FINDING 2022-002 Condition: The Organization filed some of its SF-425 Federal Financial Reports with inaccurate expenditure amounts. The amounts did not agree with the Organization?s grant expense tracking system. The auditor discovered the inaccurate reports when testing the grant revenue for significant federal awards as part of the financial audit. The inaccurate reports were associated with at least two of eight federal awards spent during 2022 but were not associated with the major program that was tested. The inaccurate reports typically showed expenditures in an amount equal to the total award pro-rated equally on a quarterly basis over the award period, instead of actual expenditures. In some cases, this resulted in the SF-425 reporting more expenditures than actually incurred. Some of the dates were also inaccurate or did not get updated properly. Criteria: The Uniform Guidance (2 CFR section 200.328) addresses requirements regarding financial reporting. The Organization?s federal award contracts typically require the SF-425 report to be filed quarterly and that the report be true, complete, and accurate. Cause: The Organization inadvertently had some typographical errors in the report. There was also confusion regarding how to accurately complete the report. Effect: The Organization filed inaccurate SF-425 Federal Financial Reports for some of its federal awards. This did not directly affect the major program that was tested during the audit but is considered a significant deficiency in internal control over compliance, particularly compliance related to reporting, for federal awards. It is also considered to be noncompliance with federal award programs that were not tested as major programs. No adjustment to the financial statements was required. Recommendation: The Organization should reevaluate its procedures and controls regarding federal financial reporting, particularly the accuracy of the reporting, to ensure proper compliance. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and plans to carry out the noted recommendation.
FINDING 2022-002 Condition: The Organization filed some of its SF-425 Federal Financial Reports with inaccurate expenditure amounts. The amounts did not agree with the Organization?s grant expense tracking system. The auditor discovered the inaccurate reports when testing the grant revenue for significant federal awards as part of the financial audit. The inaccurate reports were associated with at least two of eight federal awards spent during 2022 but were not associated with the major program that was tested. The inaccurate reports typically showed expenditures in an amount equal to the total award pro-rated equally on a quarterly basis over the award period, instead of actual expenditures. In some cases, this resulted in the SF-425 reporting more expenditures than actually incurred. Some of the dates were also inaccurate or did not get updated properly. Criteria: The Uniform Guidance (2 CFR section 200.328) addresses requirements regarding financial reporting. The Organization?s federal award contracts typically require the SF-425 report to be filed quarterly and that the report be true, complete, and accurate. Cause: The Organization inadvertently had some typographical errors in the report. There was also confusion regarding how to accurately complete the report. Effect: The Organization filed inaccurate SF-425 Federal Financial Reports for some of its federal awards. This did not directly affect the major program that was tested during the audit but is considered a significant deficiency in internal control over compliance, particularly compliance related to reporting, for federal awards. It is also considered to be noncompliance with federal award programs that were not tested as major programs. No adjustment to the financial statements was required. Recommendation: The Organization should reevaluate its procedures and controls regarding federal financial reporting, particularly the accuracy of the reporting, to ensure proper compliance. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and plans to carry out the noted recommendation.
FINDING 2022-003 Condition: The Organization did not report sub-awards on the Federal Sub-award Reporting System (FSRS)Website www.FSRS.gov. The reporting was not done for any of the four sub-awards associated with the major program tested. Amounts passed through to these subrecipients include $428,651 of subrecipient expenditures during 2022. Total new sub-awards made during 2022 were $1,749,827 and total cash paid to sub-award recipients was $43,496 during 2022. Criteria: The Uniform Guidance, Federal Funding Accountability and Transparency Act, 2 CFR Part 170, and the Organization?s federal award contract for the major program require federal award recipients to report sub-awards on the Federal Sub-award Reporting System (FSRS)Website www.FSRS.gov. Prime financial assistance awardees receiving funds directly from HUD are required to report sub-awards and executive compensation information both for the award and sub-awards, where both the initial award is $30,000 or greater or the cumulative award will be $30,000 or greater if funding incrementally as directed by HUD in accordance with OMB guidance. The prime awardee will have until the end of the month plus one additional month after a sub-award is obligated to fulfill the reporting requirement. Cause: The Organization inadvertently missed the reporting requirement. Effect: The Organization did not comply with its reporting requirements. This is considered noncompliance with the federal award program that was tested as a major program. It is also considered a significant deficiency in internal control over compliance, particularly compliance related to reporting, for federal awards. No adjustment to the financial statements was required. Recommendation: The Organization should reevaluate its procedures and controls regarding federal sub-award reporting to ensure proper compliance and should also complete the necessary reporting. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and plans to carry out the noted recommendation.
