SECTION II Findings Relating to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards (continued) A. Material Weakness in Internal Control Finding 2022-001 Internal Control over Timely Bank Reconciliations Condition: During audit procedures, we reviewed twelve months of bank statements and related bank reconciliations for the audit period. We noted the bank reconciliations were performed three times during the year. The reconciliations were performed as follows: February 2022 through August 2022 (7 months) ? prepared in November 2022 September 2022 through November 2020 (3 months)? prepared in January 2023 January 2022 and December 2022 (2 months) ? prepared March 2023 The last two reconciliations were prepared when requested for audit procedures. The lack of timely preparation had not been noted by supervisory personnel performing their daily accounting functions. Cause: The Organization did not have adequate supervisory review of month-end procedures to detect the bank statement review and bank reconciliations had not been performed in a timely manner for the entire twelve-month period. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: Bank reconciliations are an essential internal control and are necessary in preventing and detecting fraud. They identify accounting and bank errors and provide explanations of the differences between accounting and bank balance cash balances. Due to the small number of, TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) and often remotely located, accounting personnel, this lack of oversite may not be discovered by employees in performing their normal duties. Recommendation: Bank reconciliations should be prepared within 30 days of the receipt of the statement. Banks may not correct any errors (or fraud) that is not detected and reported within that time frame. The bank statement and bank reconciliation should be reviewed by a person other than the preparer and that person should initial and date as reviewed (or electronic procedure of comparable nature). The bank reconciliation balance should agree with the general ledger balance(s). In addition, both statements should be initialed and dated as approved by supervisory personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. We further recommend the organization tie and agree the beginning and ending balances of the twelve months of bank reconciliations. Performing bank reconciliations out of order can be utilized to hide fraudulent cash transactions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
B. Material Weakness in Internal Control Finding 2022-002 Internal Control over Reconciliation of Accounting Records Condition: During audit procedures, we request confirmations be prepared to confirm revenue and accounts receivable at year end from grantors and/or other sources of revenue. The auditor calculates the materiality of revenue to be confirmed, the confirmations are prepared by the client and given to the auditor for actual mailing (or emailing or electronic signature). Due to the Organization?s numerous sources of grants, there were nineteen (19) confirmations, of which two (2) were returned from the initial mailing. After two additional unsuccessful resending of the confirmations, the client obtained, and provided to the auditor, the correct amount(s) to be confirmed, or correct address, or correct contact person, or correct grant contract number. The confirmations were then sent a fourth time, which was successful. Cause: The Organization did not have adequate supervisory review of the work of the Accounting Manager in preparing accurate and complete confirmations with adequate supporting documentation. The Accounting Manager did not have adequate skills, knowledge and experience (SKE) to prepare the confirmations without management supervision, stating she did not understand the policies and procedures regarding the preparation and sending of confirmations. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: There was a lack of communication between management and the Accounting Manager regarding the responsibilities of the Organization and the responsibilities of the auditor. Management did not provide adequate supervision of the audit process and/or designate a person with SKE to TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) evaluate the adequacy and results of the services; and accept responsibility for them, as noted in the signed engagement letter. Recommendation: We recommend the Accounting Manager receive additional training in the audit process and/or receive additional supervision by supervisory personnel. We recommend management provide supervisory review of documents prepared for the audit. If internal supervision is not available, we recommend such services be provided by experienced, outside personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
SECTION III Findings and Questioned Costs C. Material Weakness in Internal Control Finding related to Compliance with Federal Regulations Finding 2022-003 Internal Control over Representative Payee Accounts Condition: During audit procedures, we selected a random sample of 13 checks disbursed from the Representative Payee bank account for control testing. From that sample we removed two checks as void and two checks that were issued for rent and utilities to an outside company. The remaining sample of eight checks issued to/for payees were examined for authorization by the person requesting the check, supporting documentation and the approval of authorizing personnel. Of that sample of the remaining nine checks that were for payments to client, the following was noted: Four of nine (44%) noted ?signed by phone?, with no additional notation of date of contact One (11%) in nine had no authorizing signature, and One (11%) in nine had note that the ?information could not be located?. The residents who funds are managed under the Representative Payee Accounts may reside in federal funded housing. Cause: The Organization did not have adequate internal control of supervisory review of resident payee authorization procedures to detect the payments did not have adequate, sufficient, and documented authorization to release client funds. Criteria: Social Security Administration (SSA), A Guide for Representative Payees, Page 7: ?Organizations that serve as payees The organization must make the account and supporting records available when we ask for them.? Frequently Asked Questions (FAQs) for Representative Payee? ?Social Security law and regulations require payees to use the payments they receive for the current needs of the beneficiary and in their best interests. Required Duties: Provide all records of how payment is spent or saved to SSA upon request. Complete reports accounting for your used of payments, as required?? TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) SECTION III Findings and Questioned Costs Effect: Disbursements from Representative Payee accounts are to follow Federal Guidelines. Failure to follow such guidelines results in failure to follow the fiduciary responsibility of acting on behalf of those who cannot act for themselves. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws. Recommendation: We recommend the Organization develop and follow internal control procedures for the supporting documentation for representative payee accounts which follow the internal control objectives to safeguard assets from unauthorized acquisition (fraud) and reasonable assurance that errors and omission are detected by employees in their normal functions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action. Submitted by: Darcell Slovek-Walker, LMHC Chief Executive Officer
