Audit 399104

Finding 2025-003: Allowable Activities and Costs – Internal Control and Compliance Deficiencies (Noncompliance and Significant Deficiency) Criteria: Per 2 CFR 200.303 and 2 CFR 200.403, non-federal entities must establish and maintain effective internal controls over federal awards and ensure that costs charged to federal programs are allowable, properly documented, and in accordance with the terms and conditions of the grant. Condition: During our testing of grant expenditures, we identified the following deficiencies related to allowable activities and costs: - None of the invoices and request forms tested had sign-offs showing review and approval before the grant packet was submitted to the state for reimbursement. - - Indirect costs are required to be calculated at 10% of each invoice per the grant agreement. However, invoice packets 15 and 23 did not have indirect costs calculated at the required rate. For payroll costs, proper supporting documentation was not provided. Cause: The deficiencies noted were due to a lack of established procedures to ensure all grant-related expenditures are properly reviewed, authorized, and supported prior to submission for reimbursement. In some cases, staff turnover and oversight contributed to the errors. Effect: Failure to maintain adequate internal controls and documentation over grant expenditures increases the risk of unallowable costs being charged to the grant, noncompliance with grant terms, and potential disallowance of costs by the granting agency. Recommendation: We recommend the entity implement procedures to ensure that all grant request packets are reviewed and approved by appropriate personnel prior to submission, that indirect costs are accurately calculated in accordance with grant terms, and that all payroll costs are supported by appropriate documentation such as timesheets. Additionally, all amounts billed should be reconciled to supporting documentation before submission. Management’s Response: We will establish and maintain effective internal controls over federal awards and ensure that costs charged to federal programs are allowable, properly documented, and in accordance with the terms and conditions of the grant.

Finding 2025-004: Eligibility – Inadequate Review and Documentation of Tutor Timesheets (Noncompliance and Material Weakness) Criteria: Per the grant contract and 2 CFR 200.303, the entity must maintain effective internal controls to ensure that only eligible costs are charged to the grant. The contract specifically requires that tutor timesheets be reviewed and signed by the site coordinator and director, with an additional review by the grant coordinator, prior to submission for payment. Condition: During our testing of tutor payroll, we noted that none of the tutor timesheets tested had received the required signatures from the grant coordinator and/or grant director. Additionally, 104 timesheets were missing from the population tested. Cause: The lack of required signatures and missing timesheets resulted from insufficient procedures to ensure all timesheets are properly reviewed, authorized, and retained in accordance with grant requirements. Effect: Failure to obtain required approvals and maintain complete documentation increases the risk of ineligible or unsupported costs being charged to the grant, and may result in questioned costs or disallowance by the granting agency. Recommendation: We recommend the entity implement procedures to ensure all tutor timesheets are reviewed and signed by the site coordinator, grant coordinator, and director prior to submission to the finance department for payment. Additionally, all timesheets should be retained and available for audit. Management’s Response: We will maintain effective internal controls to ensure timesheets are reviewed and signed by site coordinators and director with an additional review by grant coordinator with initials documented on timesheets prior to submission.