Audit 376151

Significant Deficiency in Internal Control over Compliance Internal controls should include documented review and approval of expenditures to ensure that expenses are accurate, properly authorized, and compliant with organizational policies and grant requirements. During our testing, we noted some expenditures (8 of 25 tested) were processed and recorded without documented evidence of review or approval by management. Cause: The Organization has not established or enforced procedures requiring consistent documentation of review and approval for expenditures. Effect: Without documented review, there is increased risk of errors, unauthorized spending, or noncompliance with grant terms going undetected. This weakens the Organization’s control environment and may compromise financial reporting reliability. Recommendation: We recommend the Organization consistently follow procedures requiring documented review and approval of all expenditures, whether through manual sign-off or system-based electronic approvals, to strengthen internal controls and accountability. Response: Management will document the review and approval of all expenditures. Conclusion: Responses accepted.

Significant Deficiency in Internal Control over Compliance Criteria and Condition: The processing and recording of cash receipts and disbursements should be segregated among different individuals to reduce the risk of errors or irregularities. During our testing, we noted that the fiscal agent is responsible for both processing and recording these transactions. Cause: The Organization has limited staffing which restricted its ability to segregate financial responsibilities. Effect: A lack of segregation of duties over cash receipts and disbursements increases the risk that errors or misappropriations may occur and not be detected in a timely manner. Recommendation: We recommend the Organization work with the fiscal agent to ensure that responsibilities for processing and recording cash receipts and disbursements are segregated among different individuals. If staffing limitations prevent this, compensating controls should be implemented. Response: Management will work with the fiscal agent to strengthen controls by ensuring more than one employee is involved in processing and recording cash transactions. In addition, management will provide board oversight through periodic review of financial activity. Conclusion: Response accepted.