SECTION II Findings Relating to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards (continued) A. Material Weakness in Internal Control Finding 2022-001 Internal Control over Timely Bank Reconciliations Condition: During audit procedures, we reviewed twelve months of bank statements and related bank reconciliations for the audit period. We noted the bank reconciliations were performed three times during the year. The reconciliations were performed as follows: February 2022 through August 2022 (7 months) ? prepared in November 2022 September 2022 through November 2020 (3 months)? prepared in January 2023 January 2022 and December 2022 (2 months) ? prepared March 2023 The last two reconciliations were prepared when requested for audit procedures. The lack of timely preparation had not been noted by supervisory personnel performing their daily accounting functions. Cause: The Organization did not have adequate supervisory review of month-end procedures to detect the bank statement review and bank reconciliations had not been performed in a timely manner for the entire twelve-month period. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: Bank reconciliations are an essential internal control and are necessary in preventing and detecting fraud. They identify accounting and bank errors and provide explanations of the differences between accounting and bank balance cash balances. Due to the small number of, TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) and often remotely located, accounting personnel, this lack of oversite may not be discovered by employees in performing their normal duties. Recommendation: Bank reconciliations should be prepared within 30 days of the receipt of the statement. Banks may not correct any errors (or fraud) that is not detected and reported within that time frame. The bank statement and bank reconciliation should be reviewed by a person other than the preparer and that person should initial and date as reviewed (or electronic procedure of comparable nature). The bank reconciliation balance should agree with the general ledger balance(s). In addition, both statements should be initialed and dated as approved by supervisory personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. We further recommend the organization tie and agree the beginning and ending balances of the twelve months of bank reconciliations. Performing bank reconciliations out of order can be utilized to hide fraudulent cash transactions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
B. Material Weakness in Internal Control Finding 2022-002 Internal Control over Reconciliation of Accounting Records Condition: During audit procedures, we request confirmations be prepared to confirm revenue and accounts receivable at year end from grantors and/or other sources of revenue. The auditor calculates the materiality of revenue to be confirmed, the confirmations are prepared by the client and given to the auditor for actual mailing (or emailing or electronic signature). Due to the Organization?s numerous sources of grants, there were nineteen (19) confirmations, of which two (2) were returned from the initial mailing. After two additional unsuccessful resending of the confirmations, the client obtained, and provided to the auditor, the correct amount(s) to be confirmed, or correct address, or correct contact person, or correct grant contract number. The confirmations were then sent a fourth time, which was successful. Cause: The Organization did not have adequate supervisory review of the work of the Accounting Manager in preparing accurate and complete confirmations with adequate supporting documentation. The Accounting Manager did not have adequate skills, knowledge and experience (SKE) to prepare the confirmations without management supervision, stating she did not understand the policies and procedures regarding the preparation and sending of confirmations. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: There was a lack of communication between management and the Accounting Manager regarding the responsibilities of the Organization and the responsibilities of the auditor. Management did not provide adequate supervision of the audit process and/or designate a person with SKE to TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) evaluate the adequacy and results of the services; and accept responsibility for them, as noted in the signed engagement letter. Recommendation: We recommend the Accounting Manager receive additional training in the audit process and/or receive additional supervision by supervisory personnel. We recommend management provide supervisory review of documents prepared for the audit. If internal supervision is not available, we recommend such services be provided by experienced, outside personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
SECTION III Findings and Questioned Costs C. Material Weakness in Internal Control Finding related to Compliance with Federal Regulations Finding 2022-003 Internal Control over Representative Payee Accounts Condition: During audit procedures, we selected a random sample of 13 checks disbursed from the Representative Payee bank account for control testing. From that sample we removed two checks as void and two checks that were issued for rent and utilities to an outside company. The remaining sample of eight checks issued to/for payees were examined for authorization by the person requesting the check, supporting documentation and the approval of authorizing personnel. Of that sample of the remaining nine checks that were for payments to client, the following was noted: Four of nine (44%) noted ?signed by phone?, with no additional notation of date of contact One (11%) in nine had no authorizing signature, and One (11%) in nine had note that the ?information could not be located?. The residents who funds are managed under the Representative Payee Accounts may reside in federal funded housing. Cause: The Organization did not have adequate internal control of supervisory review of resident payee authorization procedures to detect the payments did not have adequate, sufficient, and documented authorization to release client funds. Criteria: Social Security Administration (SSA), A Guide for Representative Payees, Page 7: ?Organizations that serve as payees The organization must make the account and supporting records available when we ask for them.? Frequently Asked Questions (FAQs) for Representative Payee? ?Social Security law and regulations require payees to use the payments they receive for the current needs of the beneficiary and in their best interests. Required Duties: Provide all records of how payment is spent or saved to SSA upon request. Complete reports accounting for your used of payments, as required?? TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) SECTION III Findings and Questioned Costs Effect: Disbursements from Representative Payee accounts are to follow Federal Guidelines. Failure to follow such guidelines results in failure to follow the fiduciary responsibility of acting on behalf of those who cannot act for themselves. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws. Recommendation: We recommend the Organization develop and follow internal control procedures for the supporting documentation for representative payee accounts which follow the internal control objectives to safeguard assets from unauthorized acquisition (fraud) and reasonable assurance that errors and omission are detected by employees in their normal functions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action. Submitted by: Darcell Slovek-Walker, LMHC Chief Executive Officer
