Audit 7260

Finding 2023-002 Administration for Children and Families Federal Financial Assistance Listing #93.566, 2202SDRCMA, 10/01/2021 – 9/30/2023 Refugee and Entrant Assistance – State Administered Programs Allowable Costs / Costs Principles and Activities Allowed or Unallowed Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Organization is required to have procedures in place to assure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. Condition: One instance identified in which a family was overpaid for a monthly cash assistance payment. Cause: During the check writing process, the amount was mis-keyed for $688 instead of $668 based upon supporting documentation. Effect: The family was overpaid and the Organization over-charged the federal award. Questioned Costs: $20 Context/Sampling: A nonstatistical sample of 24 non-payroll disbursements out of a total of approximately 471 non-payroll disbursements were tested which accounted for $104,148 out of $598,085 of non-payroll disbursements. Repeat Finding from Prior Year: Yes, prior year finding 2022-002. Recommendation: We recommend management review the process over cash assistance payments to ensure accurate amounts are paid to families. View of Responsible Officials: Management is in agreement.

Finding 2023-003 Administration for Children and Families Federal Financial Assistance Listing #93.566, 2001SDRSOC, 10/01/2019 – 9/30/2022 Federal Financial Assistance Listing #93.566, 2201SDRSSS, 10/01/2021 – 9/30/2023 Federal Financial Assistance Listing #93.566, 2202SDRCMA, 10/01/2021 – 9/30/2023 Federal Financial Assistance Listing #93.566, 2301SDRSSS, 10/01/2022 – 9/30/2024 Refugee and Entrant Assistance – State Administered Programs Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 170 establishes requirements for recipients’ reporting of information on subawards as required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA). Condition: We noted the following matters during testing: a) The quarterly report ending December 2022 for fiscal year award 2020 improperly excluded expenditures incurred of $85,000 relating to the Services to Older Refugees set-aside services program. b) The semi-annual ORR6, covering the period of 4/1/2022 – 9/30/2022, was not submitted timely. c) The FFATA report filed for Sioux Falls School District included the incorrect Subaward Obligation/Action Date. Cause: The independent review process over the quarterly report did not identify the improperly excluded expenditures. The ORR6 report was not filed timely by management. Within the FFATA report, the Organization included the grant award end date due to misinterpretation of the required FFATA report information. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility that the Organization would not be in compliance with the federal award as it relates to reporting. Questioned Costs: None reported. Context/Sampling: Included under eight award letters of the federal program, four quarterly federal financial reports (SF-425s) and one quarterly federal financial report (ORR2) were reviewed in the Organization’s fiscal year. In addition, one semi-annual programmatic report was reviewed in the Organization’s fiscal year. A total of 24 reports were filed during the Organization’s fiscal year. The FFATA report for the only subrecipient who received funds through this program was tested. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 1 $ 2 02,559 Not Reported - - Not Timely - - Obligation Incorrect - - Missing Key Elements 1 202,559 Repeat Finding from Prior Years: Yes, prior year finding 2022-003 Recommendation: We recommend that management review internal control procedures over reporting to ensure reports are submitted timely and accurate information is reported. Views of Responsible Officials: Management is in agreement.

Finding 2023-004 Administration for Children and Families Federal Financial Assistance Listing #93.566, 2202SDRCMA, 10/01/2021 – 9/30/2023 Federal Financial Assistance Listing #93.566, 2302SDRCMA, 10/01/2022 – 9/30/2023 Refugee and Entrant Assistance – State Administered Programs Eligibility Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: We noted the following matters during testing which affected 11 participant files; a) Four participant case files were not reviewed through the Organization’s peer review process and two participant case files were not reviewed in a timely manner through the Organization’s peer review process. b) Four instances in which the family’s first month’s prorated cash assistance payment was not properly calculated based upon the date the Cooperative Agreement and Rights and Responsibilities Form was signed by the client. c) One instance in which a family was underpaid based upon their family size and eligibility for the month. d) One instance in which a family was moved from the Refugee Cash Assistance program to another program and the expenses remained to be charged under the Refugee Cash Assistance program. Cause: The Organization experienced staff turnover along with an increase in refugee arrivals during the fiscal year creating an increase in the workload of staff members. In addition, the Organization’s policies and designed controls were not followed. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility that the Organization would provide services to ineligible participants and the Organization would not detect ineligibility in a timely manner. Questioned Costs: $1,005 Context/Sampling: A nonstatistical sample of 35 participant case files out of 153 participant case files were selected for testing which included $83,824 of participant payments out of $353,391. Repeat Finding from Prior Year: Yes, prior year finding 2022-005 Recommendation: We recommend that management review the Organization’s policies, procedures and controls over eligibility with applicable program employees to ensure compliance with the federal program. View of Responsible Officials: Management is in agreement.

