Finding 2024-004 | Untimely Submission of Single Audit Reporting Package Noncompliance | Repeat Finding | Third Consecutive Year (2022-001, 2023-006, 2024-004) | 2 CFR §200.512(a) Finding Number: 2024-004 Planned Completion Date: June 30, 2026 (FY2025 single audit submitted to FAC on or before this ...
Finding 2024-004 | Untimely Submission of Single Audit Reporting Package Noncompliance | Repeat Finding | Third Consecutive Year (2022-001, 2023-006, 2024-004) | 2 CFR §200.512(a) Finding Number: 2024-004 Planned Completion Date: June 30, 2026 (FY2025 single audit submitted to FAC on or before this date) Responsible Official(s): Josafat Saldivar, Finance Director (primary); Juan E. Rodriguez, Executive Director (oversight and Board reporting) Agency Response: STDC acknowledges the finding and concurs that the Single Audit reporting package for the fiscal year ended September 30, 2024 was not submitted to the Federal Audit Clearinghouse (FAC) by the required deadline of June 30, 2025, under 2 CFR §200.512(a). STDC recognizes that this represents the third consecutive year in which the single audit has been submitted late, following Finding 2022-001 and Finding 2023-006, and takes seriously the compliance obligation and the operational risks associated with continued noncompliance with the submission deadline. The late submissions across FY2022, FY2023, and FY2024 are the direct result of a series of compounding operational disruptions originating with the Council's transition to a new accounting system in January 2022, further complicated by a ransomware attack in November 2023. Management provides the following chronological context to demonstrate the depth and duration of the disruptions that collectively prevented timely audit completion across three consecutive fiscal years: Accounting System Transition (2021-2022): In March 2021, following a six-month procurement process, STDC contracted with Lance, Soil & Lunghard, LLP (LSL, LLP), an authorized AccuFund reseller, to implement AccuFund as its new accounting platform. The go-live date was delayed from October 1, 2021 to January 1, 2022 to allow the Board of Directors to approve related payroll and operational changes. When the system launched on January 1, 2022, critical components — including the fringe benefit and indirect cost allocation pools, timesheet approvals, budget, requisitions, funding reports, and travel modules — had not been configured. Transaction history and beginning balances were imported incorrectly. Work with LSL, LLP concluded in September 2022 without resolution of these deficiencies. AccuFund Remediation (2022-2023): Beginning in October 2022, STDC engaged AccuFund directly to identify and correct the configuration deficiencies. In February 2023, AccuFund assigned a Senior Consultant to the engagement. Between March and October 2023, the Consultant worked with STDC to configure the fringe benefit and indirect cost pools, reconfigure payroll, and correct the transaction history and trial balances that had been incorrectly imported during the original implementation. This remediation work was still ongoing at the time of the ransomware attack. Ransomware Attack and Recovery (November 2023 – September 2024): On November 4, 2023, STDC suffered a ransomware attack that compromised the SQL database housing all AccuFund financial data. Following recovery efforts, STDC migrated to AccuFund Anywhere, a cloud-hosted version of the platform, and regained system access in late December 2023. Between January and March 2024, staff manually re-entered transaction data that had been processed offline during the system outage. Between April and September 2024, STDC continued working with the AccuFund Senior Consultant to finalize system configurations and correct remaining beginning balance and transaction history issues — many of which dated back to the original 2022 implementation errors. Sequential Audit Completion (2024-2026): The cumulative effect of these disruptions required STDC to complete three fiscal year audits in sequence rather than on schedule. The FY2022 audit was completed in December 2024 and submitted to the FAC, with a revised submission in January 2025 following an HHSC review that identified a misclassification of assistance listing number balances. The FY2023 audit was completed and submitted to the FAC in July 2025. Work on the FY2024 audit commenced in August 2025 and is being finalized for Board approval on March 26, 2026, with FAC submission to follow immediately. The FY2025 fiscal year ended September 30, 2025, and STDC is actively preparing for that audit with a target FAC submission date of June 30, 2026. Management acknowledges that the cumulative nature of these disruptions resulted in a multi-year audit backlog that could not be resolved within the annual submission deadlines. STDC is committed to breaking this cycle. With the AccuFund system now stable, the cloud migration complete, and three years of corrected financial records in place, STDC has the accounting infrastructure necessary to support timely audit completion going forward. The corrective actions below reflect the specific steps being taken to achieve the June 30, 2026 FY2025 submission target and to prevent recurrence in future years. Note: Because the FY2025 fiscal year ended September 30, 2025 and the FY2024 audit is being finalized concurrently, several of the steps below are already underway as of the date of this report (March 2026). Target dates reflect the current accelerated timeline required to achieve FAC submission by June 30, 2026. Corrective Actions to Be Implemented: Action 1 (Target: In progress — April 15, 2026): FY2025 Audit Preparation Timeline — A compressed audit preparation schedule has been established for the FY2025 audit (year ended September 30, 2025) with the following key milestones: final trial balance and year-end reconciliations delivered to the auditor by April 15, 2026; draft financial statements completed by the auditor by May 31, 2026; management review and final adjustments completed by June 10, 2026; final audit report issued by the auditor and reviewed and approved by the STDC Board of Directors by June 25, 2026; and submission of the complete reporting package to the Federal Audit Clearinghouse by June 30, 2026. Action 2 (Target: In progress — March 31, 2026): Auditor Engagement — FY2025 — De La Garza CPA Firm, P.C. has been engaged for the FY2025 audit. Fieldwork scheduling and document request lists are being coordinated to ensure the auditor can begin and complete work within the compressed timeline. STDC will provide all requested documentation on a priority basis to avoid delays in fieldwork. Action 3 (Targets: March 26, 2026; April 22, 2026; June 25, 2026): Board Reporting — The Executive Director will present audit status to the Board of Directors at the March 26, 2026 board meeting and at each subsequent board meeting. The June 30, 2026 FAC submission target will be tracked as a standing Board-level performance objective with final review and approval of the FY2025 audit report by the Board of Directors targeted for June 25, 2026. Action 4 (Target: July 31, 2026): FY2026 Audit Preparation Timeline — Upon submission of the FY2025 audit, STDC will immediately follow its formal written audit preparation timeline for the FY2026 audit (year ended September 30, 2026), with milestone dates beginning at fiscal year-end and targeting FAC submission by June 30, 2027. The timeline will be modeled on the Single Audit Submission Timeline Protocol adopted under Findings 2022-001 and 2023-006 and approved by the Executive Director. Monitoring and Evaluation: The Finance Director will maintain a running audit preparation status log updated weekly through June 30, 2026, and monthly thereafter. The Executive Director will report audit status to the Board of Directors at each meeting. The immediate target outcome is submission of the FY2025 single audit reporting package to the Federal Audit Clearinghouse on or before June 30, 2026. Achievement of this milestone will demonstrate STDC's return to timely compliance and is expected to support removal of the high-risk auditee designation in the FY2025 audit cycle.