Audit 400338

Finding 2025-001: Allowable costs and activities – material weakness in internal controls over compliance and compliance finding. Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Criteria: The Organization’s internal control procedures over compliance specify that all payroll allocations are reviewed by the CFO prior to being submitted for reimbursement. Additionally, the Code of Federal Regulations stipulates that all costs charged to the grant are adequately documented. Condition: During payroll cost testing for federal grants, for 4 of the 40 payroll transactions tested, the pay rate charged to the grant did not agree to the approved pay rate. Cause: The Organization charges payroll to the grant using a standardized budgeted hourly rate rather than actual payroll and differences were not reconciled and corrected prior to the request for reimbursement submission. Effect: The Organization undercharged the grant by $87.44. Questioned Costs: None Recommendation: In order to comply with the Uniform Guidance federal regulations, we recommend a cost allocation methodology be updated so that amounts charged to the grant are aligned with grant expenditures. Management’s Response: See corrective action plan.

Finding 2025-002: Allowable costs and activities – material weakness in internal controls over compliance and compliance finding. Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Criteria: Payroll allocations should match timesheet records. The Organization’s internal control procedures over compliance specify that all employees timesheets and hours agree to the payroll register and amount allocated to the grant activities to be compliant with the Code of Federal Regulations. Condition: During payroll cost testing for federal grants, for 1 of the 40 payroll transactions tested, the allocation of the pay was incorrectly calculated. Cause: Allocation error was not caught during the review process. Effect: The Organization overcharge the grant by $14.85. Questioned Costs: None Recommendation: In order to comply with the Uniform Guidance federal regulations, we recommend a cost allocation methodology be updated so that amounts charged to the grant are aligned with grant expenditures. Management’s Response: See corrective action plan.

Finding 2025-003: Preparation of the schedule of federal expenditures (SEFA) – material weakness in internal controls over reporting. Criteria: A SEFA should be prepared with support for Assistance Listing Numbers, pass through organizations and grant funds reconciled to the financial statements. Condition: During testing of the SEFA, the Organization had posted grant revenues and expenditures to incorrect funds, matching funds were erroneously included, and entries relating to grant cut off were required in order to reconcile the SEFA to the financial statements. Cause: Federal revenue and expense accounts were not reviewed monthly, many reconciliations and adjustments were not done as part of year end close resulting in material audit entries and material changes to the SEFA. Effect: The Organization’s audit experienced significant delays for completion. Questioned Costs: None Recommendation: The Organization should implement controls to ensure grant expenditures are regularly reconciled to the financial statements. Management’s Response: See corrective action plan.