SECTION II Findings Relating to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards (continued) A. Material Weakness in Internal Control Finding 2022-001 Internal Control over Timely Bank Reconciliations Condition: During audit procedures, we reviewed twelve months of bank statements and related bank reconciliations for the audit period. We noted the bank reconciliations were performed three times during the year. The reconciliations were performed as follows: February 2022 through August 2022 (7 months) ? prepared in November 2022 September 2022 through November 2020 (3 months)? prepared in January 2023 January 2022 and December 2022 (2 months) ? prepared March 2023 The last two reconciliations were prepared when requested for audit procedures. The lack of timely preparation had not been noted by supervisory personnel performing their daily accounting functions. Cause: The Organization did not have adequate supervisory review of month-end procedures to detect the bank statement review and bank reconciliations had not been performed in a timely manner for the entire twelve-month period. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: Bank reconciliations are an essential internal control and are necessary in preventing and detecting fraud. They identify accounting and bank errors and provide explanations of the differences between accounting and bank balance cash balances. Due to the small number of, TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) and often remotely located, accounting personnel, this lack of oversite may not be discovered by employees in performing their normal duties. Recommendation: Bank reconciliations should be prepared within 30 days of the receipt of the statement. Banks may not correct any errors (or fraud) that is not detected and reported within that time frame. The bank statement and bank reconciliation should be reviewed by a person other than the preparer and that person should initial and date as reviewed (or electronic procedure of comparable nature). The bank reconciliation balance should agree with the general ledger balance(s). In addition, both statements should be initialed and dated as approved by supervisory personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. We further recommend the organization tie and agree the beginning and ending balances of the twelve months of bank reconciliations. Performing bank reconciliations out of order can be utilized to hide fraudulent cash transactions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
B. Material Weakness in Internal Control Finding 2022-002 Internal Control over Reconciliation of Accounting Records Condition: During audit procedures, we request confirmations be prepared to confirm revenue and accounts receivable at year end from grantors and/or other sources of revenue. The auditor calculates the materiality of revenue to be confirmed, the confirmations are prepared by the client and given to the auditor for actual mailing (or emailing or electronic signature). Due to the Organization?s numerous sources of grants, there were nineteen (19) confirmations, of which two (2) were returned from the initial mailing. After two additional unsuccessful resending of the confirmations, the client obtained, and provided to the auditor, the correct amount(s) to be confirmed, or correct address, or correct contact person, or correct grant contract number. The confirmations were then sent a fourth time, which was successful. Cause: The Organization did not have adequate supervisory review of the work of the Accounting Manager in preparing accurate and complete confirmations with adequate supporting documentation. The Accounting Manager did not have adequate skills, knowledge and experience (SKE) to prepare the confirmations without management supervision, stating she did not understand the policies and procedures regarding the preparation and sending of confirmations. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: There was a lack of communication between management and the Accounting Manager regarding the responsibilities of the Organization and the responsibilities of the auditor. Management did not provide adequate supervision of the audit process and/or designate a person with SKE to TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) evaluate the adequacy and results of the services; and accept responsibility for them, as noted in the signed engagement letter. Recommendation: We recommend the Accounting Manager receive additional training in the audit process and/or receive additional supervision by supervisory personnel. We recommend management provide supervisory review of documents prepared for the audit. If internal supervision is not available, we recommend such services be provided by experienced, outside personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
SECTION III Findings and Questioned Costs C. Material Weakness in Internal Control Finding related to Compliance with Federal Regulations Finding 2022-003 Internal Control over Representative Payee Accounts Condition: During audit procedures, we selected a random sample of 13 checks disbursed from the Representative Payee bank account for control testing. From that sample we removed two checks as void and two checks that were issued for rent and utilities to an outside company. The remaining sample of eight checks issued to/for payees were examined for authorization by the person requesting the check, supporting documentation and the approval of authorizing personnel. Of that sample of the remaining nine checks that were for payments to client, the following was noted: Four of nine (44%) noted ?signed by phone?, with no additional notation of date of contact One (11%) in nine had no authorizing signature, and One (11%) in nine had note that the ?information could not be located?. The residents who funds are managed under the Representative Payee Accounts may reside in federal funded housing. Cause: The Organization did not have adequate internal control of supervisory review of resident payee authorization procedures to detect the payments did not have adequate, sufficient, and documented authorization to release client funds. Criteria: Social Security Administration (SSA), A Guide for Representative Payees, Page 7: ?Organizations that serve as payees The organization must make the account and supporting records available when we ask for them.? Frequently Asked Questions (FAQs) for Representative Payee? ?Social Security law and regulations require payees to use the payments they receive for the current needs of the beneficiary and in their best interests. Required Duties: Provide all records of how payment is spent or saved to SSA upon request. Complete reports accounting for your used of payments, as required?? TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) SECTION III Findings and Questioned Costs Effect: Disbursements from Representative Payee accounts are to follow Federal Guidelines. Failure to follow such guidelines results in failure to follow the fiduciary responsibility of acting on behalf of those who cannot act for themselves. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws. Recommendation: We recommend the Organization develop and follow internal control procedures for the supporting documentation for representative payee accounts which follow the internal control objectives to safeguard assets from unauthorized acquisition (fraud) and reasonable assurance that errors and omission are detected by employees in their normal functions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action. Submitted by: Darcell Slovek-Walker, LMHC Chief Executive Officer
