Audit 407667

Condition: Complete and adequate documentation was not available to demonstrate that program income (occupancy charges) from program participants under CFDA 14.267 – HUD Continuum of Care was properly assessed, calculated, collected, recorded, and monitored. Effect: Because this documentation was incomplete or missing, we were unable to determine that program income was correctly stated in the financial statements. It is possible that program income may not have been equitably assessed or fully collected, and amounts received may not have been properly deposited. The amount of program income collected was approximately $36,000 for this fiscal year. Based upon available records, it appears reasonable to expect program income could have been up to approximately $30,000 higher than the amount shown in the financial statements. Our test work did indicate all amounts collected were appropriately used for allowable program activities. Cause: The Organization did not have adequate written and monitoring procedures in place to ensure program income activities were consistently documented and reviewed. Criteria: Although program income was voluntarily assessed, best practices and federal internal control expectations require complete documentation of fee assessment, collection, and monitoring to ensure transparency and accountability. Recommendation: Although the program has been discontinued, the Organization should establish clear procedures for documenting and monitoring program income if program income is collected in the future.

Condition: The Organization has not been able to meet the federal requirement to submit a final audited reporting package and completed data collection form (DCF) to the federal audit clearing house by the required due date. Effect: Timely assurance to federal program administrators and Organization board of directors that financial results and compliance with federal program requirements are not currently provided, which may also affect the Organization’s ability to obtain desired or adequate funding. Cause: The complexity of the contracts undertaken by the Organization had a significant learning curve to properly administer them. Criteria: Federal audits with financial reports in accordance with Generally Accepted Accounting Principles (GAAP) are to be filed within thirty days after receiving the auditor’s report or nine months after the Organization’s fiscal year, whichever date comes first. Recommendation: The Organization has procured a new accounting service in the past fiscal year that is helping the Organization improve their accounting and contract administration procedures and ability to monitor them. We recommend the Organization to continue to work with the new accounting staff to adopt written procedures that will remedy this situation.

The Organization did not have a comprehensive contract management system with written procedures and controls to identify and monitor all government funds applicable to the Organization. Effect: This condition has resulted in delayed funding to the Organization. Cause: Not-for-profit organizations without a full-time CFO and/or a compliance officer sometimes have difficulty monitoring compliance requirements. Criteria: Formal written procedures are needed to identify and monitor compliance requirements to ensure compliance with government laws and rules. Recommendation: We recommend the Organization work with its accounting firm to identify all major government funding requirements applicable to the Organization.