FAC Explorer

Audit 46389

FY End
2022-06-30
Total Expended
$6.24M
Findings
2
Programs
5
Organization: Eastern Carolina Human Services Agency, Inc. (NC)
Year: 2022 Accepted: 2023-03-02
Auditor: Jason C Keller CPA PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
47615 2022-001 Material Weakness - A
624057 2022-001 Material Weakness - A

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $3.83M Yes 1
93.569 Community Services Block Grant $2.07M - 0
14.879 Mainstream Vouchers $292,895 Yes 0
14.896 Family Self-Sufficiency Program $39,717 - 0
14.218 Community Development Block Grants/entitlement Grants $11,474 - 0

Contacts

Name Title Type
G8NHQJP83Q76 Trudy Murray Auditee
9103472151 Jason Keller Auditor
No contacts on file

Notes to SEFA

Accounting Policies: Basis of Presentation:The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activityof Eastern Carolina Human Services Agency Inc. under programs of the federal government for the year endedJune 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portionof the operations of Eastern Carolina Human Services Agency Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.Summary of Significant Accounting Policies:Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures arerecognized following the cost principles contained in the Uniform Guidance, wherein certain types of expendituresare not allowable or are limited as to reimbursement. Eastern Carolina Human Services Agency, Inc. has electednot to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate.

Finding Details

Finding 2022-001
Finding 2022-001 Material Weakness Criteria: Management should have a system in place to reduce the likelihood of errors in financial reporting and to ensure the safeguarding of assets. Condition: Controls over the vendor payment process was not properly followed. Cause: The Organization experienced high turnover in the finance department resulting in a failure to safeguard program assets. Effect: The result of the vendor process being circumvented allowed a malicious actor to gain electronic access to the checking account for the Section 8 Housing Choice Vouchers program and implement $56,944 of unreimbursed fraudulent disbursements from the account. Questioned Costs: $56,944 Recommendation: The Organization should monitor the internal controls over the vendor payment process and implement additional procedures for authentication. Views of Responsible Officials and Corrective Action Plan: Management concurs with this finding and will adhere to the Corrective Action Plan in this audit report.
Finding 2022-001
Finding 2022-001 Material Weakness Criteria: Management should have a system in place to reduce the likelihood of errors in financial reporting and to ensure the safeguarding of assets. Condition: Controls over the vendor payment process was not properly followed. Cause: The Organization experienced high turnover in the finance department resulting in a failure to safeguard program assets. Effect: The result of the vendor process being circumvented allowed a malicious actor to gain electronic access to the checking account for the Section 8 Housing Choice Vouchers program and implement $56,944 of unreimbursed fraudulent disbursements from the account. Questioned Costs: $56,944 Recommendation: The Organization should monitor the internal controls over the vendor payment process and implement additional procedures for authentication. Views of Responsible Officials and Corrective Action Plan: Management concurs with this finding and will adhere to the Corrective Action Plan in this audit report.