SECTION II Findings Relating to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards (continued) A. Material Weakness in Internal Control Finding 2022-001 Internal Control over Timely Bank Reconciliations Condition: During audit procedures, we reviewed twelve months of bank statements and related bank reconciliations for the audit period. We noted the bank reconciliations were performed three times during the year. The reconciliations were performed as follows: February 2022 through August 2022 (7 months) ? prepared in November 2022 September 2022 through November 2020 (3 months)? prepared in January 2023 January 2022 and December 2022 (2 months) ? prepared March 2023 The last two reconciliations were prepared when requested for audit procedures. The lack of timely preparation had not been noted by supervisory personnel performing their daily accounting functions. Cause: The Organization did not have adequate supervisory review of month-end procedures to detect the bank statement review and bank reconciliations had not been performed in a timely manner for the entire twelve-month period. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: Bank reconciliations are an essential internal control and are necessary in preventing and detecting fraud. They identify accounting and bank errors and provide explanations of the differences between accounting and bank balance cash balances. Due to the small number of, TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) and often remotely located, accounting personnel, this lack of oversite may not be discovered by employees in performing their normal duties. Recommendation: Bank reconciliations should be prepared within 30 days of the receipt of the statement. Banks may not correct any errors (or fraud) that is not detected and reported within that time frame. The bank statement and bank reconciliation should be reviewed by a person other than the preparer and that person should initial and date as reviewed (or electronic procedure of comparable nature). The bank reconciliation balance should agree with the general ledger balance(s). In addition, both statements should be initialed and dated as approved by supervisory personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. We further recommend the organization tie and agree the beginning and ending balances of the twelve months of bank reconciliations. Performing bank reconciliations out of order can be utilized to hide fraudulent cash transactions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
B. Material Weakness in Internal Control Finding 2022-002 Internal Control over Reconciliation of Accounting Records Condition: During audit procedures, we request confirmations be prepared to confirm revenue and accounts receivable at year end from grantors and/or other sources of revenue. The auditor calculates the materiality of revenue to be confirmed, the confirmations are prepared by the client and given to the auditor for actual mailing (or emailing or electronic signature). Due to the Organization?s numerous sources of grants, there were nineteen (19) confirmations, of which two (2) were returned from the initial mailing. After two additional unsuccessful resending of the confirmations, the client obtained, and provided to the auditor, the correct amount(s) to be confirmed, or correct address, or correct contact person, or correct grant contract number. The confirmations were then sent a fourth time, which was successful. Cause: The Organization did not have adequate supervisory review of the work of the Accounting Manager in preparing accurate and complete confirmations with adequate supporting documentation. The Accounting Manager did not have adequate skills, knowledge and experience (SKE) to prepare the confirmations without management supervision, stating she did not understand the policies and procedures regarding the preparation and sending of confirmations. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: There was a lack of communication between management and the Accounting Manager regarding the responsibilities of the Organization and the responsibilities of the auditor. Management did not provide adequate supervision of the audit process and/or designate a person with SKE to TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) evaluate the adequacy and results of the services; and accept responsibility for them, as noted in the signed engagement letter. Recommendation: We recommend the Accounting Manager receive additional training in the audit process and/or receive additional supervision by supervisory personnel. We recommend management provide supervisory review of documents prepared for the audit. If internal supervision is not available, we recommend such services be provided by experienced, outside personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
SECTION III Findings and Questioned Costs C. Material Weakness in Internal Control Finding related to Compliance with Federal Regulations Finding 2022-003 Internal Control over Representative Payee Accounts Condition: During audit procedures, we selected a random sample of 13 checks disbursed from the Representative Payee bank account for control testing. From that sample we removed two checks as void and two checks that were issued for rent and utilities to an outside company. The remaining sample of eight checks issued to/for payees were examined for authorization by the person requesting the check, supporting documentation and the approval of authorizing personnel. Of that sample of the remaining nine checks that were for payments to client, the following was noted: Four of nine (44%) noted ?signed by phone?, with no additional notation of date of contact One (11%) in nine had no authorizing signature, and One (11%) in nine had note that the ?information could not be located?. The residents who funds are managed under the Representative Payee Accounts may reside in federal funded housing. Cause: The Organization did not have adequate internal control of supervisory review of resident payee authorization procedures to detect the payments did not have adequate, sufficient, and documented authorization to release client funds. Criteria: Social Security Administration (SSA), A Guide for Representative Payees, Page 7: ?Organizations that serve as payees The organization must make the account and supporting records available when we ask for them.? Frequently Asked Questions (FAQs) for Representative Payee? ?Social Security law and regulations require payees to use the payments they receive for the current needs of the beneficiary and in their best interests. Required Duties: Provide all records of how payment is spent or saved to SSA upon request. Complete reports accounting for your used of payments, as required?? TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) SECTION III Findings and Questioned Costs Effect: Disbursements from Representative Payee accounts are to follow Federal Guidelines. Failure to follow such guidelines results in failure to follow the fiduciary responsibility of acting on behalf of those who cannot act for themselves. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws. Recommendation: We recommend the Organization develop and follow internal control procedures for the supporting documentation for representative payee accounts which follow the internal control objectives to safeguard assets from unauthorized acquisition (fraud) and reasonable assurance that errors and omission are detected by employees in their normal functions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action. Submitted by: Darcell Slovek-Walker, LMHC Chief Executive Officer
