Audit 371016

Criteria: Federal regulations and internal control standards require that all expenditures charged to federal awards be properly approved and adequately supported by documentation. Each expenditure should include written authorization from the appropriate level of management prior to processing and payment, and documentation should clearly evidence the business purpose and allowability of costs under the grant. Condition: Some of the selected expense transactions revealed multiple deficiencies in the approval and documentation process, including Missing director’s approval on authorization forms, approval forms signed after the transaction or payment date, authorization forms lacking requestor’s signature, absence of supporting documentation for several expenditures, inaccurate purchase order amounts, with cumulative figures listed instead of itemized bill amounts., name mismatches and incomplete approval dates on authorization forms. Cause: Appropriate review and approval procedures were not consistently followed prior to processing expenditures. Management oversight was insufficient to ensure all approvals and documentation were obtained and retained in compliance with internal control and grant requirements. Effect: Failure to obtain and document timely approvals increases the risk of unallowable or unauthorized expenditures being charged to the federal program. Inadequate documentation may also hinder management’s ability to verify the validity and allowability of costs, resulting in potential questioned costs or noncompliance with grant requirements. Repeat Finding from Prior Year: Yes, 2023-004 Recommendation: Require timely written approval before processing payments, ensure complete supporting documentation, and conduct periodic compliance reviews. Context: A sample of 48 non-payroll expenditures totaling $126,724 was selected for audit from a population of 1,726 non- payroll expenditure totaling $480,904. Of the 48 expenditures selected, 10 expenditures totaling $40,077 had deficiencies described above. Our sample was a statistically valid sample. Questioned Costs: $152,090 Corrective Action Plan Explanation of Disagreement with Audit Findings: There is no disagreement with the audit finding. Actions Planned in Response to Finding: In response to the finding, management will reinforce its expenditure approval policy by requiring all purchases and payments to have complete documentation and pre-approval from the appropriate level of management. Will perform quarterly internal audits to ensure ongoing compliance. Official Responsible for Ensuring CAP: Paul Walker, Chief Executive Officer Planned Completion Date for CAP: Immediately Plan to Monitor Completion of CAP: The CEO will convene quarterly meetings with the Finance and Compliance departments to review sampled federal transactions for proper documentation and approval. A compliance checklist will be completed and retained for monitoring.

Criteria: Under 2 CFR 200.512(a), auditees that expend $750,000 or more in federal awards must submit their Single Audit report within nine months of the fiscal year end. Condition: The auditee’s fiscal year ended August 31, 2024. However, as of the date of this report (October 2025), the Single Audit report has not yet been issued—exceeding the nine-month submission requirement by over four months. Cause: The delay occurred because the external auditors were engaged only in January 2025. The late engagement significantly reduced the time available for audit fieldwork, report preparation, and final review, resulting in the delayed issuance of the Single Audit report. Effect: Late submission constitutes noncompliance with federal regulations and may delay future federal funding or result in additional oversight. Repeat Finding from Prior Year: This is not a repeat finding. Recommendation: Management should ensure timely engagement of external auditors and provide complete financial information promptly after year-end to allow the Single Audit report to be completed and submitted within the required nine-month timeframe. Questioned Costs: N/A Corrective Action Plan Explanation of Disagreement with Audit Findings: There is no disagreement with the audit finding. Actions Planned in Response to Finding: Management acknowledges that the late engagement of the external auditors contributed to the delayed completion and submission of the Single Audit. To prevent recurrence, management will establish a proactive annual audit planning schedule that ensures auditor engagement well in advance of the reporting deadline Official Responsible for Ensuring CAP: Paul Walker, Chief Executive Officer Planned Completion Date for CAP: Immediately Plan to Monitor Completion of CAP: Management will maintain an annual audit calendar with milestone dates for financial statement preparation, auditor fieldwork, and report submission. The CEO will review progress monthly to ensure timely completion.