Audit 403706

2025-004: Cash management - excess cash - ALN 93.568 Condition: The Organization maintained excess cash balances throughout the fiscal year. Monthly balances ranged from approximately $39,000 to $296,000, with consistently elevated balances observed during multiple months. These balances indicate that federal funds were drawn down in advance of immediate cash needs. Criteria: In accordance with 2 CFR §200.305(b), non-federal entities must minimize the time elapsing between the transfer of funds from the federal awarding agency and the disbursement of those funds. Cash management practices should ensure that drawdowns are limited to amounts needed for immediate disbursement of program costs. Cause: The condition appears to be the result of inadequate alignment between cash drawdowns and actual disbursement needs, as well as a lack of ongoing monitoring of program cash balances to ensure compliance with federal cash management requirements. Questioned Costs: N/A Effect: Maintaining excess federal funds on hand increases the risk of noncompliance with federal regulations and may result in the Agency being subject to interest liability on advanced funds. Additionally, it reflects weakened internal controls over cash management and increases the risk of inefficient use of federal resources. Recommendation: We recommend that the Agency strengthen its cash management procedures to ensure compliance with federal requirements by aligning cash drawdowns more closely with immediate disbursement needs. This should include developing and utilizing short-term cash forecasts to support draw requests, performing regular monitoring and review of program cash balances, and maintaining documentation that clearly demonstrates the timing and necessity of each draw. Additionally, management should ensure that personnel responsible for cash management are adequately trained on federal cash management requirements to prevent excess cash from being held going forward. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.

2025-005: Noncompliance with Period of Performance Requirements - ALN 93.568 Condition: Management is responsible for ensuring that costs charged to federal awards are incurred within the applicable period of performance and properly recorded in the appropriate period. During our testing, we noted that, as part of the grant closeout process, management reclassified certain expenses from a Fee-for-Service program to the WXHHS grant to align costs with grant budget categories. The expenses reclassified related to prior year activity and were recorded during the year ended June 30, 2025, outside the applicable period of performance. Criteria: In accordance with 2 CFR §200.309, costs may be charged to a federal award only during the approved period of performance. Additionally, 2 CFR 200.403 requires that costs be allocable to the federal award and incurred during the period of performance to be allowable Cause: The condition appears to be attributable to the client’s closeout procedures, which permit post-period reclassification of costs to grants without sufficient controls to ensure that only costs incurred within the applicable period of performance are charged to the award. Questioned Costs: $2,536 Effect: As a result of this condition, costs were charged to the grant outside of the applicable period of performance, resulting in noncompliance with federal requirements. Recommendation: We recommend that management enhance controls over the grant closeout process to ensure that all costs charged to federal awards are incurred within the applicable period of performance. This should include a formal review of transaction dates and supporting documentation prior to recording any reclassifications to grant accounts, as well as procedures to prevent the inclusion of prior-period costs in current grant activity. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.

2025-003: Missing support/source documentation for grant eligibility - ALN 93.568 Condition: Management is responsible for supporting and maintaining support that individual program participants were determined to be eligible under requirements of the respective program. Criteria: During our audit testing, the Agency was not able to provide support for 1 of 40 client files reviewed. Cause: The Agency has not implemented procedures, to the degree necessary, to ensure that support/source documentation is maintained and readily available for client files. Questioned Costs: N/A Effect: Client files are not properly supported to prove eligibility for program funding. Recommendation: We recommend that the Agency update record retention controls to improve retention pr Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.