Audit 43067

Finding Type ? Material Weakness in internal control over compliance 21.027 Coronavirus State and Local Fiscal Recovery Funds COVID 19 Criteria ? Management is responsible for following the Organization's internal financial polices manual as authorized by the Board of Directors. Condition ? The Organization's internal financial policies manual states the Executive Director is authorized to sign checks up to $5,000. Checks for amounts greater than $5,000 require the signature of the Treasurer or Board Chair. During testing it was noted the Treasurer or Board Chair did not sign checks over $5,000 issued to grant subrecipients. Context ? During the audit, we selected five subrecipients for testing. All five subrecipients received awards over the $5,000 threshold and all five checks did not have the Treasurer or Board Chair's signature. Cause ? Management and the Board selected the grant subrecipients. Once the subrecipients accepted the award the Executive Director issued and signed the checks. Effect ? It is possible expenditures over $5,000 can be paid without proper board approval or knowledge. Recommendation ? The Organization must follow their internal financial polices manual. Views of Responsible Officials ? The Organization?s internal financial policies manual will be revised so the Executive Director has the authority to sign checks up to $15,000. Checks over the amount of $15,000 will require the Treasurer or Board Chair to sign. KYD Network staff and board will receive training on this policy to ensure they follow the updated policy.

Finding Type ? Material Weakness in internal control over compliance 21.027 Coronavirus State and Local Fiscal Recovery Funds COVID 19 Criteria ? Management is responsible for following the Organization's internal financial polices manual as authorized by the Board of Directors. Condition ? The Organization's internal financial policies manual states the Executive Director is authorized to sign checks up to $5,000. Checks for amounts greater than $5,000 require the signature of the Treasurer or Board Chair. During testing it was noted the Treasurer or Board Chair did not sign checks over $5,000 issued to grant subrecipients. Context ? During the audit, we selected five subrecipients for testing. All five subrecipients received awards over the $5,000 threshold and all five checks did not have the Treasurer or Board Chair's signature. Cause ? Management and the Board selected the grant subrecipients. Once the subrecipients accepted the award the Executive Director issued and signed the checks. Effect ? It is possible expenditures over $5,000 can be paid without proper board approval or knowledge. Recommendation ? The Organization must follow their internal financial polices manual. Views of Responsible Officials ? The Organization?s internal financial policies manual will be revised so the Executive Director has the authority to sign checks up to $15,000. Checks over the amount of $15,000 will require the Treasurer or Board Chair to sign. KYD Network staff and board will receive training on this policy to ensure they follow the updated policy.