ACTIVITIES ALLOWED OR UNALLOWED, ALLOWABLE COSTS/COST PRINCIPLES - VARIOUS Partial repeat of finding 2022-005 Finding Type: Material Weakness in Internal Controls over Compliance, Material Noncompliance ALN/CSFA and Program Title: 93.676 - Unaccompanied Alien Children Program Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Liberty Wilderness Crossroads Camp Contract Number: 90ZU0362 (direct), 90ZU0501 Criteria: Under 2 CFR Part 200 of the Uniform Guidance, costs should be allocated in the accounting system among grants and should be properly supported. Per the Organization's policies and procedures, certain costs that benefit all programs should be allocated using allocation percentages that are calculated semi-annually. Under 2 CFR 200.438 of the Uniform Guidance, "Costs of entertainment, including amusement, diversion, and social activities and any associated costs (such as gifts), are unallowable unless they have a specific and direct programmatic purpose and are included in a federal award." Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The auditor tested 60 program expenses and noted the following: 1. For 5 expenses, the wrong allocation percentages were used to allocate costs for the period or the Organization was unable to provide support or replicate how costs were allocated. 2. For 6 credit card expenses, the Organization did not have adequate supporting documentation. 3. For 4 credit card expenses, the total of the charges identified by the Organization do not agree to the expense recorded. 4. For 2 expenses, the costs are considered to be unallowable entertainment costs. This was not a statistically valid sample. Cause: 1. Inadequate management review of allocations used for the costs and/or inadequate support for the allocation of the costs. 2. Management approval of credit card charges that are not supported by receipts or other documentation, or the Organization not maintaining the supporting documentation. 3. Difficulties with the credit card company where the Organization could not reconcile the costs in the statement to those that the employees were coding, and differences were typically coded to travel expenses. 4. Inadequate management review of costs that are allowable vs. unallowable for the program. Effect: Incorrectly allocated, unsupported, and unallowable costs were charged to the program, which could result in the grantor requiring repayment. Questioned Costs: Known questioned costs total $21,240, determined by calculating the difference between the costs allocated to the program and the costs that should have been allocated to the program using the allocation percentages in effect at the time the expenses occurred, and by totaling unsupported and unallowable costs. Likely questioned costs total $172,742, determined by dividing the known questioned costs by the total of the sample and applying the error rate to the population of expenditures. Recommendation: We recommend management more specifically review the allocations used when reviewing costs that are allocated among programs, that management ensure all credit card charges are adequately supported and not charge unsupported costs to federal awards, and that management gain a better understanding of allowable and unallowable costs for the program and ensure unallowable costs are not charged to the program. Views of Responsible Officials and Planned Corrective Actions: See management's response and Corrective Action Plan on page 57.
CASH MANAGEMENT - CASH DRAWS Repeat of finding 2022-003 Finding Type: Material Weakness in Internal Controls over Compliance, Material Noncompliance ALN/CSFA and Program Title: 93.676 – Unaccompanied Alien Children Program Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Liberty Wilderness Crossroads Camp Contract Number: 90ZU0362 (direct), 90ZU0501 Criteria: Under 2 CFR 200.305(b) of the Uniform Guidance, non-federal entities “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Under 2 CFR 200.305(b)(5) of the Uniform Guidance, “To the extent available, the non-federal entity must disburse funds available from program income (including repayments to a revolving fund), rebates, refunds, contract settlements, audit recoveries, and interest earned on such funds before requesting additional cash payments.” Under 2 CFR 200.302(b)(6) of the Uniform Guidance, the Organization’s financial management system must provide for “written procedures to implement the requirements of 2 CFR 200.305.” Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Organization drew cash down in excess of the total program disbursements during the year ended June 30, 2023, and requested additional cash draws prior to disbursing available funds for this program. Additionally, the Organization did not have written cash management policies and there was no process established for reviewing the pay requests prepared prior to submission. Cause: Policies and procedures were not in place to ensure that the time elapsing between the transfer of federal funds to the Organization and the disbursement of such funds for program purposes was minimized. In addition, policies and procedures were not in place to ensure that additional cash draws were not requested prior to disbursing all available funds for program related purposes. Effect: Program funds were drawn in excess of disbursements. The Organization could be required to return the excess funds to the grantor along with any associated earned interest, until such time as the money is legitimately needed to pay for grant activities. Questioned Costs: None Recommendation: We recommend that written policies and procedures be established to implement the requirements of 2 CFR 200.305, and recommend procedures be established for review of the cash draw requests prior to submission and that the review be documented. Views of Responsible Officials and Planned Corrective Actions: See management’s response and Corrective Action Plan on page 57.
