Audit 384813

Statement of condition: In prior years, the Organization experienced delays in completing timely financial statement audits and major Federal program compliance reporting in accordance with the Federal Single Audit Act. We note that the delays were due to misunderstandings of the grant compliance requirements, whereby only the subcontractor was audited. Subsequent audit and filing timing challenges were due to the extensive effort required to prepare and file multiple years of audits. As noted in the fiscal 2024 audit report, the Organization has completed and filed its audited financial statements for fiscal year 2019 through 2023 and has scheduled its fiscal 2025’s financial statement and major Federal program compliance audit to ensure it is timely filed. Timely external financial reporting is a critical internal control feature for the Board and management to provide for prudent oversight of program operations. Further, many of the organizations grants and contracts have accountability to provide its audited financial statement and federal major program compliance audit. Criteria: The State of Rhode Island, Department of Behavioral Healthcare, Developmental Disabilities, and Hospitals as well as the Federal 45 CFR 75 Subpart F, require financial and programmatic compliance reporting via an external audit within nine (9) months of the organization’s fiscal year-end. Cause of Condition: There was a lack of clarity among the subcontractors regarding the reporting responsibilities for grant activities for the funding agencies. Effect of Condition and Context: Non-compliance with the State of Rhode Island, Department of Behavioral Healthcare, Developmental Disabilities, and Hospitals and the Federal 45 CFR 75 Subpart F reporting requirements. Recommendation: We recommend the Organization provide for timely audited financial and program compliance reporting consistent with the State of Rhode Island, Department of Behavioral Healthcare, Developmental Disabilities, and Hospitals as well as the Federal 45 CFR 75 Subpart F.