SECTION II Findings Relating to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards (continued) A. Material Weakness in Internal Control Finding 2022-001 Internal Control over Timely Bank Reconciliations Condition: During audit procedures, we reviewed twelve months of bank statements and related bank reconciliations for the audit period. We noted the bank reconciliations were performed three times during the year. The reconciliations were performed as follows: February 2022 through August 2022 (7 months) ? prepared in November 2022 September 2022 through November 2020 (3 months)? prepared in January 2023 January 2022 and December 2022 (2 months) ? prepared March 2023 The last two reconciliations were prepared when requested for audit procedures. The lack of timely preparation had not been noted by supervisory personnel performing their daily accounting functions. Cause: The Organization did not have adequate supervisory review of month-end procedures to detect the bank statement review and bank reconciliations had not been performed in a timely manner for the entire twelve-month period. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: Bank reconciliations are an essential internal control and are necessary in preventing and detecting fraud. They identify accounting and bank errors and provide explanations of the differences between accounting and bank balance cash balances. Due to the small number of, TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) and often remotely located, accounting personnel, this lack of oversite may not be discovered by employees in performing their normal duties. Recommendation: Bank reconciliations should be prepared within 30 days of the receipt of the statement. Banks may not correct any errors (or fraud) that is not detected and reported within that time frame. The bank statement and bank reconciliation should be reviewed by a person other than the preparer and that person should initial and date as reviewed (or electronic procedure of comparable nature). The bank reconciliation balance should agree with the general ledger balance(s). In addition, both statements should be initialed and dated as approved by supervisory personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. We further recommend the organization tie and agree the beginning and ending balances of the twelve months of bank reconciliations. Performing bank reconciliations out of order can be utilized to hide fraudulent cash transactions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
B. Material Weakness in Internal Control Finding 2022-002 Internal Control over Reconciliation of Accounting Records Condition: During audit procedures, we request confirmations be prepared to confirm revenue and accounts receivable at year end from grantors and/or other sources of revenue. The auditor calculates the materiality of revenue to be confirmed, the confirmations are prepared by the client and given to the auditor for actual mailing (or emailing or electronic signature). Due to the Organization?s numerous sources of grants, there were nineteen (19) confirmations, of which two (2) were returned from the initial mailing. After two additional unsuccessful resending of the confirmations, the client obtained, and provided to the auditor, the correct amount(s) to be confirmed, or correct address, or correct contact person, or correct grant contract number. The confirmations were then sent a fourth time, which was successful. Cause: The Organization did not have adequate supervisory review of the work of the Accounting Manager in preparing accurate and complete confirmations with adequate supporting documentation. The Accounting Manager did not have adequate skills, knowledge and experience (SKE) to prepare the confirmations without management supervision, stating she did not understand the policies and procedures regarding the preparation and sending of confirmations. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: There was a lack of communication between management and the Accounting Manager regarding the responsibilities of the Organization and the responsibilities of the auditor. Management did not provide adequate supervision of the audit process and/or designate a person with SKE to TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) evaluate the adequacy and results of the services; and accept responsibility for them, as noted in the signed engagement letter. Recommendation: We recommend the Accounting Manager receive additional training in the audit process and/or receive additional supervision by supervisory personnel. We recommend management provide supervisory review of documents prepared for the audit. If internal supervision is not available, we recommend such services be provided by experienced, outside personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
SECTION III Findings and Questioned Costs C. Material Weakness in Internal Control Finding related to Compliance with Federal Regulations Finding 2022-003 Internal Control over Representative Payee Accounts Condition: During audit procedures, we selected a random sample of 13 checks disbursed from the Representative Payee bank account for control testing. From that sample we removed two checks as void and two checks that were issued for rent and utilities to an outside company. The remaining sample of eight checks issued to/for payees were examined for authorization by the person requesting the check, supporting documentation and the approval of authorizing personnel. Of that sample of the remaining nine checks that were for payments to client, the following was noted: Four of nine (44%) noted ?signed by phone?, with no additional notation of date of contact One (11%) in nine had no authorizing signature, and One (11%) in nine had note that the ?information could not be located?. The residents who funds are managed under the Representative Payee Accounts may reside in federal funded housing. Cause: The Organization did not have adequate internal control of supervisory review of resident payee authorization procedures to detect the payments did not have adequate, sufficient, and documented authorization to release client funds. Criteria: Social Security Administration (SSA), A Guide for Representative Payees, Page 7: ?Organizations that serve as payees The organization must make the account and supporting records available when we ask for them.? Frequently Asked Questions (FAQs) for Representative Payee? ?Social Security law and regulations require payees to use the payments they receive for the current needs of the beneficiary and in their best interests. Required Duties: Provide all records of how payment is spent or saved to SSA upon request. Complete reports accounting for your used of payments, as required?? TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) SECTION III Findings and Questioned Costs Effect: Disbursements from Representative Payee accounts are to follow Federal Guidelines. Failure to follow such guidelines results in failure to follow the fiduciary responsibility of acting on behalf of those who cannot act for themselves. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws. Recommendation: We recommend the Organization develop and follow internal control procedures for the supporting documentation for representative payee accounts which follow the internal control objectives to safeguard assets from unauthorized acquisition (fraud) and reasonable assurance that errors and omission are detected by employees in their normal functions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action. Submitted by: Darcell Slovek-Walker, LMHC Chief Executive Officer
