Criteria:The Services and TransitionalHousingforTraffickingVictimsprogramrequires thatcosts chargedto theFederalaward shallbeallowable and supportable in accordancewith 2CFR§ 200.403.Adequate sourcedocumentationmustberetainedtosupportreimbursedcosts. Condition:During testing ofreimbursedexpenses charged tothefederalaward,itwasnotedthataninvoice wasnotretained foroneprogram participant.Theprogramparticipanthadreceivedtheoriginalreceipts;however,copies ofallrequiredsupportingdocumentation couldnotbeobtained. Asa result,adequate source documentationwas notavailable to fully supportthereimbursedexpense. Cause:The conditionoccurreddue to inadequate proceduresforensuringthatinvoices andsupportingdocumentationwereretainedbytheorganizationpriortoreimbursement.Specifically,reliance onparticipants to maintain originalreceipts without obtainingand retainingcopies resulted inincomplete documentationbeingavailable forauditpurposes. QuestionedCost:$-0- Effect:The lackof retained invoices limits theability to verify thatreimbursed expenseswereallowable, properly supported,and in compliancewith federalrequirements.This conditionincreases theriskofquestioned costs,noncompliance with federalrecord retentionrequirements,andpotentialrepaymentofunsupportedexpenditures. Recommendation:Managementshould implementandenforceprocedures to ensurethatallinvoices and supportingdocumentationareobtained and retained priortoassistance beingprovided toparticipants.Additionally,managementshouldprovideguidancetoparticipantsregardingdocumentation requirementsand periodically reviewreimbursementfiles to confirmcompliance with federalrecord retentionrequirements. Classification: Compliance finding and control deficiency in internal controls
Criteria: The Services and Transitional Housing for Trafficking Victims program requires that costs charged to the Federal award shall be allowable and supportable in accordance with 2 CFR § 200.403. Adequate source documentation must be retained to support reimbursed costs. Condition: During the audit, it was noted that while the original lease agreements were obtained and retained, lease extension agreement was neither obtained nor retained to support the expenses for 3 of the 31 Rent Assistance items selected for testing. Cause: The condition occurred because management did not obtain or retain an extension to the original lease agreement to cover the month in which assistance was provided. This gap indicates a lapse in the organization’s document retention requirements, which resulted in the lease not aligning with the period of expenditure. Questioned Cost: $-0- Effect: As a result of the lease not covering the month for which assistance was provided, there is a risk that the related expenditure may be considered unsupported. This could lead to questioned costs, audit findings, or other financial reporting and compliance issues. Recommendation:Managementshould tracklease expirations andensureextensions orrenewals are obtained andretained,implementa checklistto verifyalllease documentation iscurrent,providestafftrainingontheimportanceof maintainingvalid agreements,andconductperiodic reviews to confirmdocumentation aligns with rentalassistance periods. Classification:Compliancefindingandcontroldeficiency in internalcontrols
Criteria:The Services and TransitionalHousingforTraffickingVictimsprogramrequires thatcosts chargedto theFederalaward shallbeallowable and supportable in accordancewith 2CFR§ 200.403.Adequate sourcedocumentationmustberetainedtosupportreimbursedcosts. Condition: During the audit, it was noted that 4.5 hours of overtime for an employee were not processed in payroll. The discrepancy appears to have resulted from either a data entry error in the payroll system or the system failing to save the entered hours. As a result, the employee was not paid for the overtime worked. As reimbursed payroll amounts were lower than the actual costs incurred, no questioned costs were identified. Cause: The procedures for payroll review and processing were not followed to ensure payroll is properly accounted for and processed. The lack of proper review represents a failure to fully comply with payroll processing requirements and procedures leading to inaccurate employee compensation and program reporting. Questioned Cost: $-0- Effect: The lack of formal review, approval, and reconciliation of the payroll process led to an employee not being originally paid for the overtime worked and an inaccurate payroll amount being reimbursed. However, the overall payroll expenditures were lower than the amount reimbursed by the program as a result of the error and did not lead to excess funds provided. Recommendation:We recommend managementcontinuetoemphasizethepayrollcontrols byensuring allhours,includingovertime,are accurately entered,reviewed,and verifiedin thepayrollsystem.Managementshould implementa formalreviewprocess to reconcile payrollentries againsttimesheets priortoprocessingandensure thatthesystem properly savesallentries.Ongoingtrainingforaccounting personneland periodic audits ofpayrolldatacanfurtherreducetherisk oferrors and ensurecompliance with payrollprocessingrequirements. Classification:Compliancefindingandcontroldeficiency in internalcontrols
Criteria: The Services and Transitional Housing for Trafficking Victims program requires that financial management procedures are followed for all federal awards in accordance with 2 CFR §200.302. Maintaining records that sufficiently identify the amount, source, and expenditure offederal funds for Federal awards. These records must contain information necessary to identifyfederal awards, authorizations, financial obligations, unobligated balances, as well as assets,expenditures, income, and interest. All records must be supported by source documentation. Condition: During the audit, it was noted that cash drawdowns, reimbursements, invoicing, and matching requirement reporting were performed without reconciliations to the general ledger consistently and lacked formal review and approval. Errors were identified in total expenses per the general ledger that did not agree to submitted reimbursement requests, and expenditure reporting could not be reconciled to the general ledger due to differences in reporting periods and incomplete supporting documentation. These observations demonstrate a lack of adequate internal controls over the recording, review, and approval of federal award transactions. Cause: The condition resulted from the accounting practices of the previously retained outsourced accounting firm in which internal controls over drawdowns, reimbursements, invoicing, SEFA reporting, and matching contributions were not formally established or enforced. Specifically, review, approval, and reconciliation procedures were not consistently followed, leading to errors and incomplete details. Additionally, management did not properly oversee the services to ensure these processes were properly being followed. Questioned Cost: $-0- Effect:Thelack offormalreview,approval,andreconciliation controls increasestheriskofinaccurate reportingoffederalexpenditures and matchingcontributions.The conditionrepresents a reportable deficiency thatcould resultin errors,misstatements,or noncompliancewith federalrequirements. Recommendation:Werecommendmanagementmaintain and enforceformalreviews, approvals,andreconciliation proceduresforalldrawdowns,reimbursements,invoicing,federalfinancialreporting,andmatchingcontributions.Managementshould ensure thatalltransactionsare consistently reconciledto thegeneralledger,adequately documented,and approvedpriortosubmission.Continuedmonitoring,periodic internalaudits,and stafftrainingshould beimplementedtopreventrecurrenceofdeficiencies. Classification:Compliancefindingandsignificantdeficiency in internalcontrols