REPORTING - VARIOUS Finding Type: Material Weakness in Internal Controls over Compliance, Material Noncompliance, Insufficient Evidence ALN/CSFA and Program Title: 93.676 – Unaccompanied Alien Children Program Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Liberty Wilderness Crossroads Camp Contract Number: 90ZU0362 (direct), 90ZU0501 Criteria: The program compliance supplement and grant agreements outline the reports required to be submitted and their due dates. Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Organization no longer had access to the federal Payment Management System and did not maintain copies of the Federal Financial Reports or Performance Progress Reports. Copies of the Federal Financial Reports were able to be obtained from the grantor for testing; however, copies of the Performance Progress Reports could not be obtained. The auditor could not obtain sufficient, appropriate audit evidence for the Performance Progress Reports and was unable to form a conclusion on the Organization’s compliance with direct and material requirements for a portion of the reporting requirement. The auditor tested 2 quarterly and 1 final Federal Financial Report and noted the following: 1. There was no process for reviewing the reports that were prepared prior to submission. 2. The final report was submitted later than the due date. 3. For all tested reports, the reported amounts did not agree with the Organization’s accounting records, the reported amounts did not agree within the reports, and/or the reported numbers were not cumulative as required by the reporting guidance. This was not a statistically valid sample. Cause: Procedures have not been established for reviewing the program reports, and management was unaware that the amounts reported should be cumulative. Additionally, the expenditures reported appear to be based on cash draws rather than actual program expenditures. Effect: Reports were not submitted timely and were inaccurate. Questioned Costs: None Recommendation: We recommend procedures be established for review of the program reports prior to submission to the grantors and that the review be documented, procedures be established to ensure reports are submitted timely, and a reconciliation of reported amounts to the accounting records be performed. Views of Responsible Officials and Planned Corrective Actions: See management’s response and Corrective Action Plan on page 57.
ACTIVITIES ALLOWED OR UNALLOWED, ALLOWABLE COSTS/COST PRINCIPLES - VARIOUS Finding Type: Significant Deficiency in Internal Controls over Compliance, Noncompliance ALN/CSFA and Program Title: 93.658 – Foster Care - Title IV-E Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Big Bend Community Based Care, Inc. dba NWF Health Network; Children’s Network of Hillsborough; Children’s Network of Southwest Florida Social Services; Communities Connected for Kids; Community Partnership for Children; Embrace Families, Inc.; Families First Network, Inc.; Family Support Services of Suncoast; Heartland for Children; Kids Central, Inc.; Partnership for Strong Families; Safe Children Coalition, Inc. Contract Number: 0299-22, C0900, PCM776, N/A (Emergency Shelter) Criteria: Under 2 CFR Part 200 of the Uniform Guidance, costs should be allocated in the accounting system among grants. Per the Organization’s policies and procedures, certain costs that benefit all programs should be allocated using allocation percentages that are calculated semi-annually. Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The auditor tested 40 program expenses and noted the following: 1. For 1 expense, the wrong allocation percentages were used to allocate the costs for the period. 2. For 1 credit card expense, the Organization did not have adequate supporting documentation. 3. For 2 expenses, the costs are considered to be unallowable entertainment costs. This was not a statistically valid sample. Cause: 1. Inadequate management review of allocations used for the costs. 2. Management approval of credit card charges that are not supported by receipts or other documentation, or the Organization not maintaining the supporting documentation. 3. Inadequate management review of costs that are allowable vs. unallowable for the program. Effect: Incorrectly allocated, unsupported, and unallowable costs were charged to the program, which could result in the grantor requiring repayment. Questioned Costs: Known questioned costs total $952, determined by calculating difference between the costs allocated to the program and the costs that should have been allocated to the program using the allocation percentages in effect at the time the expenses occurred, and by totaling unsupported and unallowable costs. Likely questioned costs total $53,895, determined by dividing the known questioned costs by the total of the sample and applying the error rate to the population of expenditures. Recommendation: We recommend management more specifically review the allocations used when reviewing costs that are allocated among programs, that management ensure all credit card charges are adequately supported and not charge unsupported costs to federal awards, and that management gain a better understanding of allowable and unallowable costs for the program and ensure unallowable costs are not charged to the program. Views of Responsible Officials and Planned Corrective Actions: See management’s response and Corrective Action Plan on page 57.
