Audit 407341

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number: SLFRP1610 Award Period: July 1, 2022 through December 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Organization should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, it was noted that the Organization did not implement policies and procedures over procurement, suspension, and debarment under Uniform Grant Guidance in the year under audit. Questioned Costs: None Context: In sample of 7 for suspension and debarment, internal controls over reviewing vendors for suspension and debarment in accordance with the Organization's written policy were not performed. In a sample of 3 for procurement, due diligence was noted, however, the Organization's written policy is not in compliance with the requirements as the policy did not include micro purchase thresholds or competitive bid processes. Cause: The Organization was new to federal funding and procurement, suspension, and debarment procedures were not yet in place. Effect: Audit procedures performed over suspension and debarment verified that the Organization did not engage with entities that were suspended or debarred and verified due diligence was performed for procurement, however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat finding: The finding is a repeat of a finding in the immediate prior year. Prior year finding number was 2022-001. Recommendation: We recommend that management implement policies and procedures over procurement and suspension and debarment under Uniform Grant Guidance. Views of responsible officials: We agreed with the above comment. The Organization will put in place a policy and procedure over procurement and suspension and debarment under Uniform Grant Guidance and will consult with external auditors.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number: SLFRP1610 Award Period: July 1, 2022 through December 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization is required to submit quarterly Project and Expenditure Reports to the Federal Agency. Condition: The Organization did not have controls in place to prevent, detect, or correct errors in reporting. Questioned Costs: None Context: During our testing, it was noted that there was no formal review of the quarterly report prepared before it was submitted to the grantor. Cause: The Organization was in the startup phase and maintaining current operations with limited staff. Effect: The auditor noted no instances of noncompliance with the provisions of reporting; however, the lack of internal controls over this compliance requirement provides an opportunity for noncompliance. Repeat finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-002. Recommendation: We recommend that reports are prepared and reviewed by separate individuals. Views of responsible officials: We agreed with the above comment. The Organization will put a formal layer of review after preparation of the report and before submission to the grantor.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number: SLFRP1610 Award Period: July 1, 2022 through December 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of allowable costs. The Organization should have internal controls designed to ensure compliance with those provisions. Condition: Internal controls and procedures were not consistently followed in relation to allowable costs as the amount included in the reporting for grant expenditures differed from the amount recorded in the general ledger as being paid. Questioned costs: $1,007 Context: In a sample of 50: 1. 1 of the provider payments allocated to the grant was based on an estimated dollar amount that exceeded the amount actually paid to the provider. The decrease in the amount paid occurred as the provider started with them mid-month and the number of students in the classroom was lower than estimated. 2. A December 2023 invoice allocated to the grant was not recorded as accounts payable and an expense in the general ledger. An audit entry of $7,500 was made as a result. Cause: The Organization was in its startup phases and was maintaining current operations with limited staff. The amount paid was not compared to the amount calculated for payment to determine if they matched or if an adjustment was needed to the expenditure report before submission to the grantor. Effect or potential effect: The amounts reimbursed by the Federal Agency may be unallowable and result in a refund to the Federal Agency. Repeat Finding: No Recommendation: We recommend the Organization design controls to ensure the expenses allocated to the grant are based on expenses coded in the general ledger. We also recommend that the expenditure reports are prepared and reviewed by separate individuals. Views of responsible officials: We agreed with the above comment. The Organization will put a formal layer of review after preparation of the expenditure report and before submission to the awarding agency and make sure the approved support is kept on file supporting expenses are based on actual payments made.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number: SLFRP1610 Award Period: July 1, 2022 through December 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance with respect to record retention Specific requirement-criteria: The Organization is required to provide support that internal controls over compliance are in place. Condition: Internal controls over compliance of allowable costs were not in place to support that the organization had implemented controls to prevent, detect, or correct errors in calculating provider payments or payroll that were allocated to the federal program. Questioned costs: None Context: Provider Payments Providers payments calculations are not reviewed for errors by a separate individual. In a sample of 32, the amount used in the calculation for 20 providers was based on an agreement that was not signed by both the provider and the Organization’s CEO or it was based on an agreement signed by both parties during 2024 or 2025. A copy of the signed provider agreement was not consistently retained by the Organization to support the amount both parties agreed to. In a sample of 32, 12 attendance sheets did not support the attendance number used in the provider payment calculation. The attendance number used was based on an estimate of students as the provider did not turn in the attendance sheet timely, but the Organization wanted to ensure the provider was paid timely. Had actual attendance numbers been used rather than estimated, the amount due to the provider would have decreased by $9,225. In a sample of 32, the amount used in the calculation for 4 providers was based on an executed agreement that indicated the maximum amount to be used in the calculation for payment was lower. Rates used in the calculation change periodically based on various factors, however, the agreement was not reviewed to ensure the updated amount didn’t exceed the maximum indicated. Payroll In a sample of 10, there was no record of timesheet approval by a supervisor or of the overall approval of the associated payroll register. Other General Disbursements In a sample of 50, there was no check signature indicating approval of disbursement on 1 payment. The check was issued without being signed by a member of the Organization. Cause: The Organization is in the startup phases and the Uniform Grant Requirements are new as 2022 was the first year federal funding was received and the audit for 2022 was completed during 2024. Formal policies and procedures over record retention were not yet in place when getting the Organization's operations started and recommendations from the prior year audit were not received during 2023. Effect or potential effect: The amounts paid to providers and employees could be improperly calculated resulting in an error in the funds covered under the federal grant. Repeat finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-003. Recommendation: We recommend that the management and finance staff work on retaining documentation and training staff to ensure processes and controls are in place over provider payment calculations and payroll. We also recommend a formal check signing process is implemented to ensure authorization of disbursement is documented appropriately. Management response: We agreed with the above comment and will update our policies and procedures to incorporate the recommendations above.