Condition: During our testing of internal controls, we found that there were no documented policies and procedures over procurement, suspension and debarment in place during the fiscal year. We reviewed the Organization’s procurement policy, however noted it was not effective until July 1, 2024. The Organization was operating without a formal procurement policy during fiscal year 2024. Additionally, a sample of one (1) contractor was selected for testing procurement, suspension, and debarment. Our test work indicated that there was no documentation for the verification of suspension and debarment for the contractor selected for testing.
Criteria: The Organization is responsible for establishing and maintaining effective procurement internal control policies and procedures which are paramount to protecting an organization’s assets. Suspension and debarment regulations under 2 CFR should be followed.
Cause: The Organization has had significant turnover in the Finance Department for the last three years, which resulted in failure to timely establish procurement internal control policies and procedures. Procedures have not been established to verify if vendors contracted with the Organization related to the federal program in excess of $25,000 are not suspended, debarred or otherwise excluded from doing business.
Effect: As a result of the internal control matters noted above, the Organization’s personnel did not have
clear instructions on how and when procurement procedures should occur. Noncompliance with the federal
award program’s suspension and debarment compliance requirements could occur and not be detected and corrected timely.
Recommendation: We noted the Organization has a procurement policy in place effective July 1, 2024 and recommend the Organization continue to use the policy for any future procurement transactions. We further recommend that the Organization establish and document suspension and debarment reviews for all contracts entered into using federal awards.
Views of Responsible Officials and Planned Corrective Actions: The Organization has recently hired an outside consultant and adopted a new Procurement policy as of July 2024. The Organization has adopted a Procurement policy, which includes procedures on how to document suspension and debarment reviews for all contracts entered into using federal awards.
Condition: Our test work over the reporting compliance requirement included a sample of monthly financial and performance reports. We noted that five of the eight reports were not submitted by the required dates.
Criteria: The Uniform Guidance requires organizations to establish internal controls to detect potential noncompliance.
Cause: Overall significant turnover and lack of policies and procedures regarding report submission.
Effect: Non-compliance with submission of required financial and program reports.
Recommendation: We recommend that management establish procedures for timely submission of required financial and performance reports.
Views of Responsible Officials and Planned Corrective Actions: The Organization has recently hired an outside consultant and is working on documenting their internal controls to ensure timely submission of required financial and program reports.
Condition: The annual financial statements for the year ended June 30, 2024, were not filed by the required due date of March 30, 2025 to the Federal Audit Clearinghouse.
Criteria: In accordance with Uniform Guidance requirements, the audited financial statements must be completed and submitted to the Federal Audit Clearinghouse by March 30, 2025.
Cause: Overall significant turnover in the Finance Department caused the audit to be delayed.
Effect: The annual financial statements for the year ended June 30, 2024 were not submitted to the Federal Audit Clearinghouse in a timely manner.
Recommendation: We recommend that management ensure the Finance Department is comprised of individuals with the appropriate skills, knowledge and experience required to perform the accounting and finance duties on a timely basis. We also recommend that the Organization’s established accounting procedures are consistently followed to ensure the Organization’s accounts are reconciled timely and accurately.
Views of Responsible Officials and Planned Corrective Actions: The Organization has recently hired an outside consultant and is working on getting the Finance Department back on track.
Condition: During our testing of internal controls, we found that there were no documented policies and procedures over procurement, suspension and debarment in place during the fiscal year. We reviewed the Organization’s procurement policy, however noted it was not effective until July 1, 2024. The Organization was operating without a formal procurement policy during fiscal year 2024. Additionally, a sample of one (1) contractor was selected for testing procurement, suspension, and debarment. Our test work indicated that there was no documentation for the verification of suspension and debarment for the contractor selected for testing.
Criteria: The Organization is responsible for establishing and maintaining effective procurement internal control policies and procedures which are paramount to protecting an organization’s assets. Suspension and debarment regulations under 2 CFR should be followed.
Cause: The Organization has had significant turnover in the Finance Department for the last three years, which resulted in failure to timely establish procurement internal control policies and procedures. Procedures have not been established to verify if vendors contracted with the Organization related to the federal program in excess of $25,000 are not suspended, debarred or otherwise excluded from doing business.
Effect: As a result of the internal control matters noted above, the Organization’s personnel did not have
clear instructions on how and when procurement procedures should occur. Noncompliance with the federal
award program’s suspension and debarment compliance requirements could occur and not be detected and corrected timely.
Recommendation: We noted the Organization has a procurement policy in place effective July 1, 2024 and recommend the Organization continue to use the policy for any future procurement transactions. We further recommend that the Organization establish and document suspension and debarment reviews for all contracts entered into using federal awards.
Views of Responsible Officials and Planned Corrective Actions: The Organization has recently hired an outside consultant and adopted a new Procurement policy as of July 2024. The Organization has adopted a Procurement policy, which includes procedures on how to document suspension and debarment reviews for all contracts entered into using federal awards.
Condition: Our test work over the reporting compliance requirement included a sample of monthly financial and performance reports. We noted that five of the eight reports were not submitted by the required dates.
Criteria: The Uniform Guidance requires organizations to establish internal controls to detect potential noncompliance.
Cause: Overall significant turnover and lack of policies and procedures regarding report submission.
Effect: Non-compliance with submission of required financial and program reports.
Recommendation: We recommend that management establish procedures for timely submission of required financial and performance reports.
Views of Responsible Officials and Planned Corrective Actions: The Organization has recently hired an outside consultant and is working on documenting their internal controls to ensure timely submission of required financial and program reports.
Condition: The annual financial statements for the year ended June 30, 2024, were not filed by the required due date of March 30, 2025 to the Federal Audit Clearinghouse.
Criteria: In accordance with Uniform Guidance requirements, the audited financial statements must be completed and submitted to the Federal Audit Clearinghouse by March 30, 2025.
Cause: Overall significant turnover in the Finance Department caused the audit to be delayed.
Effect: The annual financial statements for the year ended June 30, 2024 were not submitted to the Federal Audit Clearinghouse in a timely manner.
Recommendation: We recommend that management ensure the Finance Department is comprised of individuals with the appropriate skills, knowledge and experience required to perform the accounting and finance duties on a timely basis. We also recommend that the Organization’s established accounting procedures are consistently followed to ensure the Organization’s accounts are reconciled timely and accurately.
Views of Responsible Officials and Planned Corrective Actions: The Organization has recently hired an outside consultant and is working on getting the Finance Department back on track.