Audit 398055

Reference Number: 2023-01 Finding: Finding Type: Material Weakness in Internal Control Over Financial Reporting Criteria: An auditee is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Condition: The Organization’s system of internal controls was not sufficiently designed or implemented to ensure that account reconciliations were prepared on an accrual basis and reviewed in a timely and accurate manner. As a result, material audit adjustments were proposed and made to correct misstatements in the financial statements prior to issuance. Cause: The deficiencies resulted from inadequate formalized close procedures, limited supervisory review during the year-end closing process, and staffing changes within the accounting function. Effect: Weaknesses in year-end close procedures increase the risk that material misstatements could occur and not be identified or corrected on a timely basis, resulting in delayed financial reporting and increased audit effort. Recommendation: We recommend management continue efforts to formalize and strengthen monthly and year-end close procedures through the implementation of documented timelines, clearly defined roles and responsibilities, and enhanced supervisory review to promote accurate and timely financial reporting. In addition, the Organization should continue to monitor areas where audit adjustments have occurred to ensure transactions are properly recorded on an accrual basis. Views of Responsible Officials: Management agrees with the finding and recommendation.

Reference Number: 2023-02 Finding: Finding Type: Significant Deficiency in Internal Control Over Compliance Title and ALN of Federal Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Criteria or Specific Requirement: A. Activities Allowed or Unallowed – 2 CFR section 200.303 of the Uniform Guidance requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During the audit, it was noted that the Organization was unable to provide formal support for the internal review of costs submitted to the pass-through grantor under the major program. Cause: The Organization lacks established procedures which provide formal evidence that the allowability, accuracy and completeness of transactions were verified before submission. Effect or Potential Effect: Without adequate internal controls in place to ensure that all charges to the federal program are properly reviewed for allowability, the Organization faces increased risk of noncompliance with the allowability requirement and could request funds for unallowed costs. Questioned costs: None Identification as a Repeat Finding: N/A – this was not reported as a finding in the prior audit report. Context: There is no formal approval for costs submitted to the pass-through grantor under the major program. Recommendation: We recommend that the Organization implement a formal process for approval of charges to federal programs before submission. Views of Responsible Officials: Management agrees with the finding and recommendation.

Reference Number: 2023-03 Finding: Finding Type: Noncompliance with Major Program Requirements Title and ALN of Federal Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Criteria or Specific Requirement: L. Reporting – Franklin County Department of Job and Family Services (the pass-through grantor) requires submission of monthly invoicing within 15 calendar days of each month-end. Additionally, a program report is required to be submitted monthly under the subaward agreement. Condition: One monthly invoice was identified as being submitted to the pass-through grantor after the deadline. No monthly program report was submitted for December 2023. Cause: Resource constraints and lack of timeliness in the Organization’s cost reconciliation process. The requirement to submit the monthly program report was informally waived by the pass-through grantor. Effect or Potential Effect: Failure to submit reports timely causes the Organization to be out of compliance with grant requirements. Questioned Costs: None. Identification as a Repeat Finding: N/A – this was not reported as a finding in the prior audit report. Context: Of two monthly invoices selected for testing, one was identified as being submitted to the pass-through grantor after the required 15-calendar day timeframe. No monthly program report was submitted for December 2023. Recommendation: All requested invoices and reports should be submitted in accordance with the grant requirements outlined in the underlying agreement. Though the pass-through grantor provided informal extensions and/or a waiver of requirements, we recommend the Organization obtain formal amendments for any exceptions from grant provisions to minimize the risk of uncertainty. Views of Responsible Officials: Management agrees with the finding and recommendation.

Reference Number: 2023-04 Finding: Finding Type: Significant Deficiency in Internal Control Over Compliance Title and ALN of Federal Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Criteria or Specific Requirement: L. Reporting – 2 CFR section 200.303 of the Uniform Guidance requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During the audit, it was noted that the Organization was unable to provide formal support for the internal review of required reports under the major program before they were submitted to the pass-through grantor. Cause: The Organization lacks established procedures which provide formal evidence that the accuracy and completeness of required reports was verified before submission. Effect or Potential Effect: Without formal review controls in place, the Organization is more susceptible to reporting errors and/or noncompliance with federal requirements. Questioned costs: None Identification as a Repeat Finding: N/A – this was not reported as a finding in the prior audit report. Context: Of two monthly invoices selected for testing, neither contained formal support that an internal review took place prior to submission to the pass-through grantor. Recommendation: We recommend that the Organization implement a formal process for verifying the accuracy and completeness of required reports before submission. Views of Responsible Officials: Management agrees with the finding and recommendation.

Reference Number: 2023-05 Finding: Finding Type: Significant Deficiency in Internal Control Over Compliance Title and ALN of Federal Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Criteria or Specific Requirement: I. Procurement – 2 CFR sections 200.318 – 200.326 of the Uniform Guidance require that non-federal entities follow documented procurement procedures that ensure full and open competition. All purchases using federal funds must comply with applicable thresholds, documentation, and approval requirements. Additionally, Franklin County Department of Job and Family Services (the pass-through grantor) requires that subrecipient entities also follow procurement requirements identified. Condition: The Organization did not follow required procurement procedures for subrecipient transactions. Cause: Though a procurement policy exists for the Organization, there was no enforcement of this policy for the federal program. Effect or Potential effect: Failure to follow a formal procurement policy causes the Organization to be out of compliance with Uniform Guidance and/or grant requirements and increases the likelihood of disallowance of costs. Questioned costs: None Identification as a Repeat Finding: N/A – this was not reported as a finding in the prior audit report. Context: The Organization did not follow required procurement procedures under the major program as no competitive bidding or documented justification for sole sourcing was provided. Recommendation: We recommend that the Organization revisit their existing procurement policy and implement a formal process to flag new purchase transactions and ensure the policy is followed. Periodic reviews of procurement activity tied to federal awards should also take place. Views of Responsible Officials: Management agrees with the finding and recommendation.

Reference Number: 2023-06 Finding: Finding Type: Noncompliance with Uniform Guidance Requirements Criteria or Specific Requirement: 2 CFR section 200.512(a) requires auditees to submit the Single Audit reporting package to the Federal Audit Clearinghouse (FAC) no later than the earlier of:  30 calendar days after receipt of the auditor’s report(s), or  nine months after the end of the audit period. Condition: The Organization did not submit the single audit reporting package to the FAC within the required timeframe. Cause: The late filing resulted from delays in completing the audit caused by the identification and remediation of internal control matters during the audit process, combined with staff turnover in key financial reporting positions. Effect or Potential effect: Failure to timely submit the reporting package causes the Organization to be out of compliance with Uniform Guidance requirements and may result in increased federal oversight, potential sanctions or withholding of federal funds. Questioned costs: None Identification as a Repeat Finding: N/A – this was not reported as a finding in the prior audit report. Context: The Organization experienced staff turnover in key finance positions and delays related to internal control matters identified during the audit, which extended the audit timeline. Recommendation: We recommend management implement procedures to ensure timely submission of the Single Audit reporting package, including maintaining a compliance calendar and assigning responsibility for monitoring federal reporting deadlines. Views of Responsible Officials: Management agrees with the finding and recommendation.