Audit 372284

Finding 2023-001, Expense Allocations - Financial Management (Assistance Listings 93.567 and 93.576) Criteria: Per 2 CFR § 200.302(a) (Financial Management), all recipient and subrecipient financial management systems must be sufficient to track expenditures and establish that funds have been used in accordance with federal statutes, regulations, and the terms and conditions of the federal award. Condition and Context: The Organization’s documentation related to reconciliation of government grant revenue claimed and received to the actual revenue earned were not maintained. The lack of regular reconciliations increased the risk of misstatements in the financial records and delayed the financial reporting process. Cause: Internal controls over government grant revenue were not operating efficiently or designed properly. Effect: This resulted to significant amount of time required by both Management and the Auditors in order to analyze and adjust grant revenue, accounts receivables and deferred revenue balances accurately. Identification as a Repeat Finding: No. Questioned Costs: None. Recommendation: We recommend that the Organization strengthen its policies and procedures for reconciling the grant revenue earned to the related expenses. Financial reports and claims should be created from the reconciled general ledger. Additionally, management should establish clear documentation procedures to support the proper allocation of expenses in the general ledger and ensure compliance with federal regulations.

Finding 2023-002, Timesheet – Timekeeping (Assistance Listing 93.567 and 93.576) Criteria: 2 CFR § 200.430 requires that the distribution of salary and wages charged to federal awards be based on actual employee activity as reflected in personnel activity reports (timesheets), prepared after-the-fact, and includes the total activity for which employees were compensated. Condition and Context: The Organization’s current timesheet does not include the allocation of hours worked by program, neither the schedule provided that support employees’ payroll allocation agreed for 14 out of the 48 sampled selected. Cause: Internal controls over the accurate distribution of hours on the timesheets were not operating effectively or designed properly as well as the worksheets that support the payroll allocation. Effect: The timesheets or worksheets do not support the allocation of time charged to the programs. Identification as a repeat finding: No. Questioned costs: None. Recommendation: We recommend that the Organization strengthen its policies and procedures for the timekeeping and distribution of the employees’ hours in accordance with the requirements of the federal programs.

Finding 2023-003, Reporting (Assistance Listing 93.567 and 93.576) Criteria: 2 CFR § 200.348 requires that the recipient or subrecipient must submit financial and programmatic reports as required by the federal award. Condition and Context: The quarterly financial report for ALN 93.567 for 3ʳᵈ quarter ending June 30, 2023, due on July 31, 2023, was not submitted until August 4, 2023. For ALN 93.576 programmatic report for the period September 22 – March 23 due on April 12, 2023, was not submitted until April 19, 2023. Cause: Internal controls over the timely submission of financial and programming reports were not operating effectively or designed properly. Effect: The reports were not submitted on time as required by the federal grants. Identification as a repeat finding: No. Questioned costs: None. Recommendation: We recommend that the Organization establish policies to provide for the timely submission of financial and programming reports.

Finding 2023-004, Eligibility (Assistance Listing 93.567 and 93.576) Criteria: 2 CFR § 200.300 requires that the Federal Organization or pass-through entity must manage and administer the Federal award in a manner so as to ensure that Federal programs are implemented in full accordance with the U.S. Constitution, applicable Federal statutes and regulations. Condition and Context: The Organization’s maintains files for the documentation of program eligibility however those documents do not include evidence of review or approval by the Organization’s staff. In addition, 37 out of 60 samples didn’t include the signature of the interpreter which also served as case manager. There was no indication of who was handling the case unless the enrollment form was signed by the interpreter. Cause: Internal controls over the documentation of program eligibility were not operating effectively or designed properly. Effect: The review and approval performed on program eligibility was not documented. Identification as a repeat finding: No. Questioned costs: None. Recommendation: We recommend that the Organization institute a policy that provides for the documentation of the review of eligibility documents.

Finding 2023-005 Single Audit Report Submission Assistance Listing 93.567 and 93.576 Criteria: Pursuant to the Uniform Guidance, organizations expending federal financial assistance in excess of $750,000 in a fiscal year are required to submit the data collection form and reporting package by the earlier of either 30 days after receipt of the auditors’ report, or nine months after the end of fiscal year end date. Condition: The audit completion of the Organization’s basic financial statements delayed, and the Single Audit reporting deadline was not met. Context: The Single Audit report was not submitted timely. Cause: Internal controls over the timely submission of financial reports were not operating effectively or designed properly. Effect: The Organization failed to submit the Single Audit reporting requirements for the year ended December 31, 2023 on time. Recommendation: We recommend that the Organization takes the necessary steps in staffing its accounting department to meet reporting deadlines.