FINDING 2022-001 Condition: The Organization had allocated expenditures, which supported an activity that generated program income, to a federal award that was not a major program. This program income was not deducted from total allowable costs or added to the award. The auditor discovered the expenditures during a scan of the expenditures allocated to federal awards and requested that the Organization analyze its charges to federal awards to determine if there were additional amounts. The total of such expenditures discovered was $3,655. Criteria: The Uniform Guidance (2 CFR section 200.307(e)(1)) requires that program income be deducted from total allowable costs in order to determine the net allowable costs, rather than to increase the funds committed to the project. This method must be used if the federal awarding agency has given no prior approval for how program income is to be used and its regulations and the terms and conditions of the federal award are silent on this matter. The Organization?s federal award contracts also address program income. Cause: The Organization had inadvertently misallocated the expenditures to the award. Effect: The Organization had other expenditures, which did not support an activity that generated program income, available to allocate to the award. Accordingly, no adjustment to the financial statements was required and there was no reportable noncompliance associated with program income. This did not directly affect the major program that was tested during the audit but is considered a significant deficiency in internal control over compliance, particularly compliance related to program income, for federal awards. Recommendation: The Organization should reevaluate its procedures and controls regarding the allocation of expenditures, which supported an activity that generated program income, to a federal award to ensure proper compliance. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and plans to carry out the noted recommendation.
FINDING 2022-002 Condition: The Organization filed some of its SF-425 Federal Financial Reports with inaccurate expenditure amounts. The amounts did not agree with the Organization?s grant expense tracking system. The auditor discovered the inaccurate reports when testing the grant revenue for significant federal awards as part of the financial audit. The inaccurate reports were associated with at least two of eight federal awards spent during 2022 but were not associated with the major program that was tested. The inaccurate reports typically showed expenditures in an amount equal to the total award pro-rated equally on a quarterly basis over the award period, instead of actual expenditures. In some cases, this resulted in the SF-425 reporting more expenditures than actually incurred. Some of the dates were also inaccurate or did not get updated properly. Criteria: The Uniform Guidance (2 CFR section 200.328) addresses requirements regarding financial reporting. The Organization?s federal award contracts typically require the SF-425 report to be filed quarterly and that the report be true, complete, and accurate. Cause: The Organization inadvertently had some typographical errors in the report. There was also confusion regarding how to accurately complete the report. Effect: The Organization filed inaccurate SF-425 Federal Financial Reports for some of its federal awards. This did not directly affect the major program that was tested during the audit but is considered a significant deficiency in internal control over compliance, particularly compliance related to reporting, for federal awards. It is also considered to be noncompliance with federal award programs that were not tested as major programs. No adjustment to the financial statements was required. Recommendation: The Organization should reevaluate its procedures and controls regarding federal financial reporting, particularly the accuracy of the reporting, to ensure proper compliance. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and plans to carry out the noted recommendation.
