Audit 391026

Criteria: OMB Guidance (2CFR Part 200) requires that the accounting records follow generally accepted accounting principles which require accrual accounting. Condition: The organization did not initially prepare the SEFA using the full accrual method of accounting. Cause: The design of internal control did not properly allow for changes in grant amount received and awarded. Effect: The improperly designed internal control caused grant award changes to not be recognized in accordance with proper accounting principles and the overall revenue of the organization to be understated. Recommendation: It is our recommendation that the VP of Finance and the President of the organization review the internal control process to ensure that updated grant awards and all applicable invoices sent to the organization are documented and recorded in the general ledger on a monthly basis. Response: VP of Finance and President will review the internal control structure to allow needed adjustments

Criteria: OMB Guidance (2CFR Part 200) requires that federal awards be charged only for allowable, reasonable, and allocable costs in accordance with the terms and conditions of the federal award. Condition: The organization charged bonus payments and a portion of cell phone costs to Federal Grant ALN 84.181 that management determined were unallowable or not properly allocable to this program under OMB Guidance (2 CFR part 200). Cause: The payroll and reimbursement processes and related controls for employees receiving bonuses and cell phone reimbursements did not clearly direct or adequately review the allocation of these amounts by department or grant, resulting in miscoding to ALN 84.181. Effect: As a result, unallowable or improperly allocated costs were included in reimbursement requests under ALN 84.181, increasing the amount of federal reimbursement claimed. Questioned Costs: Known Questioned Costs from all sources: $13,600 Known Questioned Costs from federal sources: $3,400 Additional questioned costs may exist, but were not specifically identified. Recommendation: It is our recommendation that the VP of Finance and the President of the organization review the payroll processes to ensure that bonus pay and other payroll items are allocated appropriately across all departments. Response: VP of Finance and President will review the payroll processes and implement needed adjustments.