2022-002 ? Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Information on the Federal Program: U.S. Small Business Administration Assistance Listing Number: 59.008 Assistance Listing Name: Economic Injury Disaster Loan Criteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section ?200.502 Basis for determining Federal awards expended.? The schedule must provide total Federal awards expended for each individual Federal program. In accordance with ?200.302 Financial Management, a non-federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?200.328 Financial Reporting and ?200.329 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition ? During the year ended August 31, 2022, the Center received additional EIDL funds. Prior to the COVID-19 pandemic, the Center did not receive and spend federal dollars in excess of the limit that required a single audit to be performed. Due to the lack of expertise surrounding the preparation of the SEFA and the non-recurring nature of the COVID-19 pandemic relief funding provided by the federal government, the Center was uncertain of some of the specifics on the SEFA statement. Cause ? The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect ? Management was unaware that the EIDL was a federal award requiring a single audit prior to discussion with the auditors. Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our testing of the Center?s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Repeat Finding: This is not a repeat finding. Recommendation ? We recommend management attend Federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the Federal funds are reported accurately on the SEFA and that programs are reported under the correct assistance listing number. Views of Responsible Officials ? Beck Center for the Arts concurs with the finding and the recommendation. The Center will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. The Center?s corrective action plan is described in Managements Corrective Action Plan included at page 42 of this reporting package.
2022-003 ? Formal Policies for Federal Awards Information on the Federal Program: U.S. Small Business Administration Assistance Listing Number: 59.008 Assistance Listing Name: Economic Injury Disaster Loan Criteria ? The Code of Federal Regulation (CFR) Section ?200.300 and Section ?200.400 states in part: (1) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. (2) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. (3) The non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award. (4) The application of these cost principles should require no significant changes in the internal accounting policies and practices of the non-Federal entity. However, the accounting practices of the non-Federal entity must be consistent with these cost principles and support the accumulation of costs as required by the principles, and must provide for adequate documentation to support costs charged to the Federal award. (5) In reviewing, negotiating and approving cost allocation plans or indirect cost proposals, the cognizant agency for indirect costs should generally assure that the non-Federal entity is applying these cost accounting principles on a consistent basis during their review and negotiation of indirect cost proposals. Where wide variations exist in the treatment of a given cost item by the non-Federal entity, the reasonableness and equity of such treatments should be fully considered. See the definition of indirect (facilities & administrative (F&A)) costs in ? 200.1 of this part. (6) For non-Federal entities that educate and engage students in research, the dual role of students as both trainees and employees (including pre- and post-doctoral staff) contributing to the completion of Federal awards for research must be recognized in the application of these principles. (7) The non-Federal entity may not earn or keep any profit resulting from Federal financial assistance, unless explicitly authorized by the terms and conditions of the Federal award. Condition ? During the year ended August 31, 2022, the Center received additional EIDL funds. Prior to the COVID-19 pandemic, the Center did not receive and spend federal dollars in excess of the limit that require a single audit to be performed. Due to the lack of expertise surrounding controls on Federal awards, the Center did not adopt and approve written policies surrounding Federal awards. Cause ? The written policies over Federal awards were not established during fiscal year 2022 and therefore the Center was not in compliance with CFR Section ?200.300 and Section ?200.400. Effect ? The Center was not able to provide written policies as required by CFR Section ?200.300 and Section ?200.400. Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our testing of the Center?s major program. The nature of this finding is detailed in the condition section above. Repeat Finding: This is not a repeat finding. Recommendation ? We recommend management attend federal award trainings to ensure the documented policies and procedures can be performed as necessary. This will ensure the Center is in compliance with compliance requirements surrounding Federal awards. Views of Responsible Officials ? Beck Center for the Arts concurs with the finding and the recommendation. Management with the Center?s Audit Committee will review and document policies and procedures for managing federal awards to supplement existing policies and procedures associated with awards from non-federal funders. The Center?s corrective action plan is described in Managements Corrective Action Plan included at page 42 of this reporting package.
2022-004 ? Special Tests and Provisions Information on the Federal Program: U.S. Small Business Administration Assistance Listing Number: 59.008 Assistance Listing Name: Economic Injury Disaster Loan Criteria ? Per the Economic Injury Disaster Loan agreement, the Center is required to furnish to the Small Business Administration, not later than 3 months following the expiration of the Borrower?s fiscal year and in such forms as SBA may require, Borrower?s financial statements. Condition ? During the testing of special test and provisions, we noted an exception relating to the ability of management to provide support for sending the SBA the financial statements within 3 months following August 31, 2022. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence providing SBA the required financial statements subsequent to fiscal year end, as required by agreement. Effect ? An ineffective control system related to ensuring all required support is provided to the SBA on a timely basis can lead to noncompliance with law and regulations and possible loss of funding for the related program. Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our testing of the Center?s major program. The nature of this finding is detailed in the condition section above. Repeat Finding: This is not a repeat finding. Recommendation ? We recommend the Center develop a policy and procedures to ensure that all required special tests and provisions specified by the SBA are adopted and followed. We further recommend that management review its policies and procedures on a regular and ongoing basis related to federal awards to ensure they are appropriate given the various awards. Views of Responsible Officials ? Beck Center for the Arts concurs with the finding and the recommendation. The finance/accounting department will fully review its controls and procedures for identifying and complying with special tests and provisions associated with various awards with guidance and approval from the Audit Committee. The Center?s corrective action plan is described in Managements Corrective Action Plan included at page 42 of this reporting package.