SECTION II Findings Relating to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards (continued) A. Material Weakness in Internal Control Finding 2022-001 Internal Control over Timely Bank Reconciliations Condition: During audit procedures, we reviewed twelve months of bank statements and related bank reconciliations for the audit period. We noted the bank reconciliations were performed three times during the year. The reconciliations were performed as follows: February 2022 through August 2022 (7 months) ? prepared in November 2022 September 2022 through November 2020 (3 months)? prepared in January 2023 January 2022 and December 2022 (2 months) ? prepared March 2023 The last two reconciliations were prepared when requested for audit procedures. The lack of timely preparation had not been noted by supervisory personnel performing their daily accounting functions. Cause: The Organization did not have adequate supervisory review of month-end procedures to detect the bank statement review and bank reconciliations had not been performed in a timely manner for the entire twelve-month period. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: Bank reconciliations are an essential internal control and are necessary in preventing and detecting fraud. They identify accounting and bank errors and provide explanations of the differences between accounting and bank balance cash balances. Due to the small number of, TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) and often remotely located, accounting personnel, this lack of oversite may not be discovered by employees in performing their normal duties. Recommendation: Bank reconciliations should be prepared within 30 days of the receipt of the statement. Banks may not correct any errors (or fraud) that is not detected and reported within that time frame. The bank statement and bank reconciliation should be reviewed by a person other than the preparer and that person should initial and date as reviewed (or electronic procedure of comparable nature). The bank reconciliation balance should agree with the general ledger balance(s). In addition, both statements should be initialed and dated as approved by supervisory personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. We further recommend the organization tie and agree the beginning and ending balances of the twelve months of bank reconciliations. Performing bank reconciliations out of order can be utilized to hide fraudulent cash transactions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
B. Material Weakness in Internal Control Finding 2022-002 Internal Control over Reconciliation of Accounting Records Condition: During audit procedures, we request confirmations be prepared to confirm revenue and accounts receivable at year end from grantors and/or other sources of revenue. The auditor calculates the materiality of revenue to be confirmed, the confirmations are prepared by the client and given to the auditor for actual mailing (or emailing or electronic signature). Due to the Organization?s numerous sources of grants, there were nineteen (19) confirmations, of which two (2) were returned from the initial mailing. After two additional unsuccessful resending of the confirmations, the client obtained, and provided to the auditor, the correct amount(s) to be confirmed, or correct address, or correct contact person, or correct grant contract number. The confirmations were then sent a fourth time, which was successful. Cause: The Organization did not have adequate supervisory review of the work of the Accounting Manager in preparing accurate and complete confirmations with adequate supporting documentation. The Accounting Manager did not have adequate skills, knowledge and experience (SKE) to prepare the confirmations without management supervision, stating she did not understand the policies and procedures regarding the preparation and sending of confirmations. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: There was a lack of communication between management and the Accounting Manager regarding the responsibilities of the Organization and the responsibilities of the auditor. Management did not provide adequate supervision of the audit process and/or designate a person with SKE to TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) evaluate the adequacy and results of the services; and accept responsibility for them, as noted in the signed engagement letter. Recommendation: We recommend the Accounting Manager receive additional training in the audit process and/or receive additional supervision by supervisory personnel. We recommend management provide supervisory review of documents prepared for the audit. If internal supervision is not available, we recommend such services be provided by experienced, outside personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
SECTION III Findings and Questioned Costs C. Material Weakness in Internal Control Finding related to Compliance with Federal Regulations Finding 2022-003 Internal Control over Representative Payee Accounts Condition: During audit procedures, we selected a random sample of 13 checks disbursed from the Representative Payee bank account for control testing. From that sample we removed two checks as void and two checks that were issued for rent and utilities to an outside company. The remaining sample of eight checks issued to/for payees were examined for authorization by the person requesting the check, supporting documentation and the approval of authorizing personnel. Of that sample of the remaining nine checks that were for payments to client, the following was noted: Four of nine (44%) noted ?signed by phone?, with no additional notation of date of contact One (11%) in nine had no authorizing signature, and One (11%) in nine had note that the ?information could not be located?. The residents who funds are managed under the Representative Payee Accounts may reside in federal funded housing. Cause: The Organization did not have adequate internal control of supervisory review of resident payee authorization procedures to detect the payments did not have adequate, sufficient, and documented authorization to release client funds. Criteria: Social Security Administration (SSA), A Guide for Representative Payees, Page 7: ?Organizations that serve as payees The organization must make the account and supporting records available when we ask for them.? Frequently Asked Questions (FAQs) for Representative Payee? ?Social Security law and regulations require payees to use the payments they receive for the current needs of the beneficiary and in their best interests. Required Duties: Provide all records of how payment is spent or saved to SSA upon request. Complete reports accounting for your used of payments, as required?? TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) SECTION III Findings and Questioned Costs Effect: Disbursements from Representative Payee accounts are to follow Federal Guidelines. Failure to follow such guidelines results in failure to follow the fiduciary responsibility of acting on behalf of those who cannot act for themselves. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws. Recommendation: We recommend the Organization develop and follow internal control procedures for the supporting documentation for representative payee accounts which follow the internal control objectives to safeguard assets from unauthorized acquisition (fraud) and reasonable assurance that errors and omission are detected by employees in their normal functions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action. Submitted by: Darcell Slovek-Walker, LMHC Chief Executive Officer
