Audit 408509

Reporting Type of Finding - Material noncompliance and material weakness in internal control over compliance. Program: COVID-19 - Coronavirus Capital Projects Fund Assistance Listing Number: 21.029 Federal Agency: U.S. Department of Treasury Criteria - The grant agreement for the Coronavirus Capital Projects Fund requires the Organization to submit periodic expenditure reports that accurately reflect allowable program expenditures incurred during the reporting period in accordance with the terms and conditions of the award. The Organization is responsible for establishing and maintaining internal controls to ensure expenditures reported to the pass-through entity are complete, accurate, supported, allowable, and reported in the proper period.Condition - During our testing of reporting compliance, we noted that expenditure reports submitted by the Organization were not prepared in accordance with the requirements of the grant agreement. Specifically: • Certain expenditures were reported on a basis other than accrual accounting. • Certain construction expenditures were reported when construction contracts were executed rather than when the related work was performed and the costs were incurred. • Certain administrative costs were included on expenditure reports even though those costs were not eligible expenditures under the grant agreement. As a result, expenditure reports submitted to the grantor were materially inaccurate and did not accurately reflect allowable expenditures incurred during the reporting periods. Cause - The Organization did not maintain adequate internal controls over the preparation and review of grant expenditure reports to ensure reported expenditures were supported, allowable under the grant agreement, and reported in the appropriate reporting period. In addition, personnel responsible for preparing the reports did not have sufficient procedures in place to verify compliance with program reporting requirements prior to submission. Effect - Expenditures reported to the grantor were materially misstated. Amounts were reported in incorrect reporting periods and included certain costs that were not allowable under the grant agreement. Although the Organization ultimately used grant funds for eligible project purposes and no questioned costs were identified, the expenditure reports submitted to the grantor did not comply with the reporting requirements of the award. This resulted in material noncompliance with the Reporting compliance requirement and increased the risk that noncompliance would not be prevented, detected, or corrected on a timely basis. Questioned costs – None identified. While the Organization reported certain expenditures inaccurately and included certain costs not eligible for reporting under the grant agreement, we identified no questioned costs because grant proceeds were ultimately expended for allowable project purposes. Context - Reports submitted for 2024 included expenditures totaling $3,874,592 when only $2,481,415 was eligible to report. Recommendation - Management should strengthen controls over grant reporting by implementing procedures to ensure that: • Expenditures reported to the grantor are based on expenditures incurred during the reporting period. • Construction costs are reported when the related work is performed and costs are incurred, rather than when contracts are executed.• Expenditures included in reports are reviewed for allowability under the grant agreement. • All reports are independently reviewed and approved prior to submission to verify completeness, accuracy, and compliance with program requirements. Views of responsible official - Management agrees with the finding and plans to implement enhanced review and approval procedures over grant reporting, including reconciliation of reported expenditures to the accounting records, verification of expenditure allowability, and review of reporting requirements contained within the grant agreement before reports are submitted to the grantor.

Late submission of Uniform Guidance Reporting Type of Finding - Other Matter Criteria - In accordance with Uniform Guidance and the Federal Audit Clearinghouse reporting requirements, the Organization is required to submit its reporting package and data collection form within the earlier of 30 calendar days after receipt of the auditor's reports or nine months after the end of the audit period. Condition - The Organization did not submit its reporting package and data collection form by the required deadline. The reporting package was due no later than September 30, 2025; however, as of the date of this report, the submission had not been completed. Management estimates the submission will occur approximately within 30 days as of the date of this report. Cause - The Organization did not have procedures in place to ensure the reporting package was prepared and submitted within the required timeframe. Effect - The Organization was not in compliance with the Federal Audit Clearinghouse reporting deadline. Untimely submission may limit the availability of financial and compliance information to federal agencies and other users and could subject the Organization to additional oversight by federal awarding agencies. Recommendation - Management should establish procedures to monitor Uniform Guidance reporting deadlines and ensure that future reporting packages are completed and submitted in a timely manner. Views of responsible official - Management acknowledges the delay in filing and plans to implement procedures to monitor future reporting deadlines and ensure timely submission of the reporting package and data collection form.