FAC Explorer

Audit 44183

FY End
2022-06-30
Total Expended
$4.76M
Findings
2
Programs
8
Organization: First Step House, Inc. (UT)
Year: 2022 Accepted: 2023-09-11
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
43075 2022-002 Material Weakness - ABL
619517 2022-002 Material Weakness - ABL

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund and American Rescue Plan Rural Distribution $801,742 Yes 1
93.959 Block Grants for Prevention and Treatment of Substance Abuse $247,539 - 0
93.958 Block Grants for Community Mental Health Services $212,642 - 0
14.231 Emergency Solutions Grant Program $152,630 - 0
14.218 Community Development Block Grants/entitlement Grants $101,531 Yes 0
93.667 Social Services Block Grant $40,000 - 0
64.024 Va Homeless Providers Grant and Per Diem Program $16,142 Yes 0
94.013 Americorps Program $12,000 - 0

Contacts

Name Title Type
WHGEKNVQ8U97 Shawn McMillen Auditee
8013598862 Kelly Bryson Auditor
No contacts on file

Notes to SEFA

Title: Provider Relief Funds Accounting Policies: The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activityof First Step House (the Organization) under programs of the federal government for the year ended June 30,2022. The information is presented in accordance with the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for FederalAwards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of FirstStep House, it is not intended to and does not present the consolidated financial position, changes in net assets,or cash flows of First Step House. Expenditures reported on the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types ofexpenditures are not allowable or are limited as to reimbursement. No federal financial assistance has beenprovided to a subrecipient. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. The Organization received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund (PRF) program (Federal Financial Assistance Listing/CFDA #93.498) during the year ended June 30, 2021. The Organization incurred eligible expenses (including lost revenue) and, therefore, recognized revenue totaling $801,742 for the year ended June 30, 2021, on the consolidated financial statements. In accordance with the 2021 compliance supplement, the PRF program expenditures recognized on the schedule are based on the reporting to HHS for Period 1, defined as payments received during April 10, 2020 to June 30, 2020, and Period 2, defined as payments received during July 1, 2020 to December 31, 2020, as required under the PRF program. The amount of PRF program expenditures included on the schedule requires management to make estimates and assumptions that affect the reported amounts. Accordingly, such expenditures are considered a significantestimate. Estimates and assumptions may include reducing actual expenses by amounts that have been reimbursed or are obligated to be reimbursed by other sources, estimating marginal increases in expenses related to coronavirus and the calculation of lost revenue. Actual results could differ from those estimates.

Finding Details

Finding 2022-002
2022-002 Department of Health and Human Services Federal Financial Assistance Listing/CFDA #93.498 Provider Relief Fund Applicable Federal Award Number and Year ? Period 2 TIN #870290963 Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The total lost revenues included on the report submitted to the Health Resources and Services Administration (HRSA) for Period 2 (Period 2 Report) utilizing Option 3, as defined by HRSA, contained errors. Cause: The Organization did not have an internal control process in place to ensure the calculation of lost revenues was properly calculated. Accordingly, errors in the lost revenue calculation spreadsheet were not identified by management. Effect: The reporting to HRSA for Period 2 was considered incorrect. Lost revenues were included on the report that were not supportable. Questioned Costs: $402,342. The Organization received $801,742 during Period 2. After the error noted, the corrected lost revenues and eligible expenditures totaled $399,400. Context: All key items associated with the five quarters of revenue initially claimed as eligible under the Option 3 lost revenue calculation were tested. There were significant differences noted in all five quarters tested for a difference of $402,342 between the funds received and the revised lost revenues calculated. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process to ensure the lost revenue calculation is accurately calculated. Views of Responsible Officials: Management agrees with this finding and is designing and implementing policies and procedures to address the cause of this finding.
Finding 2022-002
2022-002 Department of Health and Human Services Federal Financial Assistance Listing/CFDA #93.498 Provider Relief Fund Applicable Federal Award Number and Year ? Period 2 TIN #870290963 Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The total lost revenues included on the report submitted to the Health Resources and Services Administration (HRSA) for Period 2 (Period 2 Report) utilizing Option 3, as defined by HRSA, contained errors. Cause: The Organization did not have an internal control process in place to ensure the calculation of lost revenues was properly calculated. Accordingly, errors in the lost revenue calculation spreadsheet were not identified by management. Effect: The reporting to HRSA for Period 2 was considered incorrect. Lost revenues were included on the report that were not supportable. Questioned Costs: $402,342. The Organization received $801,742 during Period 2. After the error noted, the corrected lost revenues and eligible expenditures totaled $399,400. Context: All key items associated with the five quarters of revenue initially claimed as eligible under the Option 3 lost revenue calculation were tested. There were significant differences noted in all five quarters tested for a difference of $402,342 between the funds received and the revised lost revenues calculated. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process to ensure the lost revenue calculation is accurately calculated. Views of Responsible Officials: Management agrees with this finding and is designing and implementing policies and procedures to address the cause of this finding.