General Ledger Maintenance Criteria: Several material audit adjustments were required to present the financial statements in accordance with accounting principles generally accepted in the United States of America. Condition: An effective system of internal control allows management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. Context: Account balances and transactions were not reviewed to ensure presentation in accordance with accounting principles generally accepted in the United States. Effect: Significant adjustments that were material in the aggregate in relation to the financial statements were not detected and recorded on a timely basis. Cause: Material adjustments were required to be made to the Organization's financial statement accounts. Recommendation: We recommend the Organization review its policies and procedures to ensure that all account balances and transactions are periodically reviewed for proper presentation in accordance with accounting principles generally accepted in the United States. View of Responsible Officials and Planned Corrective Actions: Following the 2024 grant year, the Organization instituted a system of annual review of the CFSI Accounting Manual including training sessions for key financial staff. Training sessions were conducted with key financial staff on November 15, 2024, and December 15, 2025. Review, training, and updates to the CFSI Accounting Manual were conducted as part of a Corrective Action Plan administered through AmeriCorps’ Office of Monitoring and confirmed as resolved in a notice dated November 25, 2025 [Re: Notification of Corrective Action Plan Closed – 23NDFMA002]. In addition to these regular reviews and training, College for Social Innovation has implemented a system of monthly, quarterly, and annual reviews of account balances and transactions. This new system includes monthly reviews with the Chief Operating Officer and Manager of Operations as well as the addition of a summer support intern for annual reviews at fiscal year-end. The first of these monthly reviews were conducted in July of 2025 and remain ongoing.
Reporting Criteria: Formally documented internal control procedures ensure schedules are ready for an audit on a timely basis. This ensures timely submission of the Single Audit report as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Condition: The Organization failed to submit the Single Audit report to the Federal Audit Clearinghouse by the required deadline. Questioned Costs: None noted. Context: The Organization was required to submit the June 30, 2024 Single Audit report to the Federal Audit Clearinghouse within nine months of the Organization's year-end. The Organization did not submit this report in the required period. Effect: The lack of formal process to provide timely and accurate audit support could result in the late submission of the Single Audit report. Cause: The Organization did not provide all audit documentation prior to the Single Audit submission deadline. Recommendation: The Organization should review its policies and procedures to ensure that all account balances and transactions are periodically reviewed for proper presentation in accordance with accounting principles generally accepted in the United States. This would allow for timely completion of the audit. View of Responsible Officials and Planned Corrective Actions: The Organization's corrective action plan to ensure timely preparedness for auditing is twofold. First, the Organization is developing a new “Financial Command Center” tool to allow greater speed, accuracy, and regularity in tracking account balances and transactions. This new tool better consolidates the Organization's tracking processes and allows for regular reconciliations across tracking platforms including Expensify, QuickBooks, Excel, and BambooHR. Second, the Organization is currently seeking the support services of a Certified Public Accountant. As of February 2, 2026, the Organization has identified a list of potential candidates, is developing a formal request for proposals, and expects to enter a contracted agreement in early March of 2026. This new supporting role will assist in ensuring that the Organization's accounting practices fully align with accounting principles generally accepted in the United States.
Allowable Costs/Cost Principles Criteria: Cost principles outlined in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require an after-the-fact determination of the actual activity of each employee to account for the total activity for which employees are compensated. Condition: The Organization incorrectly calculated the rate at which employees’ time was charged to the federal program. The Organization calculated the employees’ time charged to the federal program using incorrect hours worked rather than actual hours due to a formula error. This error resulted in the employees’ time being charged to the federal program at a higher rate for four out of the twelve months. Questioned Costs: None noted above the reportable threshold. Context: A sample of twenty-four payroll employee timecards were selected for testing. Nine of the items tested indicated a variance in the calculated amount charged to the federal program. Upon further review, the Organization noted four out of the twelve months indicated formula errors when calculating each employees’ time charged to the program. Effect: Amount charged to the federal program for direct labor was not based on actual hours worked. Cause: The Organization did not properly calculate the direct labor chargeable to the federal program. Recommendation: The Organization should develop formally documented internal control procedures to ensure that direct labor is charged to the federal program at the appropriate rate. View of Responsible Officials and Planned Corrective Actions: Following the 2024 grant year, the Organization made updates to the internal controls procedures to ensure greater oversight of financial calculation and appropriate segregation of duties. These updates include additional steps for review and approval of drawdown submissions, training for supervisory staff, and procedures for updating controls procedures as our staff grows and changes. These updates were completed as part of the Company's Corrective Action Plan administered through AmeriCorps’ Office of Monitoring and confirmed as resolved in a notice dated November 25, 2025 [Re: Notification of Corrective Action Plan Closed – 23NDFMA002]. In considering the recommendations provided in this report, the Organization will further amend our internal controls procedures to include an additional layer of review, reconciliation, and approval of staff time and salary calculations related to AmeriCorps grant activities. In addition to the existing process of compilation by the Chief Operating Officer and review and approval by the Chief Executive Officer, staff time and salary calculations will now also be conducted by the Director of People Operations independently. This secondary calculation will be used for review and reconciliation by the Chief Operating Officer and Director of People Operations to ensure alignment and compliance to AmeriCorps and general accounting standards.
Allowable Costs/Cost Principles Criteria: In accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Companies expending federal funds must maintain sufficient documentation to support that costs charged to federal awards are allowable, allocable, and reasonable. Internal controls should ensure that complete and accurate supporting documentation is retained for all cash disbursements submitted for reimbursement. Condition: The Organization's internal control procedures around maintenance of documentation is not sufficient to ensure that costs submitted for reimbursement were allowable costs. Questioned Costs: None noted above the reportable threshold. Context: A sample of forty cash disbursements were selected for testing. For one of the sampled monthly expenditures, the Organization was unable to provide the underlying calculation supporting the amount billed to the federal award. Effect: Without proper document retention, the Organization incorrectly calculated the amount to charge to the federal program. Cause: The Organization did not retain proper documentation of invoices or calculations for transactions charged to the federal awards, as outlined in the internal controls manual. Recommendation: The Organization should develop formally documented internal control procedures to ensure that records are maintained for an appropriate amount of time. View of Responsible Officials and Planned Corrective Actions: The Organization's inability to properly retain documentation relating to the noted selection was due in large part to rapid staff turnover at the senior level and an inability to access records from previous employees. Following the 2024 grant year, the Organization made updates to the accounting manual and segregation of duties protocols to ensure redundancy in the event of staff turnover. Additionally, the Organization has instituted new document storage and record keeping practices including the use of Google Drive and DropBox to securely store critical records and ensure access by relevant financial staff. At all times, at least two current staff members maintain access to record keeping digital drives and folders to ensure access redundancy. These policies and practices were first implemented in the beginning of the 2026 fiscal year and remain ongoing.