Audit 370269

Finding #2023-003 Repeat Finding: No Condition: During the course of the audit, we determined that the Organization did not file data collection form for the year ended December 31, 2023 within the required timeframe. Criteria: The data collection form is required to be filed within nine months of the Organization’s year end. Cause: The 2023 audit and compliance examination was not completed in time due to delays in finalizing the audit.. Effect: The Organization did not comply with the filing requirements relating to the federal funding it received. Perspective Information: The audit commenced in July 2024; however, there were issues and delays resulting in the audit not being completed in time to meet the filing deadline of the data collection form. Recommendation: We recommend the Organization implement procedures to ensure the filing requirements in relation to federal funding are adhered to. Reporting Views of Responsible Officials: The Organization agrees with the finding. The Organization engaged a firm to perform the audit with the intent of completing and submitting the audit within the requirement timeframe. Due to unforeseen issues, the completion of the audit was delayed.

Finding #2023-004 Repeat Finding: No Condition: During the course of the audit, we noted employees use timesheets to track their time; however, approval of the timesheet by a supervisor could not be verified. Criteria: An effective control structure should be designed to ensure transactions are monitored and approved by designated personnel. Approval should be documented and verifiable. Cause: The Organization did not have the adequately designed procedures in place to document the independent review of the timesheet by a supervisor/manager. Effect: A significant deficiency in the Organization’s internal control exists. Context: In connection with the audit, we selected a sample of employees to verify the employee’s hours per the payroll register were supported by an approved timesheet. For the employees tested, we noted hours were supported by timesheets, including the hours charged to federal grants; however, we were unable to verify that the timesheets were approved by a member of management. Questioned Costs: None noted. However, the lack of documented internal controls could affect allowability of costs under federal awards in future periods. Recommendation: We recommend the Organization implement procedures to ensure timesheets are approved and establish a process for documenting the approval. Reporting Views of Responsible Officials: Management agrees with the finding. The Organization already has procedures in place requiring the employee’s direct supervisor to approve the timesheet weekly, but the approval is not documented. The Organization will modify and enhance its procedures so that approval can be verified and supported.

Finding #2023-005 Federal Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Repeat Finding: No Condition: During our audit of CSLFRF expenditures, we noted that the Organization charged $37,600 in office rent costs entirely to one CSLFRF grant (CSLFRF – Juntos). However, the rented office space was used to support activities under the CSLFRF – Juntos grant, a separate CSLFRF grant (CSLFRF – Centro Comunitario) and the general operations of the Organization. The Organization did not allocate rent costs between the two grants and general operations based on relative benefits received, resulting in an improper direct charge to a single award. Criteria: Per 2 CFR § 200.405, costs must be allocated to federal awards in accordance with the relative benefits received. Additionally, 2 CFR § 200.403 requires that costs charged to federal awards be necessary, reasonable, and allocable. Costs benefiting more than one award should be distributed among those awards to reflect the proportionate benefit each award received. Cause: The Organization did not properly implement procedures to allocate shared costs among multiple federal awards, resulting in the entire rent expense being charged to a single grant rather than distributed proportionally between both CSLFRF grants. Effect: The Organization has two grants under the CSLFRF program (Juntos Adelante and Centro Communitario Adelante on the Schedule of Expenditures of Federal Awards). The Organization charged $37,600 to the Juntos Adelante grant; however, determined that $4,324 should have been expensed under the Centro Communitario Adelante grant and $8,836 should not have been charged to either grant based on the proportionate benefit. Context: During testing of rent expenditures for the CSLFRF program, we noted the Organization’s lease agreement covered office space used by staff working on both Grant A and Grant B. The Organization confirmed no cost allocation methodology was used to split costs between the grants. Questioned Costs: See “Effect” Recommendation: We recommend that the Organization reallocate rent costs between the CSLFRF grants in accordance with the relative benefit each grant receives; develop and implement written procedures to allocate shared costs appropriately among federal awards; provide training to accounting staff on cost allocation requirements under Uniform Guidance. Reporting Views of Responsible Officials: Management concurs with the finding and will develop an allocation methodology for shared costs and reclassify expenses between CSLFRF grants. Management will work with the grantor to correct the costs charged to each grant.