Audit 390265

Criteria: An entity’s internal control should be designed to prevent or detect material misstatements. Performing timely and accurate reviews of the financial statements is a key element to maintaining an effective system of internal controls. Condition: During the course of our audit, various accounts were incorrectly reported on September 30, 2024. These items were not originally identified by Every Woman's Place, Inc.’s internal control in a timely fashion. Cause: Internal controls and the related reviews by management did not identify the reporting issue. . Effect: There were three proposed audit entries that were required to correct misstatements resulting in a change in net assets of approximately $169,000. Failure to review related balances increases the risk of error, omission, fraud and abuse in the financial statements and related activities. Recommendation: We recommend that the Organization enhance its internal controls over financial reporting with steps such as a review of statement of financial position accounts and revenue recognition relative to GAAP standards. Management Response: See corrective action plan

Criteria: An effective internal control system should be designed and clearly documented. A key part of the documentation is the use of documented policies and procedures. The policies and procedures should cover general accounting and operational processes as well as compliance with State and Federal regulations as applicable. Condition: The Organization did not have effective policies in place over payroll cost allocations, non-payroll cost allocations, procurement, gift cards, equipment inventory and other indirect program cost allocations. Cause: The Organization did not develop, design or implement adequate internal control policies over key required processes. Effect: The lack of internal controls could lead to misstatements of financial activity and related program reports. The lack of such policies and procedures increases the risk of error, omission, fraud and abuse in financial statements and related activities. Recommendation: The Organization should review accounting policies to ensure that the policies are up-to-date and, if applicable, in compliance with the State and Federal Regulations. View of Responsible Officials and Planned Corrective Actions:

Criteria: As noted in finding 2024-002, an effective internal control system should be designed and clearly documented. A key part of the documentation is the use of documented policies and procedures. The policies and procedures should cover general accounting and operational processes as well as compliance with State and Federal regulations as applicable. Federal regulations impacting the Organization include Title 2 CFR 200.318, Title 2 CFR 200.302(b), Title 2 CFR 200.313(d) and Title 2 CFR 200.403(d) (Factors Affecting Allowability of Costs). Condition: As noted in finding 2024-002, Every Woman's Place, Inc. did not have effective policies in place over payroll cost allocations, non-payroll cost allocations, procurement, gift cards, equipment inventory and other indirect program cost allocations. Cause: The Organization did not develop, design or implement adequate internal control policies over key required processes. Effect: As part of the audit, it was determined that indirect costs listed in the Financial Status Reports (FSR) for various programs passed through from the State of Michigan Department of Health and Human Services may have been erroneously calculated leading to questioned costs. The lack of internal controls could also lead to misstatements of financial activity and related program reports. The lack of such policies and procedures increases the risk of error, omission, fraud and abuse in financial statements and related activities. Context: A program audit was performed by the State of Michigan’s Department of Health and Human Services for the fiscal year ending September 30, 2023 (dated November 21, 2025). Based on additional items noted by the State of Michigan, it was determined that indirect costs appear to have been incorrectly calculated. These items were directly related to the lack of clarity and/or policy of the direct / indirect cost methodology being utilized Questioned Costs: Indirect costs presented on FSRs for the fiscal year ended September 30, 2024, that represent questioned costs is $83,141 Recommendation: The Organization should review accounting policies to ensure that the policies are up-to-date and, if applicable, in compliance with the State and Federal Regulations. The Organization should also adopt a proper allocation methodology for direct and indirect costs and require board-approval and annual certification. View of Responsible Officials and Planned Corrective Actions:

Criteria: 2 CFR 200 requires that internal controls over compliance exist to ensure that the Organization complies with the requirements for reporting of program results. The grant agreement with MDHHS requires quarterly performance reporting to be completed 15 days after each quarter. Condition: The Organization did not have an effective internal control system in place regarding internal controls over compliance for timely reporting. Six of six reports tested were not submitted timely for Crime Victim Assistance. Cause: The Organization did not implement an internal control process over timely reporting. Effect: The lack of internal controls could lead to a misstatement of financial and program reports and resulted in noncompliance. Recommendation: The Organization should implement an internal control system that includes the timely submission of reports. View of Responsible Officials and Planned Corrective Actions