Audit 411573

Preparation of SEFA Criteria: In accordance with 2 CFR §200.510(b), the auditee is responsible for preparing a Schedule of Expenditures of Federal Awards (SEFA) that is presented fairly in all material respects in relation to the financial statements and includes complete and accurate information for each federal program. This includes identifying all federal expenditures, Assistance Listing Numbers (ALNs), pass-through information, and amounts provided to subrecipients, where applicable. Condition: Management prepared the initial Schedule of Expenditures of Federal Awards; however, the schedule contained numerous material errors and omissions requiring multiple revisions during the audit. Among the deficiencies identified was the omission of material amounts passed through to subrecipients. Additional errors included inaccurate federal expenditure amounts and other information required for proper presentation of the SEFA. As a result, the SEFA required significant auditor assistance and several iterations before it was materially accurate. Cause: Management did not maintain effective internal controls over the preparation and review of the SEFA. Specifically, there was not an adequate process to identify all federal expenditures, accumulate complete program information, identify subrecipient expenditures, and perform a detailed review of the schedule prior to submission for audit. Effect: The SEFA initially submitted for audit was materially misstated. The omissions and inaccuracies, including the exclusion of material subrecipient expenditures, could have resulted in an incorrect determination of major programs, inaccurate federal reporting, and noncompliance with Uniform Guidance reporting requirements had they not been detected during the audit. Questioned Costs: None Recommendations: We recommend management strengthen its controls over the preparation and review of the SEFA by implementing formal procedures to: Reconcile federal expenditures to the general ledger and supporting grant records. Verify that all federal programs, Assistance Listing Numbers, and pass-through information are complete and accurate. Identify and report all amounts provided to subrecipients. Perform and document an independent supervisory review of the completed SEFA before it is provided for audit. Management's View: Management agrees with this finding

Approval and Support for Costs Criteria: Uniform Guidance requires that costs be adequately documented and retained to demonstrate that only costs for allowable activities or allowable costs are charged to federal programs. Documentation should also support that expenditures are incurred during the period of availability and prior to submission for reimbursement. In addition, the Organization’s established internal controls require appropriate approval of costs charged to federal programs. Condition: Supporting documentation could not be provided for costs that were charged to the program to support the allowability of costs and activities and whether the charges were incurred during the appropriate period of performance. Out of the 60 transactions tested for this program, adequate supporting documentation could not be provided for 8 transactions. Additionally, 16 of the 60 transactions tested did not have evidence of appropriate approval of the costs. Cause: The Organization did not have adequate internal controls to ensure supporting documentation was maintained and costs charged to federal programs were appropriately reviewed and approved. Effect: Certain costs could not be supported as allowable, incurred during the appropriate period of performance, or incurred prior to submission for reimbursement. Additionally, the lack of documented approval increases the risk that unallowable or inappropriate costs could be charged to the federal program without appropriate management review. Questioned Costs: Less than $25,000 Recommendations: We recommend that the Organization continue to follow its established internal controls and provide additional training to personnel responsible for processing and approving costs charged to federal programs. The Organization should ensure that adequate supporting documentation is maintained and that all costs are appropriately reviewed and approved before being charged to federal programs. Management's View: Management agrees with this finding.

Reporting Criteria: The program requires monthly and quarterly reports to be submitted by the 15th day of the month following the close of the reporting period. In addition, the Organization is required to maintain sufficient documentation to support the amounts reported to the grantor. Condition: Management was unable to provide several required monthly and quarterly reports requested during the audit. Additionally, for reports that were available, management was unable to provide sufficient supporting documentation to substantiate certain amounts reported. Cause: The Organization experienced significant turnover during the year under audit, resulting in delays in reporting and deficiencies in maintaining supporting documentation for reported amounts. Effect: The inability to provide required reports and adequate supporting documentation for reported amounts limits the ability to verify compliance with program reporting requirements and could result in questioned costs, increased oversight by the grantor, or potential impacts on future grant funding. Questioned Costs: None Recommendations: We recommend the Organization strengthen its internal controls over grant reporting by implementing procedures to ensure all required reports are completed, retained, and submitted timely. Management should also establish procedures to maintain sufficient supporting documentation for all amounts reported to the grantor so that reported information can be readily substantiated during monitoring or audit. Management's View: Management agrees with this finding.

Untimely Completion of the Single Audit Criteria: Pursuant to 2 CFR §200.512(a), non-Federal entities expending $750,000 or more in federal awards during the fiscal year are required to complete and submit the Single Audit reporting package and Data Collection Form to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's reports or nine months after the end of the fiscal year. Condition: The audit for the year ended December 31, 2022, was completed approximately three years after the fiscal year-end due primarily to prolonged delays in management's responses to audit requests and the untimely submission of required supporting documentation. Cause: Management did not maintain effective controls to ensure timely coordination of the audit process, including assigning responsibility for responding to audit requests, monitoring the status of outstanding requests, and providing complete and timely information necessary to complete the audit. Effect: As a result of the delays, the audit was completed well after the Uniform Guidance reporting deadline. Untimely completion of the Single Audit may affect federal awarding agencies' and passthrough entities' ability to monitor the entity's compliance with federal program requirements and may expose the entity to increased oversight or other administrative actions. Questioned Costs: None Recommendations: We recommend management establish formal procedures to ensure timely completion of future audits. Such procedures should include assigning responsibility for audit coordination, maintaining a tracking system for auditor requests, establishing internal deadlines for providing requested documentation, and monitoring the progress of the audit through regular communication with the audit team. Management should also ensure that sufficient personnel and resources are available during the audit to respond promptly to auditor inquiries and information requests. Management's View: Management agrees with this finding.