Audit 411190

2023-002: Significant Deficiency in Internal Control Over Compliance - Matching Department of the Interior Youth Engagement, Education, and Employment – Assistance Listing 15.676, Grant Period – year ended December 31, 2023 Condition: During our audit of the USFW program, we noted that the entity does not maintain formal records to track matching contributions. Instead, the entity relies on informal estimates to determine whether matching requirements have been met. These estimates are not supported by detailed documentation or reconciled to actual expenditures. In addition, there is no formal review of the matching contributions. Criteria or specific requirement: Per 2 CFR §200.306, non-Federal entities are required to provide matching contributions as stipulated by the federal award. These contributions must be verifiable from the recipient’s records, not included as contributions for any other federally-assisted project or program, and must be necessary and reasonable for the accomplishment of project or program objectives. Cause: The entity has not implemented a formal process or system to track matching contributions throughout the year. Effect: Without formal tracking, documentation, and review, there is an increased risk that the entity may not meet the required matching contributions, or may report inaccurate amounts to the federal awarding agency. This could result in noncompliance with federal requirements and potential disallowance of federal funds. Questioned costs: Unknown. Although the estimated match appeared reasonable, due to lack of detailed documentation, the actual amount could not be verified. Recommendation: We recommend that the entity implement a formal process to track, review, and approve matching contributions throughout the year. This process should include maintaining supporting documentation for all match-related expenditures and reconciling these amounts to the general ledger. Additionally, the entity should verify whether tracking matching contributions is acceptable at the program level or is required to be tracked at the grant agreement level. Program staff should be trained on federal requirements related to matching to ensure compliance. View of responsible officials and planned corrective action: Northwoods management will train all employees included in USFW activities to use a USFWS code on our current time sheet tracking. This will be implemented in September 2025, and will be reviewed monthly by management, through current time sheet review procedures. We will review time tracking methods with USFWS grant partners to ensure all tracking requirements for the program, and per agreement, are met. Quarterly, program director match contribution will be reconciled from time sheet reports with the general ledger for USFW agreements by the Business Manager. Northwoods management will obtain a review of matching contributions documentation procedures from a qualified non-profit accountant.

2023-003: Significant Deficiency in Internal Control Over Compliance – Program director cost allocation Department of the Interior Youth Engagement, Education, and Employment – Assistance Listing 15.676, Grant Period – year ended December 31, 2023 Condition: During our audit of the USFW program, we noted that Program Directors’ cost allocations were charged to the federal program, however the entity did not maintain documentation—such as time distribution records, personnel activity reports, or certifications—to support the allocation of the Program Directors’ time to the federal program. Criteria or specific requirement: Per 2 CFR §200.430(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The entity does not have a formal process in place to document or certify the time spent by Program Directors whose salaries are allocated to federal programs Effect: Without adequate documentation, there is a risk that unallowable personnel costs may be charged to the federal program. This could result in questioned costs or noncompliance with federal requirements. Questioned costs: Unknown. Although the allocation appeared reasonable, due to lack of documentation, the actual amount could not be verified. Recommendation: We recommend that the entity implement procedures to ensure that all Program Directors whose time is charged to federal programs maintain appropriate documentation. This may include periodic certifications for those working on a single federal program or time distribution records for those working on multiple activities. View of responsible officials and planned corrective action: NorthWoods management will train Program Directors to add a USFW code to their current time sheet tracking for all USFWS activities in September 2025. This will be reviewed regularly in current time sheet review procedures for accuracy. Semi-annually, program director match contributions will be reconciled from time sheet reports with the general ledger for USFW agreements by the Business Manager, and reviewed by the Program Directors. Northwoods management will obtain a review of matching contributions documentation procedures from a qualified non-profit accountant.