2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Finding 2022-002 ? Allocation of Costs Based on Estimates Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? Uniform guidance cost principals require that amounts charged to federal grants be based on actual costs. These can be estimated allocations, but the estimates must be based on actual current information. The regulations specify that budget estimates may be used for interim accounting purposes, provided that they are later trued up to actuals. Condition ? Agate?s current method of charging indirect costs, which consist of administrative, development, facility use and meal costs, to grants, is based on allocating budgeted costs. During 2022, these costs were not adjusted to match actual costs incurred. Agate did not true up these budgeted costs to actual during the year as required. The dollar value effect of this is difficult to determine. Cause ? Due to turnover in the finance department, the true up of these costs was not performed as requires in the financial policies. Also due to other turnover and program changes, the variances from budget to actual were more significant than they have been in the past. The meals costs allocations were new this year due to changes caused by the merger with House of Charities. Effect ? Some of the programs and related federal grants may have been overcharged. Recommendations ? Agate should review their policies for allocating these costs and apply allocations during the year that are based on actual costs rather than budgeted, or implement a process to true up allocated costs periodically during the year. Based on current grant periods, we recommend at least quarterly reconciliations to avoid overcharging a grant which has closed. Auditee's comments and response ? Agate is aware of the Uniform guidance regulations and will follow them in the future. The Director of Finance has implemented changes to allow for adjustments to actual periodically throughout the fiscal year and at year end to accurately account for the distribution of allocations based on actual costs. Additionally, a new accounting system that includes a module to allocate indirect costs was implemented in fiscal year 2023. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-001 Audit Adjustments and Oversight of the Financial Reporting Process Material Weaknesses Criteria ? Nonprofit organizations are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Management is responsible for establishing and maintaining internal controls, including monitoring, for the fair presentation in the consolidated financial statements including the notes to consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America. Condition ? During the audit for the year ended June 30, 2022, 5 audit adjustments were made that, in the aggregate, were material to the financial statements. The entries were to correct the recording the House of Charities beginning of year balances. Net assets were adjusted by approximately $800,000. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. The need for us to record significant audit adjustments indicates a break down in the internal controls related to preparing the Agate?s financial statements which we consider a material weakness because a misstatement of financial statements could occur and not be prevented or detected. Cause ? Turnover in the Finance Director position and increased complexity of accounting due to merging with another nonprofit organization contributed to the misstatements. Effect ? A material misstatement of the financial statements could occur and not be prevented or detected. Recommendation ? We recommend management develop and implement a financial statement review and approval process to ensure that necessary adjustments and reconciliations are performed for the consolidated financial statements. Auditee's comments and response ? Agate hired a new Finance Director during the year who was learning the intricacies of the Organization through year-end. During this she discovered that the entries from the merger were missing but did not have all the necessary information to adjust the financials. By the end of the audit, she had a thorough understanding of the Organization and is aware of what adjustments need to be made going forward. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No