Audit 401471

Finding Number:2024-004 Instance of Non-Compliance:Reporting Assistance Listing # 66.466 Questioned Cost $0 Repeat Finding: No Condition: The Organization recorded federal grant revenue for certain grants related to FY2023 activities in FY2024, based on the timing of reimbursement receipts rather than when the underlying expenditures were incurred. As a result, grant revenue was not recognized in the proper fiscal period. Criteria: According to U.S. GAAP, 2 CFR Part 200, and the accrual basis of accounting, nonfederal entities must maintain accounting records that accurately reflect the financial results of federal awards and recognize expenditures and related revenues in the period in which the allowable costs are incurred. For cost-reimbursement grants, revenue should be recognized as eligible expenditures are incurred, regardless of when reimbursement is received. Cause: The Organization’s current process for recording certain grant revenues appears to rely on cash receipt timing rather than a formal review of period-end revenue cutoff. Effect: As a result, federal grant revenue and related receivables for FY2023 were understated, while revenue in FY2024 was overstated for the related amounts. This condition resulted in a prior period adjustment to beginning net assets as disclosed in Note 8 to the financial statements. In addition, this may lead to misstatements in financial reporting if similar cutoff issues occur in future periods. Recommendation: We recommend that the Organization strengthen its period-end revenue cutoff procedures, including reviewing grant and contract agreements near year-end to determine whether revenue has been earned but not yet received and recording the appropriate accounts receivable and revenue entries in the correct reporting period. Views of Responsible Officials: Management acknowledges the finding and agrees that revenue cutoff procedures need to be strengthened. The issue resulted from reliance on reimbursement timing rather than recognizing revenue based on when eligible expenditures were incurred. To address this, the organization will implement enhanced period-end cutoff procedures, including reviewing grant activity and agreements at year-end to identify incurred but unreimbursed costs and recording the appropriate receivables and revenue. Grant tracking schedules and reconciliation processes will also be improved to ensure accurate and timely revenue recognition in accordance with accrual accounting and federal requirements. Responsible Official: Abel Olivo, Executive Director, in coordination with the organization’s outsourced accounting firm Anticipated Completion Date: December 31, 2025

Finding Number:2024-005 Instance of Non-Compliance:Reporting Assistance Listing # 66.466 Questioned Cost $0 Repeat Finding: No Significant Deficiency Federal Agency: Environmental Protection Agency Criteria: 2 CFR section 200.512 requires that a non-federal entity’s single audit and data collection form must be submitted within the earlier of thirty days after the receipt of the auditor’s report or nine months after the end of the audit period. Condition: The Organization’s audited financial statements for the December 31, 2024 year-end were not submitted to the Federal Audit Clearing House within the stipulated nine months after year-end. Context: This is a condition identified based on review of Uniform Guidance requirements. Cause: The condition appears to be due to delays in completing the year-end financial close process and the absence of adequate procedures to ensure that all necessary journal entries and reconciliations are completed prior to the commencement of the audit. Effect: The program is not in compliance with reporting compliance of the Office of Management and Budget for non-profit, state and local government entities. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization works to have reconciliations completed on a timely basis and have its audits completed timely in the upcoming year to comply with federal guidelines. Views of Responsible Officials and Planned Corrective Action Plan: Management acknowledges the finding and agrees that timely submission of the audit report to the Federal Audit Clearinghouse is critical for compliance. The delay was partly due to this being the organization’s first Single Audit and delays in completing the year-end close process. To address this, the organization will implement a structured year-end closing timeline, including a detailed checklist, assigned responsibilities, and internal deadlines to ensure all reconciliations and journal entries are completed prior to the audit. Management will also establish procedures to monitor key reporting deadlines and coordinate closely with auditors to ensure timely completion and submission in accordance with federal requirements. Responsible Official: Abel Olivo, Executive Director, in coordination with the organization’s outsourced accounting firm Anticipated Completion Date: December 31, 2025

Finding Number:2024-006 Instance of Non-Compliance:Allowability of Costs Assistance Listing # 66.466 Questioned Cost $0 Repeat Finding: No Condition: During testing of disbursements, including both federal grant expenditures and nonfederal funded transactions, it was noted that a majority of the sampled items lacked documented evidence of review and approval. While approvals may have occurred, there was no retained written or system-based documentation to substantiate that such reviews were performed in accordance with the organization’s established approval requirements. Criteria: In accordance with 2 CFR Part 200, specifically § 200.303 (Internal Controls), nonfederal entities are required to establish and maintain effective internal controls over federal awards, including proper authorization and documentation of transactions. Additionally, the Organization’s accounting policies require that all disbursements and employee reimbursements be reviewed and approved by appropriate personnel, with supporting documentation maintained within designated systems such as QuickBooks Online (QBO) and Gusto. Cause: The deficiency appears to result from inconsistent adherence to established policies and procedures, as well as insufficient monitoring and enforcement controls to ensure that approvals are properly documented and retained within the accounting system. Effect: The lack of documented approvals increases the risk of unauthorized, inappropriate, or unsupported expenditures. This control weakness may result in noncompliance with federal regulations and internal policies and could lead to questioned costs or additional audit findings. Recommendation: Management should strengthen internal controls by reinforcing compliance with existing approval and documentation requirements. Specifically, all disbursements and reimbursements should include verifiable evidence of review and approval (e.g., documented electronic approvals within QBO or Gusto, or appropriately signed supporting documentation) prior to payment processing. Additionally, management should implement periodic monitoring procedures to ensure compliance and provide training to relevant personnel on documentation and approval standards. Views of Responsible Officials: Management acknowledges the finding and agrees that documentation of disbursement approvals needs to be strengthened. While approvals were generally occurring, they were not consistently documented or retained in accordance with established policies. To address this, the organization has implemented a requirement for documented email approvals from appropriate managers prior to processing payments. In addition, the organization is evaluating and implementing an electronic system to capture and retain approvals for accounts payable and credit card transactions. Management will also reinforce compliance through periodic monitoring and staff training to ensure adherence to approval and documentation requirements. Responsible Official: Abel Olivo, Executive Director, in coordination with the organization’s outsourced accounting firm Anticipated Completion Date: May 31, 2026