Audit 45800

FINDING 2022-003 Program Information: COVID-19 Governor?s Emergency Education Relief Fund (84.425C) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Federal Compliance Requirement: M. Subrecipient Monitoring - The pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). The State of Georgia stipulates GEER II Funds may not be used for administrative or executive salaries or benefits, or for any purpose not permitted under Section 312 of the CRRSAA. Condition: The Organization did not have sufficient monitoring processes in place to detect unallowable personnel costs charged to the GEER grant. The Organization did not maintain sufficient audit evidence for subrecipient payroll charges under the grant. Cause: Lack of administrative oversight with respect to subrecipient monitoring requirements. Effect or Potential Effect: The Organization was not in compliance with subrecipient monitoring requirements. Questioned Costs: $48,121 Context: We noted the following exceptions: For 11 of 51 monthly invoices selected for testing, the Organization did not properly identify unallowable personnel costs charged to the grant. For 17 of 51 monthly invoices selected for testing, the Organization did not properly verify hours charged to the grant by club employees. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its policies and procedures over subrecipient monitoring to properly detect and prevent unallowable charges to the grant as well as maintain sufficient audit evidence for all grant expenditures. Views of Responsible Officials and Planned Corrective Actions: Management will update subrecipient monitoring procedures to ensure compliance with subrecipient monitoring requirements and will continue to follow these enhanced policies to properly detect and prevent unallowable charges to the grant. Management will implement monitoring processes to ensure subrecipients submit sufficient documentation prior to disbursing funds.

FINDING 2022-002 Program Information: COVID-19 Governor?s Emergency Education Relief Fund (84.425C) and COVID-19 Elementary and Secondary School Emergency Relief Fund (84.425U) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR section 200.516(a)(6) (a) The auditor must report the following as audit findings in a schedule of findings and questioned costs: (6) Known or likely fraud affecting a Federal award, unless such fraud is otherwise reported as an audit finding in the schedule of findings and questioned costs for Federal awards. Condition: A subrecipient of the Organization reported alleged fraud arising from grant mismanagement and misuse related to GEER and ESSER funding. Cause: Alleged collusion between employees at the subrecipient entity. Effect or Potential Effect: Unknown at this time. Questioned Costs: Not determinable. Context: Two employees of the subrecipient entity are alleged to have colluded in order to perpetrate fraud against the entity. The alleged fraud is purported to include alleged misappropriation of assets as well as alleged direct financial fraud. Once the Organization was alerted to the fraud, a funding hold was placed on the subrecipient entity, pending the results of ongoing investigations. Both employees alleged to have committed the fraud are no longer employed at the subrecipient organization. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization continue to monitor the various investigations of the alleged fraud currently taking place. We further recommend that the Organization consider requiring subrecipient entities to submit disclosures of any workplace nepotism related to personnel with financial or reporting responsibilities. If personnel with reporting responsibilities are related to one another, the organization should require that subrecipient entities detail what additional review process or internal controls will take place to mitigate potential risks that may arise from workplace nepotism. Views of Responsible Officials and Planned Corrective Actions: Management will continue to closely monitor the situation.

FINDING 2022-003 Program Information: COVID-19 Governor?s Emergency Education Relief Fund (84.425C) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Federal Compliance Requirement: M. Subrecipient Monitoring - The pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). The State of Georgia stipulates GEER II Funds may not be used for administrative or executive salaries or benefits, or for any purpose not permitted under Section 312 of the CRRSAA. Condition: The Organization did not have sufficient monitoring processes in place to detect unallowable personnel costs charged to the GEER grant. The Organization did not maintain sufficient audit evidence for subrecipient payroll charges under the grant. Cause: Lack of administrative oversight with respect to subrecipient monitoring requirements. Effect or Potential Effect: The Organization was not in compliance with subrecipient monitoring requirements. Questioned Costs: $48,121 Context: We noted the following exceptions: For 11 of 51 monthly invoices selected for testing, the Organization did not properly identify unallowable personnel costs charged to the grant. For 17 of 51 monthly invoices selected for testing, the Organization did not properly verify hours charged to the grant by club employees. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its policies and procedures over subrecipient monitoring to properly detect and prevent unallowable charges to the grant as well as maintain sufficient audit evidence for all grant expenditures. Views of Responsible Officials and Planned Corrective Actions: Management will update subrecipient monitoring procedures to ensure compliance with subrecipient monitoring requirements and will continue to follow these enhanced policies to properly detect and prevent unallowable charges to the grant. Management will implement monitoring processes to ensure subrecipients submit sufficient documentation prior to disbursing funds.

FINDING 2022-002 Program Information: COVID-19 Governor?s Emergency Education Relief Fund (84.425C) and COVID-19 Elementary and Secondary School Emergency Relief Fund (84.425U) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR section 200.516(a)(6) (a) The auditor must report the following as audit findings in a schedule of findings and questioned costs: (6) Known or likely fraud affecting a Federal award, unless such fraud is otherwise reported as an audit finding in the schedule of findings and questioned costs for Federal awards. Condition: A subrecipient of the Organization reported alleged fraud arising from grant mismanagement and misuse related to GEER and ESSER funding. Cause: Alleged collusion between employees at the subrecipient entity. Effect or Potential Effect: Unknown at this time. Questioned Costs: Not determinable. Context: Two employees of the subrecipient entity are alleged to have colluded in order to perpetrate fraud against the entity. The alleged fraud is purported to include alleged misappropriation of assets as well as alleged direct financial fraud. Once the Organization was alerted to the fraud, a funding hold was placed on the subrecipient entity, pending the results of ongoing investigations. Both employees alleged to have committed the fraud are no longer employed at the subrecipient organization. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization continue to monitor the various investigations of the alleged fraud currently taking place. We further recommend that the Organization consider requiring subrecipient entities to submit disclosures of any workplace nepotism related to personnel with financial or reporting responsibilities. If personnel with reporting responsibilities are related to one another, the organization should require that subrecipient entities detail what additional review process or internal controls will take place to mitigate potential risks that may arise from workplace nepotism. Views of Responsible Officials and Planned Corrective Actions: Management will continue to closely monitor the situation.