Finding Number 2024-001: Represents a material weakness in internal control over compliance with Wabanaki Public Health and Wellness, NPC’s major federal programs. Questioned Costs: None Major Programs: AL#93.243 - Substance Abuse and Mental Health Services – Direct Award (DHHS) – Award numbers: 1H79SM087536-01, 5H79SM087536-02, 1H79SM087590-01, 5H79SP081724-05, 5H79SM082160-04, 5H79SM082160-05, 5H79SP082229-03, 5H79SP082229-04, 1H79SM088765-01, 1H79SM088765-02, 1H79TI085542-01, 5H79TI085542-02, 5H79T086128-02 and Pass-through awards CD9-23-4425 and CD9-25-4425 AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement – Direct Award (DHHS) – Award numbers: 6 NU38TO000023-01-00, 6 NU38TO000023-02-00 and 6 NU38OT000257-05-03 AL#93.788 – Opioid STR – Direct Award (DHHS) – Award numbers: 5H79TI083088-02, 5H79TI083088-03, 6H79TI085684-01M003, 1H79T1087860-01 and Pass-through award CD9-24-5124 AL#93.859 – Biomedical Research and Research Training – Direct Award (DHHS) – Award numbers: 5S06GM142115-03 and 5S06GM142115-04 Description: Material Adjusting Journal Entries Condition: During the audit, Wipfli LLP proposed several adjusting journal entries to properly record cash, grants receivable, property and equipment, accounts payable, refundable advance liability, notes payable, grant revenue and expenses, other revenue, contributions with and without donor restrictions and the activity in Wabanaki Healing and Recovery, LLC, which we deem to be material in relation to the consolidated financial statements. We noted that not all accounts were consistently reconciled on a timely basis and adjusting journal entries are not consistently reviewed by someone other than the preparer. Since the internal controls of the Organization did not detect and record the adjustments described above prior to the audit, a material weakness exists in the Organization’s internal controls over financial reporting and the preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States. This is a repeat finding from the December 31, 2023 audit, finding number 2023-001, the December 31, 2022 audit, finding number 2022-001 and the December 31, 2021 audit, finding number 2021-001. Criteria: Internal controls are effective if they are properly designed and implemented to prevent or detect account misstatements prior to the audit. Cause: The internal controls of the Organization were not effective in preventing or detecting and correcting the misstatements described above prior to the audit. Effect: As a result of the financial reporting matter identified in the condition paragraph, a material weakness exists in the Organization’s internal controls over financial reporting. Recommendation: We recommend the Organization implement procedures, such as timely reconciling of accounts and review of all reconciliations and adjusting journal entries by someone other than the preparer, to provide sufficient internal control over financial reporting so all necessary transactions are recorded in accordance with generally accepted accounting principles. View of responsible officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number 2024-002: Represents a material weakness in internal control over compliance with Wabanaki Public Health and Wellness, NPC’s major federal programs. Questioned Costs: None Major Programs: AL#93.243 - Substance Abuse and Mental Health Services – Direct Award (DHHS) – Award numbers: 1H79SM087536-01, 5H79SM087536-02, 1H79SM087590-01, 5H79SP081724-05, 5H79SM082160-04, 5H79SM082160-05, 5H79SP082229-03, 5H79SP082229-04, 1H79SM088765-01, 1H79SM088765-02, 1H79TI085542-01, 5H79TI085542-02, 5H79T086128-02 and Pass-through awards CD9-23-4425 and CD9-25-4425 AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement – Direct Award (DHHS) – Award numbers: 6 NU38TO000023-01-00, 6 NU38TO000023-02-00 and 6 NU38OT000257-05-03 AL#93.788 – Opioid STR – Direct Award (DHHS) – Award numbers: 5H79TI083088-02, 5H79TI083088-03, 6H79TI085684-01M003, 1H79T1087860-01 and Pass-through award CD9-24-5124 AL#93.859 – Biomedical Research and Research Training – Direct Award (DHHS) – Award numbers: 5S06GM142115-03 and 5S06GM142115-04 Description: Year End Cutoff Condition: The Organization is responsible for the internal controls over the period-end financial reporting process, including controls over procedures to recognize transactions in the correct period and properly adjust the general ledger. During the audit, it was required to post several material adjusting journal entries to convert the Organization’s financial records to the consolidated financial statements as reported. Adjustments were required to correct accounts payable not reconciled at year end, to adjust grants receivable and refundable advances for current year activity, to adjust promises to give, to adjust contributions with and without donor restrictions and to adjust debt for payments made during the year. This is a repeat finding from the December 31, 2023 audit, finding number 2023-002, the December 31, 2022 audit, finding number 2022-002, and the December 31, 2021 audit, finding number 2021-002. Criteria: Internal controls should be properly designed and implemented for the Organization to ensure timely and accurate period-end financial reporting. Cause: Internal controls over year end reconciliations of the general ledger and financial reporting were not operating as designed. Effect: The Organization’s internal controls over financial reporting at the general ledger and financial statement levels were not adequate to ensure that a material misstatement of grant agreements would be prevented and/or detected. The Organization was not always in compliance with accounting principles generally accepted in the United States. Recommendation: We recommend the Organization continue to evaluate its year end closeout procedures and put processes in place to ensure that all balance sheet accounts are reconciled from support to the general ledger. The Organization should design and implement effective internal control procedures to ensure the financial statements and related notes are free from material misstatements. