconciled with subawards payable balances prior to submission.

2022-001 {ALN 45.129 Promotion of the Humanities Federal/State Partnership} Condition: During our review of the Schedule of Expenditures of Federal Awards (SEFA) and related financial statements, we noted that a significant portion of total subawards issued during the fiscal year were funded by federal programs. However, the corresponding Federal Financial Report (FFR) did not reflect any unliquidated obligations, despite the presence of a substantial subawards payable balance in the audited financial statements. Criteria: In accordance with 2 CFR §200.343 and Uniform Guidance requirements, recipients of federal funds must accurately report unliquidated obligations on the FFR to ensure complete and transparent financial reporting. Cause: The discrepancy resulted from a change in the organization’s bookkeeping practices and reporting methodology. Specifically, the organization transitioned from a cash basis to an accrual basis for preparing the FFR, which was not fully aligned with the timing and recognition of subaward obligations. Effect: This discrepancy may result in inaccurate reporting to federal agencies, which could lead to misunderstandings about the organization’s financial position and compliance with federal requirements. Recommendation: We recommend that the organization establish and implement procedures to ensure that subawards payable are properly reviewed and reconciled with the FFR prior to submission in line with the accrual method for reporting the FFR. This should include identifying and reporting any unliquidated obligations related to federal subawards. Views of Responsible Officials: The organization concurs with the finding and has since resubmitted the Federal Financial Report (FFR) to the federal agency to accurately reflect unliquidated obligations. Procedures are being developed to ensure future FFRs are reconciled with subawards payable balances prior to submission.