SECTION II Findings Relating to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards (continued) A. Material Weakness in Internal Control Finding 2022-001 Internal Control over Timely Bank Reconciliations Condition: During audit procedures, we reviewed twelve months of bank statements and related bank reconciliations for the audit period. We noted the bank reconciliations were performed three times during the year. The reconciliations were performed as follows: February 2022 through August 2022 (7 months) ? prepared in November 2022 September 2022 through November 2020 (3 months)? prepared in January 2023 January 2022 and December 2022 (2 months) ? prepared March 2023 The last two reconciliations were prepared when requested for audit procedures. The lack of timely preparation had not been noted by supervisory personnel performing their daily accounting functions. Cause: The Organization did not have adequate supervisory review of month-end procedures to detect the bank statement review and bank reconciliations had not been performed in a timely manner for the entire twelve-month period. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: Bank reconciliations are an essential internal control and are necessary in preventing and detecting fraud. They identify accounting and bank errors and provide explanations of the differences between accounting and bank balance cash balances. Due to the small number of, TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) and often remotely located, accounting personnel, this lack of oversite may not be discovered by employees in performing their normal duties. Recommendation: Bank reconciliations should be prepared within 30 days of the receipt of the statement. Banks may not correct any errors (or fraud) that is not detected and reported within that time frame. The bank statement and bank reconciliation should be reviewed by a person other than the preparer and that person should initial and date as reviewed (or electronic procedure of comparable nature). The bank reconciliation balance should agree with the general ledger balance(s). In addition, both statements should be initialed and dated as approved by supervisory personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. We further recommend the organization tie and agree the beginning and ending balances of the twelve months of bank reconciliations. Performing bank reconciliations out of order can be utilized to hide fraudulent cash transactions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
B. Material Weakness in Internal Control Finding 2022-002 Internal Control over Reconciliation of Accounting Records Condition: During audit procedures, we request confirmations be prepared to confirm revenue and accounts receivable at year end from grantors and/or other sources of revenue. The auditor calculates the materiality of revenue to be confirmed, the confirmations are prepared by the client and given to the auditor for actual mailing (or emailing or electronic signature). Due to the Organization?s numerous sources of grants, there were nineteen (19) confirmations, of which two (2) were returned from the initial mailing. After two additional unsuccessful resending of the confirmations, the client obtained, and provided to the auditor, the correct amount(s) to be confirmed, or correct address, or correct contact person, or correct grant contract number. The confirmations were then sent a fourth time, which was successful. Cause: The Organization did not have adequate supervisory review of the work of the Accounting Manager in preparing accurate and complete confirmations with adequate supporting documentation. The Accounting Manager did not have adequate skills, knowledge and experience (SKE) to prepare the confirmations without management supervision, stating she did not understand the policies and procedures regarding the preparation and sending of confirmations. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: There was a lack of communication between management and the Accounting Manager regarding the responsibilities of the Organization and the responsibilities of the auditor. Management did not provide adequate supervision of the audit process and/or designate a person with SKE to TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) evaluate the adequacy and results of the services; and accept responsibility for them, as noted in the signed engagement letter. Recommendation: We recommend the Accounting Manager receive additional training in the audit process and/or receive additional supervision by supervisory personnel. We recommend management provide supervisory review of documents prepared for the audit. If internal supervision is not available, we recommend such services be provided by experienced, outside personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
SECTION III Findings and Questioned Costs C. Material Weakness in Internal Control Finding related to Compliance with Federal Regulations Finding 2022-003 Internal Control over Representative Payee Accounts Condition: During audit procedures, we selected a random sample of 13 checks disbursed from the Representative Payee bank account for control testing. From that sample we removed two checks as void and two checks that were issued for rent and utilities to an outside company. The remaining sample of eight checks issued to/for payees were examined for authorization by the person requesting the check, supporting documentation and the approval of authorizing personnel. Of that sample of the remaining nine checks that were for payments to client, the following was noted: Four of nine (44%) noted ?signed by phone?, with no additional notation of date of contact One (11%) in nine had no authorizing signature, and One (11%) in nine had note that the ?information could not be located?. The residents who funds are managed under the Representative Payee Accounts may reside in federal funded housing. Cause: The Organization did not have adequate internal control of supervisory review of resident payee authorization procedures to detect the payments did not have adequate, sufficient, and documented authorization to release client funds. Criteria: Social Security Administration (SSA), A Guide for Representative Payees, Page 7: ?Organizations that serve as payees The organization must make the account and supporting records available when we ask for them.? Frequently Asked Questions (FAQs) for Representative Payee? ?Social Security law and regulations require payees to use the payments they receive for the current needs of the beneficiary and in their best interests. Required Duties: Provide all records of how payment is spent or saved to SSA upon request. Complete reports accounting for your used of payments, as required?? TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) SECTION III Findings and Questioned Costs Effect: Disbursements from Representative Payee accounts are to follow Federal Guidelines. Failure to follow such guidelines results in failure to follow the fiduciary responsibility of acting on behalf of those who cannot act for themselves. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws. Recommendation: We recommend the Organization develop and follow internal control procedures for the supporting documentation for representative payee accounts which follow the internal control objectives to safeguard assets from unauthorized acquisition (fraud) and reasonable assurance that errors and omission are detected by employees in their normal functions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action. Submitted by: Darcell Slovek-Walker, LMHC Chief Executive Officer