ALLOWABLE COSTS/COST PRINCIPLES - PAYROLL ALLOCATIONS Finding Type: Significant Deficiency in Internal Controls over Compliance, Noncompliance ALN/CSFA and Program Title: 93.658 – Foster Care - Title IV-E, 93.676, Unaccompanied Alien Children Program, 60.074 – Out-of-Home Supports Federal/State Agency: U.S. Department of Health and Human Services, Florida Department of Children and Families Pass-Through Entity: Big Bend Community Based Care, Inc. dba NWF Health Network; Brevard Family Partnership; Children’s Network of Hillsborough; Children’s Network of Southwest Florida Social Services; Communities Connected for Kids; Community Partnership for Children; Embrace Families, Inc.; Families First Network, Inc.; Family Support Services of North Florida, Inc.; Family Support Services of Suncoast; Heartland for Children; Kids Central, Inc.; Partnership for Strong Families; Safe Children Coalition, Inc., Liberty Wilderness Crossroads Camp Contract Number: 0299-22, C0900, PCM776, N/A (Emergency Shelter), 90ZU0362 (direct), 90ZU0501 Criteria: Under 2 CFR 200.430(g) of the Uniform Guidance, "Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed", and "Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to federal awards...". Per the Reference Guide for State Expenditures of the Florida Department of Financial Services, "Timesheets that support the hours worked on the project or activity must be kept." Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and Section 215.97(10), Florida Statutes, requires nonstate entities to have internal controls in place to provide reasonable assurance of compliance with the provisions of laws, regulations, and other rules, pertaining to state awards that have a material effect on each major state project. Condition: Time and pay for certain employees who perform work for multiple programs is allocated among these programs. The allocations are based on program budgets or other budgeted expectations of the employees’ activity. The Organization's internal control structure does not address adjusting these allocations to reflect actual time and effort expended. Cause: These employees do not record their time to each program, and management was unaware of federal and state requirements for the allocations. Effect: Time and pay being allocated charged to the programs may not accurately reflect their actual time spent on each program. Questioned Costs: None Recommendation: We recommend all employees record their time to each program that they work on, or that time studies be completed at least annually by the employees whose time needs to be allocated and those time studies be used to determine how the employes’ time and pay should be allocated. Views of Responsible Officials and Planned Corrective Actions: See management’s response and Corrective Action Plan on page 57.
ALLOWABLE COSTS/COST PRINCIPLES - INDIRECT COSTS Finding Type: Significant Deficiency in Internal Controls over Compliance, Noncompliance ALN/CSFA and Program Title: 93.658 – Foster Care - Title IV-E, 93.676, Unaccompanied Alien Children Program, 60.074 – Out-of-Home Supports Federal/State Agency: U.S. Department of Health and Human Services, Florida Department of Children and Families Pass-Through Entity: Big Bend Community Based Care, Inc. dba NWF Health Network; Brevard Family Partnership; Children’s Network of Hillsborough; Children’s Network of Southwest Florida Social Services; Communities Connected for Kids; Community Partnership for Children; Embrace Families, Inc.; Families First Network, Inc.; Family Support Services of North Florida, Inc.; Family Support Services of Suncoast; Heartland for Children; Kids Central, Inc.; Partnership for Strong Families; Safe Children Coalition, Inc., Liberty Wilderness Crossroads Camp Contract Number: 0299-22, C0900, PCM776, N/A (Emergency Shelter), 90ZU0362 (direct), 90ZU0501 Criteria: The Organization has elected to charge the de minimis rate of 10% of modified total direct costs (MTDC). 2 CFR 200.1 of the Uniform Guidance defines MTDC as “all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.” Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and Section 215.97(10), Florida Statutes, requires nonstate entities to have internal controls in place to provide reasonable assurance of compliance with the provisions of laws, regulations, and other rules, pertaining to state awards that have a material effect on each major state project. Condition: The Organization used total program expenses as the MTDC base for calculating the 10% de minimis indirect costs, and did not exclude certain items that are required to be excluded, such as rental costs, equipment, and charges for patient care. Additionally, the Organization's internal controls do not require review of the indirect costs charged to programs. Cause: Management was unaware of the requirements for calculating the MTDC and procedures have not been established for reviewing the indirect cost allocations. Effect: More indirect costs may have been charged to the programs than were allowable. Questioned Costs: None Recommendation: We recommend management calculate the MTDC in accordance with Uniform Guidance and apply the indirect cost rate consistently for all programs. We also recommend a procedure be established for review of the indirect cost allocations performed. Views of Responsible Officials and Planned Corrective Actions: See management’s response and Corrective Action Plan on page 57.
