Audit 398676

Finding 2024-001: Administrative Capabilities Criteria and Condition: The Urban League should design its process and procedures to ensure timely and accurate accounting and reporting. During the year ended June 30, 2024, the Urban League lacked the administrative capabilities to properly and timely record all transactions, and lacked the internal oversight to ensure their reporting was timely and accurate. The main cause of this lack of administrative capabilities is due to turnover within the accounting department. This resulted in significant issues with their records and also with delays in being able to provide details for audit support and timely financial statements. Cause: During the year ended June 30, 2024 the Urban League went through substantial changes within their accounting department including but not limited to a complete change in oversight and leadership. During this time their was inadequate processes in place to properly record all transactions in a timely manner and an inability to provide accurate and timely reporting. Questioned Costs: None Recommendations: We recommend that management implement new procedures and improve upon accounting leadership and training to ensure that in the future accounting records are complete, accurate and timely.

Finding 2024-002: Internal Controls Criteria and Condition: The Urban League should follow more closely its written control procedures, and the controls mandated under the Uniform Guidance. During testing of internal controls, we noted the Urban League does not consistently complete or maintain documentation demonstrating that required controls related to reviewing check runs, proper check signatures, invoice approvals and proper channels for purchase orders. 2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal controls over federal awards, including documentation that key control activities-such as review and approval of disbursements-are performed. - 32 - Cause: During the year ended June 30, 2024, the Urban League went through substantial changes within their accounting department including but not limited to a complete change in oversight and leadership. During this time there was insufficient controls in place and a lack of follow through on the controls that existed. Questioned Costs: None – No instances of unallowable costs were identified; however the absence of documentation a strong control environment represents a control deficiency that could lead to noncompliance. Recommendations: We recommend that management implement new procedures and improve upon accounting leadership and training to ensure that in the future accounting records are complete, accurate and timely.

Finding 2024-003: Timely Single Audit Submission Criteria and Condition: Single Audits must be completed and submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the issued auditors’ report. or nine months after the end of the audit period. The Single Audit was not timely completed and submitted to the Federal Audit Clearinghouse within nine months form the end of the audit period. Cause: The Urban League was unable to provide complete and accurate financial statements within a timely fashion. This resulted in the financial statements and Single Audit to not be finalized and issued in order to be submitted to the Federal Audit Clearinghouse within nine months of the end of the audit period. Effect: The data collection form and reporting package for the Single Audit for the year ended June 30, 2024 were not submitted within the specified timeframe resulting in award drawdown restrictions. Questioned Costs: None Cause: Internal controls over reporting and compliance were not effective at ensuring that the required reports were being completed and submitted in a timely manner. Recommendations: We recommend that management improve their reporting processes and controls to ensure that the Single Audit is completed and submitted to the Federal Audit Clearinghouse in a timely manner.

Finding 2024-004: Eligibility of Participants in the Major Program Criteria and Condition: Per 20 CFR 641.505 participants are required to recertify on an annual basis that they meet the criteria required to maintain eligibility in the program. The Urban League did not obtain or did not maintain documentation related to the participant eligibility for 2 of the twenty-five participants that were selected for testing. Context: The Urban League did not obtain or did not maintain the recertification documentation. Effect: Without proper recertification being obtained annually the program may allow for ineligible participants to participate in the program. Questioned Costs: None Cause: Proper documentation required to verify the participants properly re-certified their eligibility to stay in the program. Recommendations: We recommended that internal control procedures regarding the annual redetermination of participants be documented and followed for each participant in accordance with 20 CFR 641.505.