SECTION II Findings Relating to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards (continued) A. Material Weakness in Internal Control Finding 2022-001 Internal Control over Timely Bank Reconciliations Condition: During audit procedures, we reviewed twelve months of bank statements and related bank reconciliations for the audit period. We noted the bank reconciliations were performed three times during the year. The reconciliations were performed as follows: February 2022 through August 2022 (7 months) ? prepared in November 2022 September 2022 through November 2020 (3 months)? prepared in January 2023 January 2022 and December 2022 (2 months) ? prepared March 2023 The last two reconciliations were prepared when requested for audit procedures. The lack of timely preparation had not been noted by supervisory personnel performing their daily accounting functions. Cause: The Organization did not have adequate supervisory review of month-end procedures to detect the bank statement review and bank reconciliations had not been performed in a timely manner for the entire twelve-month period. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: Bank reconciliations are an essential internal control and are necessary in preventing and detecting fraud. They identify accounting and bank errors and provide explanations of the differences between accounting and bank balance cash balances. Due to the small number of, TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) and often remotely located, accounting personnel, this lack of oversite may not be discovered by employees in performing their normal duties. Recommendation: Bank reconciliations should be prepared within 30 days of the receipt of the statement. Banks may not correct any errors (or fraud) that is not detected and reported within that time frame. The bank statement and bank reconciliation should be reviewed by a person other than the preparer and that person should initial and date as reviewed (or electronic procedure of comparable nature). The bank reconciliation balance should agree with the general ledger balance(s). In addition, both statements should be initialed and dated as approved by supervisory personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. We further recommend the organization tie and agree the beginning and ending balances of the twelve months of bank reconciliations. Performing bank reconciliations out of order can be utilized to hide fraudulent cash transactions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
B. Material Weakness in Internal Control Finding 2022-002 Internal Control over Reconciliation of Accounting Records Condition: During audit procedures, we request confirmations be prepared to confirm revenue and accounts receivable at year end from grantors and/or other sources of revenue. The auditor calculates the materiality of revenue to be confirmed, the confirmations are prepared by the client and given to the auditor for actual mailing (or emailing or electronic signature). Due to the Organization?s numerous sources of grants, there were nineteen (19) confirmations, of which two (2) were returned from the initial mailing. After two additional unsuccessful resending of the confirmations, the client obtained, and provided to the auditor, the correct amount(s) to be confirmed, or correct address, or correct contact person, or correct grant contract number. The confirmations were then sent a fourth time, which was successful. Cause: The Organization did not have adequate supervisory review of the work of the Accounting Manager in preparing accurate and complete confirmations with adequate supporting documentation. The Accounting Manager did not have adequate skills, knowledge and experience (SKE) to prepare the confirmations without management supervision, stating she did not understand the policies and procedures regarding the preparation and sending of confirmations. Criteria: Uniform Guidance Part 6 ? Internal Control The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Government Auditing Standards Chapter 5 Internal Control Requirement: System of Quality Control 5.04 An audit organization should document its quality control policies and procedures and communicate those policies and procedures to its personnel. The audit organization should document compliance with its quality control policies and procedures and maintain such documentation for a period of time sufficient to enable those performing monitoring. Effect: There was a lack of communication between management and the Accounting Manager regarding the responsibilities of the Organization and the responsibilities of the auditor. Management did not provide adequate supervision of the audit process and/or designate a person with SKE to TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) evaluate the adequacy and results of the services; and accept responsibility for them, as noted in the signed engagement letter. Recommendation: We recommend the Accounting Manager receive additional training in the audit process and/or receive additional supervision by supervisory personnel. We recommend management provide supervisory review of documents prepared for the audit. If internal supervision is not available, we recommend such services be provided by experienced, outside personnel. We recommend supervisory personnel review accounting information provided to the auditor to verify it is complete, accurate, and has been timely prepared. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action.
SECTION III Findings and Questioned Costs C. Material Weakness in Internal Control Finding related to Compliance with Federal Regulations Finding 2022-003 Internal Control over Representative Payee Accounts Condition: During audit procedures, we selected a random sample of 13 checks disbursed from the Representative Payee bank account for control testing. From that sample we removed two checks as void and two checks that were issued for rent and utilities to an outside company. The remaining sample of eight checks issued to/for payees were examined for authorization by the person requesting the check, supporting documentation and the approval of authorizing personnel. Of that sample of the remaining nine checks that were for payments to client, the following was noted: Four of nine (44%) noted ?signed by phone?, with no additional notation of date of contact One (11%) in nine had no authorizing signature, and One (11%) in nine had note that the ?information could not be located?. The residents who funds are managed under the Representative Payee Accounts may reside in federal funded housing. Cause: The Organization did not have adequate internal control of supervisory review of resident payee authorization procedures to detect the payments did not have adequate, sufficient, and documented authorization to release client funds. Criteria: Social Security Administration (SSA), A Guide for Representative Payees, Page 7: ?Organizations that serve as payees The organization must make the account and supporting records available when we ask for them.? Frequently Asked Questions (FAQs) for Representative Payee? ?Social Security law and regulations require payees to use the payments they receive for the current needs of the beneficiary and in their best interests. Required Duties: Provide all records of how payment is spent or saved to SSA upon request. Complete reports accounting for your used of payments, as required?? TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) SECTION III Findings and Questioned Costs Effect: Disbursements from Representative Payee accounts are to follow Federal Guidelines. Failure to follow such guidelines results in failure to follow the fiduciary responsibility of acting on behalf of those who cannot act for themselves. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws. Recommendation: We recommend the Organization develop and follow internal control procedures for the supporting documentation for representative payee accounts which follow the internal control objectives to safeguard assets from unauthorized acquisition (fraud) and reasonable assurance that errors and omission are detected by employees in their normal functions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action. Submitted by: Darcell Slovek-Walker, LMHC Chief Executive Officer