FINDING 2022-002 Condition: The Organization filed some of its SF-425 Federal Financial Reports with inaccurate expenditure amounts. The amounts did not agree with the Organization?s grant expense tracking system. The auditor discovered the inaccurate reports when testing the grant revenue for significant federal awards as part of the financial audit. The inaccurate reports were associated with at least two of eight federal awards spent during 2022 but were not associated with the major program that was tested. The inaccurate reports typically showed expenditures in an amount equal to the total award pro-rated equally on a quarterly basis over the award period, instead of actual expenditures. In some cases, this resulted in the SF-425 reporting more expenditures than actually incurred. Some of the dates were also inaccurate or did not get updated properly. Criteria: The Uniform Guidance (2 CFR section 200.328) addresses requirements regarding financial reporting. The Organization?s federal award contracts typically require the SF-425 report to be filed quarterly and that the report be true, complete, and accurate. Cause: The Organization inadvertently had some typographical errors in the report. There was also confusion regarding how to accurately complete the report. Effect: The Organization filed inaccurate SF-425 Federal Financial Reports for some of its federal awards. This did not directly affect the major program that was tested during the audit but is considered a significant deficiency in internal control over compliance, particularly compliance related to reporting, for federal awards. It is also considered to be noncompliance with federal award programs that were not tested as major programs. No adjustment to the financial statements was required. Recommendation: The Organization should reevaluate its procedures and controls regarding federal financial reporting, particularly the accuracy of the reporting, to ensure proper compliance. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and plans to carry out the noted recommendation.
FINDING 2022-003 Condition: The Organization did not report sub-awards on the Federal Sub-award Reporting System (FSRS)Website www.FSRS.gov. The reporting was not done for any of the four sub-awards associated with the major program tested. Amounts passed through to these subrecipients include $428,651 of subrecipient expenditures during 2022. Total new sub-awards made during 2022 were $1,749,827 and total cash paid to sub-award recipients was $43,496 during 2022. Criteria: The Uniform Guidance, Federal Funding Accountability and Transparency Act, 2 CFR Part 170, and the Organization?s federal award contract for the major program require federal award recipients to report sub-awards on the Federal Sub-award Reporting System (FSRS)Website www.FSRS.gov. Prime financial assistance awardees receiving funds directly from HUD are required to report sub-awards and executive compensation information both for the award and sub-awards, where both the initial award is $30,000 or greater or the cumulative award will be $30,000 or greater if funding incrementally as directed by HUD in accordance with OMB guidance. The prime awardee will have until the end of the month plus one additional month after a sub-award is obligated to fulfill the reporting requirement. Cause: The Organization inadvertently missed the reporting requirement. Effect: The Organization did not comply with its reporting requirements. This is considered noncompliance with the federal award program that was tested as a major program. It is also considered a significant deficiency in internal control over compliance, particularly compliance related to reporting, for federal awards. No adjustment to the financial statements was required. Recommendation: The Organization should reevaluate its procedures and controls regarding federal sub-award reporting to ensure proper compliance and should also complete the necessary reporting. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and plans to carry out the noted recommendation.
FINDING 2022-001 Condition: The Organization had allocated expenditures, which supported an activity that generated program income, to a federal award that was not a major program. This program income was not deducted from total allowable costs or added to the award. The auditor discovered the expenditures during a scan of the expenditures allocated to federal awards and requested that the Organization analyze its charges to federal awards to determine if there were additional amounts. The total of such expenditures discovered was $3,655. Criteria: The Uniform Guidance (2 CFR section 200.307(e)(1)) requires that program income be deducted from total allowable costs in order to determine the net allowable costs, rather than to increase the funds committed to the project. This method must be used if the federal awarding agency has given no prior approval for how program income is to be used and its regulations and the terms and conditions of the federal award are silent on this matter. The Organization?s federal award contracts also address program income. Cause: The Organization had inadvertently misallocated the expenditures to the award. Effect: The Organization had other expenditures, which did not support an activity that generated program income, available to allocate to the award. Accordingly, no adjustment to the financial statements was required and there was no reportable noncompliance associated with program income. This did not directly affect the major program that was tested during the audit but is considered a significant deficiency in internal control over compliance, particularly compliance related to program income, for federal awards. Recommendation: The Organization should reevaluate its procedures and controls regarding the allocation of expenditures, which supported an activity that generated program income, to a federal award to ensure proper compliance. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and plans to carry out the noted recommendation.