CASH MANAGEMENT - INTEREST ON EXCESS FUNDS Finding Type: Significant Deficiency in Internal Controls over Compliance, Noncompliance ALN/CSFA and Program Title: 93.676 – Unaccompanied Alien Children Program Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Liberty Wilderness Crossroads Camp Contract Number: 90ZU0362 (direct), 90ZU0501 Criteria: Under 2 CFR 200.305(b)(11) of the Uniform Guidance, the Organization “must maintain advance payments of federal funds in interest-bearing accounts” unless certain criteria apply. Under 2 CFR 200.305(b)(12) of the Uniform Guidance, interest earned on federal funds in excess of $500 per year must be returned annually. Condition: The Organization has cash draws in excess of the total program disbursements during the year ended June 30, 2023 and in previous years, and did not maintain the funds in an interest-bearing account. Cause: Management was unaware of the requirement to maintain funds in an interest-bearing account so the funds were maintained in the Organization’s checking account with other funds. Effect: Interest was not being earned on the excess program funds or remitted to the grantor. Questioned Costs: None Recommendation: We recommend the Organization establish policies to maintain federal grant funds in an interest-bearing account so that interest can be earned and remitted if required. Views of Responsible Officials and Planned Corrective Actions: See management’s response and Corrective Action Plan on page 57.
PROCUREMENT AND SUSPENSION AND DEBARMENT - SMALL, FORMAL, AND NONCOMPETITIVE PROCUREMENTS Finding Type: Significant Deficiency in Internal Controls over Compliance, Noncompliance ALN/CSFA and Program Title: 93.676 – Unaccompanied Alien Children Program Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Liberty Wilderness Crossroads Camp Contract Number: 90ZU0362 (direct), 90ZU0501 Criteria: 2 CFR 200 Subpart D of the Uniform Guidance outlines standards for procurement transactions made with federal funds. Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The auditor tested 4 small, formal, and noncompetitive procurements and noted the following: 1. For 3 procurements that were also covered transactions, all necessary documentation of the procurement process was not maintained, the procurement method used was incorrect or there was no documented justification for the procurement to be noncompetitive, and there was no evidence the Organization verified that vendor was not suspended or debarred. 2. For 2 procurements, the contracts did not contain all necessary federal provisions. This was not a statistically valid sample. Cause: The Organization’s policies and procedures for purchasing are not adequate. Effect: Procurements were potentially not made in compliance with Uniform Guidance. Questioned Costs: None Recommendation: We recommend the Organization update its policies and procedures for purchasing and suspension and debarment to align with Uniform Guidance or other requirements, whichever are more restrictive, and maintain all necessary documentation of the procurement process for purchases. Views of Responsible Officials and Planned Corrective Actions: See management’s response and Corrective Action Plan on page 57.
REPORTING - VARIOUS Finding Type: Significant Deficiency in Internal Controls over Compliance, Noncompliance ALN/CSFA and Program Title: 93.658 – Foster Care - Title IV-E, 60.074 – Out-of-Home Supports Federal/State Agency: U.S. Department of Health and Human Services, Florida Department of Children and Families Pass-Through Entity: Big Bend Community Based Care, Inc. dba NWF Health Network; Brevard Family Partnership; Children’s Network of Hillsborough; Children’s Network of Southwest Florida Social Services; Communities Connected for Kids; Community Partnership for Children; Embrace Families, Inc.; Families First Network, Inc.; Family Support Services of North Florida, Inc.; Family Support Services of Suncoast; Heartland for Children; Kids Central, Inc.; Partnership for Strong Families; Safe Children Coalition, Inc. Contract Number: 0299-22, C0900, PCM776, N/A (Emergency Shelter) Criteria: The grant agreements outline the reports required to be submitted and their due dates. Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and Section 215.97(10), Florida Statutes, requires nonstate entities to have internal controls in place to provide reasonable assurance of compliance with the provisions of laws, regulations, and other rules, pertaining to state awards that have a material effect on each major state project. Condition: Certain grants and program reports for these programs overlap. The auditor tested a total of 15 sets of program reports, or 26 individual reports, between these programs and noted the following: 3. For 13 individual reports, the reports were submitted later than the due date. 4. For 10 individual reports, there was either no process for reviewing the reports that were prepared prior to submission or there was a review process but no documented evidence that the review occurred. 5. For 9 individual reports, the Organization could not provide a copy of the reports and/or could not provide evidence that they had been submitted to the grantor. 6. For 3 individual reports, the reported amounts did not agree with the Organization’s accounting records. This was not a statistically valid sample. Cause: Management has not established procedures for reviewing certain program reports and/or the reviews failed to catch reporting errors and ensure reports were submitted timely. Effect: Certain reports were not submitted timely or may not have been submitted to the grantor, and certain reports were inaccurate. Questioned Costs: None Recommendation: We recommend procedures be established for review of all program reports prior to submission to the grantors and that the review be documented, procedures be established to ensure reports are submitted timely, and reconciliations of reported amounts to the accounting records be performed. Views of Responsible Officials and Planned Corrective Actions: See management’s response and Corrective Action Plan on page 57.