Audit 412443

Finding #2025-003 – Significant Deficiency and Other Noncompliance. Applicable federal program: U. S. Department of Education, Passed through Texas Education Agency, Twenty-First Century Community Learning Centers, Assistance Listing #: 84.287, Contract Numbers: 256950307110006, 266950307110005, and 246950367110005, Contract Years: 08/01/24 – 07/31/25, 08/01/25 – 08/31/26, and 04/15/24 – 07/31/25. Criteria: Under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.305, if advances are provided, management is required to establish policies to minimize the lapse of time between the receipt and the expenditure of funds. Condition and context: In a sample of 30 vendor payments, we found three instances of reimbursement by the grantor totaling approximately $9,600 received approximately three to five months before payments were made to the vendors. Repeat of finding #2024-004. Cause: Boys & Girls Club does not have a policy in place to review the accounts payable to ensure that vendors are paid in a timely manner and invoices are not outstanding for an excess period of time. Effect: Failure to comply with cash management provisions resulted in federal funds being held for three to five months. Recommendation: Strengthen controls to ensure that invoices are paid in a timely manner to ensure federal reimbursements are not being held for an excess period of time. Views of Responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.

Finding #2025-002 – Significant Deficiency and Other Noncompliance. Applicable federal programs: U. S. Department of Education, Passed through Texas Education Agency, Twenty-First Century Community Learning Centers, Assistance Listing #: 84.287, Contract Numbers: 256950307110006, 266950307110005, and 246950367110005, Contract Years: 08/01/24 – 07/31/25, 08/01/25 – 08/31/26, and 04/15/24 – 07/31/25. U. S. Department of Housing and Urban Development, Passed through Brazoria County, Community Development Block Grants/Entitlement Grants, Assistance Listing #: 14.218, Contract Numbers: B-24-UC-48-0005 and B-25-UC-48-0005, Contract years: 10/01/24 – 09/30/25 and 10/01/25 – 09/30/26. U. S. Department of Justice, Passed through Boys & Girls Clubs of America, Juvenile Mentoring Program, Assistance Listing #: 16.726, Contract Numbers: 15JDP-23-GG-01746 and 15PJDP-24-GG-01661, Contract years: 01/01/24 – 12/31/24 and 01/01/25 – 12/31/25. Criteria: Financial management – Management is responsible for establishing a system of internal control over financial reporting that includes identifying, in its accounts, all federal awards received and expended in accordance with Uniform Guidance §200.302. Management is also responsible for preparing a schedule of expenditures of federal awards and for ensuring actual expenditures are reported in accordance with Uniform Guidance §200.510. Condition and context: Boys & Girls Club was unable to produce a report from its general ledger system that supported the expenditures reported in the schedule of expenditures of federal awards. Repeat of finding #2024-002. Cause: Boys & Girls Club did not consistently record the expenditures in the respective QuickBooks class code established for each grant. Therefore, the general ledger by class for federal grants did not agree to the schedule of expenditures of federal awards. Effect: Failure to adequately establish and maintain a system of internal control over financial reporting adversely affected Boys & Girls Club’s ability to correctly identify and summarize federal awards for reporting in accordance with the Uniform Guidance. Recommendation: Establish policies and procedures to record all federal expenditures in the general ledger system by class code in order to generate a report of expenditures by grant. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.