Audit 369401

2024-002 Vendor Records Federal Agency: Department of Health and Human Services Federal Program Name: Child Care and Development Fund Cluster Program Year: 2024 Assistance Listing Number: 93.575 Compliance: Activities Allowed and Unallowed and Allowable Costs/Cost Principles Finding Type: Significant deficiency in internal control over compliance Criteria: Management is responsible for maintaining adequate records for vendor transactions charged to federal awards that accurately reflect expenses. These records must include an invoice with a signature from a knowledgeable individual approving the expense. Condition and context: During compliance testing, it was noted that 34 out of 60 vendor transactions tested were missing approval by knowledgeable individuals. Cause of Condition: The Boys and Girls Clubs of Central and Northern New Hampshire, Inc.’s internal controls did not enforce documented vendor invoice approvals prior to payment. Effects of Condition: Without documented approval, there is an increased risk that unallowable or erroneous costs could be charged to the federal program, potentially resulting in noncompliance with Uniform Guidance requirements. Recommendation: It is recommended that The Boys and Girls Clubs of Central and Northern New Hampshire, Inc. require and document approval of all vendor invoices before payment, either with a signature, initials or digital system log. View of Responsible Officials and Planned Corrective Action: The Club has reviewed the findings and acknowledges the importance of documented controls over federal expenditures. The expenses noted were submitted for payment by the appropriate approver via Email, however, the emails were not maintained due to staff turnover. To address this finding, all grant expenditures are documented with approval and scanned prior payment. Planned Implementation Date of Corrective Action: Corrective action plan has been implemented. Person Responsible for Corrective Action: Amanda Stewart, CPA, Senior Staff Accountant

2024-001 Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Federal Agency: Various Federal Program Name: Multiple Programs Program Year: 2024 Assistance Listing Number: 21.027 & 93.575 Finding Type: Significant deficiency in internal control over compliance Criteria: Management is responsible for the preparation of the Schedule of Expenditures of Federal Awards. The SEFA must include the total Federal awards expended, the assistance listing number, and whether the award was direct or pass-through. Condition and context: During the audit it was noted that for the year ended December 31, 2024, the SEFA reported more in federal spending than it should have. There was an overstatement of approximately $16,000 related to 2023 and 2025 expenditures included in the first draft of the SEFA. Cause of Condition: The Boys and Girls Clubs of Central and Northern New Hampshire, Inc. does not have effective internal control over the preparation of the SEFA. Effects of Condition: Potential overstatement or understatement of expenditures could exist in the SEFA and might not be detected and corrected. Recommendation: It is recommended that The Boys and Girls Clubs of Central and Northern New Hampshire, Inc. implement formal procedures for SEFA preparation, including independent review by someone other than the preparer. View of Responsible Officials and Planned Corrective Action: The Club has reviewed the finding and acknowledges that $7,000 related to funds received in advance for 2025 expenditures and $9,00 related to 2023 expenditures due to a true up of allowable indirect charges for the grant fiscal year were inaccurately reported on the SEFA submitted for an audit. The Club acknowledges the importance of accurately preparing the SEFA in accordance with Uniform Guidance. To address this finding the following corrective actions are currently being implemented:  Tracking of Federal Awards: All grant expenditures will be tracked to grant codes in the accounting software. This procedure has already been implemented in 2025.  Year-End SEFA Review Process: A formal review checklist will be implemented and signed off by both the Grant Accountant and Senior Staff Accountant prior to audit submission. Planned Implementation Date of Corrective Action: Corrective action has started and will be completed by 12/31/2025. Person Responsible for Corrective Action: Amanda Stewart, CPA, Senior Staff Accountant