Finding 2023-002 Administration for Children and Families Federal Financial Assistance Listing #93.566, 2202SDRCMA, 10/01/2021 – 9/30/2023 Refugee and Entrant Assistance – State Administered Programs Allowable Costs / Costs Principles and Activities Allowed or Unallowed Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Organization is required to have procedures in place to assure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. Condition: One instance identified in which a family was overpaid for a monthly cash assistance payment. Cause: During the check writing process, the amount was mis-keyed for $688 instead of $668 based upon supporting documentation. Effect: The family was overpaid and the Organization over-charged the federal award. Questioned Costs: $20 Context/Sampling: A nonstatistical sample of 24 non-payroll disbursements out of a total of approximately 471 non-payroll disbursements were tested which accounted for $104,148 out of $598,085 of non-payroll disbursements. Repeat Finding from Prior Year: Yes, prior year finding 2022-002. Recommendation: We recommend management review the process over cash assistance payments to ensure accurate amounts are paid to families. View of Responsible Officials: Management is in agreement.

Finding 2023-003 Administration for Children and Families Federal Financial Assistance Listing #93.566, 2001SDRSOC, 10/01/2019 – 9/30/2022 Federal Financial Assistance Listing #93.566, 2201SDRSSS, 10/01/2021 – 9/30/2023 Federal Financial Assistance Listing #93.566, 2202SDRCMA, 10/01/2021 – 9/30/2023 Federal Financial Assistance Listing #93.566, 2301SDRSSS, 10/01/2022 – 9/30/2024 Refugee and Entrant Assistance – State Administered Programs Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 170 establishes requirements for recipients’ reporting of information on subawards as required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA). Condition: We noted the following matters during testing: a) The quarterly report ending December 2022 for fiscal year award 2020 improperly excluded expenditures incurred of $85,000 relating to the Services to Older Refugees set-aside services program. b) The semi-annual ORR6, covering the period of 4/1/2022 – 9/30/2022, was not submitted timely. c) The FFATA report filed for Sioux Falls School District included the incorrect Subaward Obligation/Action Date. Cause: The independent review process over the quarterly report did not identify the improperly excluded expenditures. The ORR6 report was not filed timely by management. Within the FFATA report, the Organization included the grant award end date due to misinterpretation of the required FFATA report information. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility that the Organization would not be in compliance with the federal award as it relates to reporting. Questioned Costs: None reported. Context/Sampling: Included under eight award letters of the federal program, four quarterly federal financial reports (SF-425s) and one quarterly federal financial report (ORR2) were reviewed in the Organization’s fiscal year. In addition, one semi-annual programmatic report was reviewed in the Organization’s fiscal year. A total of 24 reports were filed during the Organization’s fiscal year. The FFATA report for the only subrecipient who received funds through this program was tested. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 1 $ 2 02,559 Not Reported - - Not Timely - - Obligation Incorrect - - Missing Key Elements 1 202,559 Repeat Finding from Prior Years: Yes, prior year finding 2022-003 Recommendation: We recommend that management review internal control procedures over reporting to ensure reports are submitted timely and accurate information is reported. Views of Responsible Officials: Management is in agreement.

Finding 2023-004 Administration for Children and Families Federal Financial Assistance Listing #93.566, 2202SDRCMA, 10/01/2021 – 9/30/2023 Federal Financial Assistance Listing #93.566, 2302SDRCMA, 10/01/2022 – 9/30/2023 Refugee and Entrant Assistance – State Administered Programs Eligibility Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: We noted the following matters during testing which affected 11 participant files; a) Four participant case files were not reviewed through the Organization’s peer review process and two participant case files were not reviewed in a timely manner through the Organization’s peer review process. b) Four instances in which the family’s first month’s prorated cash assistance payment was not properly calculated based upon the date the Cooperative Agreement and Rights and Responsibilities Form was signed by the client. c) One instance in which a family was underpaid based upon their family size and eligibility for the month. d) One instance in which a family was moved from the Refugee Cash Assistance program to another program and the expenses remained to be charged under the Refugee Cash Assistance program. Cause: The Organization experienced staff turnover along with an increase in refugee arrivals during the fiscal year creating an increase in the workload of staff members. In addition, the Organization’s policies and designed controls were not followed. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility that the Organization would provide services to ineligible participants and the Organization would not detect ineligibility in a timely manner. Questioned Costs: $1,005 Context/Sampling: A nonstatistical sample of 35 participant case files out of 153 participant case files were selected for testing which included $83,824 of participant payments out of $353,391. Repeat Finding from Prior Year: Yes, prior year finding 2022-005 Recommendation: We recommend that management review the Organization’s policies, procedures and controls over eligibility with applicable program employees to ensure compliance with the federal program. View of Responsible Officials: Management is in agreement.