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number 2024-003: Represents a significant deficiency in internal control over compliance with Wabanaki Public Health and Wellness, NPC’s major federal programs. Questioned Costs: None Major Programs: AL#93.243 - Substance Abuse and Mental Health Services – Direct Award (DHHS) – Award numbers: 1H79SM087536-01, 5H79SM087536-02, 1H79SM087590-01, 5H79SP081724-05, 5H79SM082160-04, 5H79SM082160-05, 5H79SP082229-03, 5H79SP082229-04, 1H79SM088765-01, 1H79SM088765-02, 1H79TI085542-01, 5H79TI085542-02, 5H79T086128-02 and Pass-through awards CD9-23-4425 and CD9-25-4425 AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement – Direct Award (DHHS) – Award numbers: 6 NU38TO000023-01-00, 6 NU38TO000023-02-00 and 6 NU38OT000257-05-03 AL#93.788 – Opioid STR – Direct Award (DHHS) – Award numbers: 5H79TI083088-02, 5H79TI083088-03, 6H79TI085684-01M003, 1H79T1087860-01 and Pass-through award CD9-24-5124 AL#93.859 – Biomedical Research and Research Training – Direct Award (DHHS) – Award numbers: 5S06GM142115-03 and 5S06GM142115-04 Description: Segregation of Duties Condition: Access to the general ledger, subsidiary ledgers, and assets of the Organization - The accounting manager and certain other individuals have full access to all functions in the accounting software and have the ability to make changes in the general ledger and subsidiary ledgers including fixed assets, accounts payable, and payroll-related ledgers. These individuals also have access to general assets of the Organization, including bank accounts. The lack of segregation of duties and compensating oversight controls creates risk of significant errors or fraudulent transactions, leading to the potential of misstated consolidated financial statements. This is a repeat finding from the December 31, 2023 audit, finding number 2023-003, the December 31, 2022 audit, finding number 2022-003 and the December 31, 2021 audit, finding number 2021-003. Criteria: Internal controls that provide for proper segregation of duties should be in place. Cause: In an organization with a small number of personnel in its business office and accounting department, there may be an inadequate segregation of duties. This results in certain internal control limitations. Effect: Because of this lack of segregation of duties, the potential for misstatements or misappropriated assets exists. Recommendation: Management should review the user access list for the accounting software to ensure users only have access to what is needed based on their role in the Organization. Management should establish proper mitigating review procedures to be performed by someone who would not have access to the general ledger, subsidiary ledgers, and assets of Wabanaki Public Health and Wellness, NPC. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number: 2024-007 Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control and Nonmaterial Noncompliance Description: Schedule of Expenditures of Federal Awards Awareness and Preparation Major Programs: AL#93.243 - Substance Abuse and Mental Health Services – Direct Award (DHHS) – Award numbers: 1H79SM087536-01, 5H79SM087536-02, 1H79SM087590-01, 5H79SP081724-05, 5H79SM082160-04, 5H79SM082160-05, 5H79SP082229-03, 5H79SP082229-04, 1H79SM088765-01, 1H79SM088765-02, 1H79TI085542-01, 5H79TI085542-02, 5H79T086128-02 and Pass-through awards CD9-23-4425 and CD9-25-4425 AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement – Direct Award (DHHS) – Award numbers: 6 NU38TO000023-01-00, 6 NU38TO000023-02-00 and 6 NU38OT000257-05-03 AL#93.788 – Opioid STR – Direct Award (DHHS) – Award numbers: 5H79TI083088-02, 5H79TI083088-03, 6H79TI085684-01M003, 1H79T1087860-01 and Pass-through award CD9-24-5124 AL#93.859 – Biomedical Research and Research Training – Direct Award (DHHS) – Award numbers: 5S06GM142115-03 and 5S06GM142115-04 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Reporting Condition: The Organization did not have all federal expenditures recorded in their trial balance and did not have accurate records of all expenditures spent during the audit period. In addition, it did not have all of the necessary information or training to create the Schedule of Expenditures of Federal Awards. Criteria: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Expenditure of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period. Cause: The Organization does not have processes in place to properly track award numbers, award periods, assistance listing numbers and grant spending. Effect: The Organization was unable to provide the auditors with a complete Schedule of Expenditures of Federal Awards (including all grants with federal awards, all assistance listing numbers, total amount of federal awards expended) and could not verify the completeness of expenditures recorded in their financial statements provided for the audit. Recommendation: We recommend the Organization create processes and procedures that capture all federal funding received and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the Organization will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit. Views of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.