2022-002 ? Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Information on the Federal Program: U.S. Small Business Administration Assistance Listing Number: 59.008 Assistance Listing Name: Economic Injury Disaster Loan Criteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section ?200.502 Basis for determining Federal awards expended.? The schedule must provide total Federal awards expended for each individual Federal program. In accordance with ?200.302 Financial Management, a non-federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?200.328 Financial Reporting and ?200.329 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition ? During the year ended August 31, 2022, the Center received additional EIDL funds. Prior to the COVID-19 pandemic, the Center did not receive and spend federal dollars in excess of the limit that required a single audit to be performed. Due to the lack of expertise surrounding the preparation of the SEFA and the non-recurring nature of the COVID-19 pandemic relief funding provided by the federal government, the Center was uncertain of some of the specifics on the SEFA statement. Cause ? The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect ? Management was unaware that the EIDL was a federal award requiring a single audit prior to discussion with the auditors. Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our testing of the Center?s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Repeat Finding: This is not a repeat finding. Recommendation ? We recommend management attend Federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the Federal funds are reported accurately on the SEFA and that programs are reported under the correct assistance listing number. Views of Responsible Officials ? Beck Center for the Arts concurs with the finding and the recommendation. The Center will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. The Center?s corrective action plan is described in Managements Corrective Action Plan included at page 42 of this reporting package.
2022-003 ? Formal Policies for Federal Awards Information on the Federal Program: U.S. Small Business Administration Assistance Listing Number: 59.008 Assistance Listing Name: Economic Injury Disaster Loan Criteria ? The Code of Federal Regulation (CFR) Section ?200.300 and Section ?200.400 states in part: (1) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. (2) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. (3) The non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award. (4) The application of these cost principles should require no significant changes in the internal accounting policies and practices of the non-Federal entity. However, the accounting practices of the non-Federal entity must be consistent with these cost principles and support the accumulation of costs as required by the principles, and must provide for adequate documentation to support costs charged to the Federal award. (5) In reviewing, negotiating and approving cost allocation plans or indirect cost proposals, the cognizant agency for indirect costs should generally assure that the non-Federal entity is applying these cost accounting principles on a consistent basis during their review and negotiation of indirect cost proposals. Where wide variations exist in the treatment of a given cost item by the non-Federal entity, the reasonableness and equity of such treatments should be fully considered. See the definition of indirect (facilities & administrative (F&A)) costs in ? 200.1 of this part. (6) For non-Federal entities that educate and engage students in research, the dual role of students as both trainees and employees (including pre- and post-doctoral staff) contributing to the completion of Federal awards for research must be recognized in the application of these principles. (7) The non-Federal entity may not earn or keep any profit resulting from Federal financial assistance, unless explicitly authorized by the terms and conditions of the Federal award. Condition ? During the year ended August 31, 2022, the Center received additional EIDL funds. Prior to the COVID-19 pandemic, the Center did not receive and spend federal dollars in excess of the limit that require a single audit to be performed. Due to the lack of expertise surrounding controls on Federal awards, the Center did not adopt and approve written policies surrounding Federal awards. Cause ? The written policies over Federal awards were not established during fiscal year 2022 and therefore the Center was not in compliance with CFR Section ?200.300 and Section ?200.400. Effect ? The Center was not able to provide written policies as required by CFR Section ?200.300 and Section ?200.400. Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our testing of the Center?s major program. The nature of this finding is detailed in the condition section above. Repeat Finding: This is not a repeat finding. Recommendation ? We recommend management attend federal award trainings to ensure the documented policies and procedures can be performed as necessary. This will ensure the Center is in compliance with compliance requirements surrounding Federal awards. Views of Responsible Officials ? Beck Center for the Arts concurs with the finding and the recommendation. Management with the Center?s Audit Committee will review and document policies and procedures for managing federal awards to supplement existing policies and procedures associated with awards from non-federal funders. The Center?s corrective action plan is described in Managements Corrective Action Plan included at page 42 of this reporting package.
2022-004 ? Special Tests and Provisions Information on the Federal Program: U.S. Small Business Administration Assistance Listing Number: 59.008 Assistance Listing Name: Economic Injury Disaster Loan Criteria ? Per the Economic Injury Disaster Loan agreement, the Center is required to furnish to the Small Business Administration, not later than 3 months following the expiration of the Borrower?s fiscal year and in such forms as SBA may require, Borrower?s financial statements. Condition ? During the testing of special test and provisions, we noted an exception relating to the ability of management to provide support for sending the SBA the financial statements within 3 months following August 31, 2022. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence providing SBA the required financial statements subsequent to fiscal year end, as required by agreement. Effect ? An ineffective control system related to ensuring all required support is provided to the SBA on a timely basis can lead to noncompliance with law and regulations and possible loss of funding for the related program. Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our testing of the Center?s major program. The nature of this finding is detailed in the condition section above. Repeat Finding: This is not a repeat finding. Recommendation ? We recommend the Center develop a policy and procedures to ensure that all required special tests and provisions specified by the SBA are adopted and followed. We further recommend that management review its policies and procedures on a regular and ongoing basis related to federal awards to ensure they are appropriate given the various awards. Views of Responsible Officials ? Beck Center for the Arts concurs with the finding and the recommendation. The finance/accounting department will fully review its controls and procedures for identifying and complying with special tests and provisions associated with various awards with guidance and approval from the Audit Committee. The Center?s corrective action plan is described in Managements Corrective Action Plan included at page 42 of this reporting package.