Audit 403427

Finding 2025-001: Significant Deficiency in Internal Control Over Financial Statements – Inadequate Review of Expenditures Criteria: The Organization should have controls that provide documented evidence of review and approval of expenses at the invoice or transaction level prior to payment. Condition: During disbursement testing, approvals were often evidenced only by the President’s signature on checks. Practices for documenting preapproval of expenditures were not uniform. Cause: The Organization has not fully implemented a formal, documented expense approval process that requires and evidences review and authorization at the invoice or transaction level. Effect: Inconsistent documentation of approvals increases the risk that disbursements may be processed without appropriate review, may not comply with grant requirements or organizational policies, or may be recorded in the wrong period or account. This represents a significant deficiency in internal control over financial reporting, although no unallowable or improper costs were identified in our testing. Recommendation: Implement a formal expense approval policy requiring documented approval at the invoice or transaction level (for example, signatures/initials on invoices or documented electronic approvals in QuickBooks Online). Establish an approval matrix that defines approval thresholds and identifies other authorized approvers to reduce reliance on the President and promote consistency. Views of responsible officials: See attached corrective action plan.

Finding 2025-002: Significant Deficiency in Internal Control Over Financial Statements – Inadequate Review of Expenditures Federal Programs 15.904 and 14.251 U.S Department of the Interior and U.S. Department of Housing and Urban Development Criteria: Under 2 CFR 200.303 and 2 CFR 200.508, the Organization must maintain effective internal control over compliance with federal award requirements, including documented evidence that disbursements are properly authorized, supported, and made in accordance with applicable grant agreements and organizational policies. Condition: During disbursement testing for the above federal programs, approvals were often evidenced only by the President’s signature on checks. Approval was not consistently documented on underlying invoices or in the accounting system, and practices for documenting preapproval of grant-related expenditures were not uniform. Cause: The Organization has not fully implemented a formal, documented expense approval process that requires and evidences review and authorization at the invoice or transaction level. Effect: Inconsistent documentation of approvals increases the risk that federal program disbursements may be processed without appropriate review, may not comply with grant requirements or organizational policies, or may be recorded in the wrong period or account. This represents a significant deficiency in internal control over compliance, although no unallowable or improper costs were identified in our testing. Questioned Costs: None. Recommendation: Implement a formal expense approval policy for federal program expenditures that requires documented approval at the invoice or transaction level (for example, signatures/initials on invoices or documented electronic approvals in QuickBooks Online). Establish an approval matrix with defined thresholds and authorized approvers to reduce reliance on the President and promote consistent application across programs. Views of responsible officials: See attached corrective action plan.