Adults? & Children?s Alliance is submitting the following Corrective Action Plan for Significant Deficiency found during audit for FY22 (10/1/2021-09/30/2022) Found in Section II ? Financial Statements Findings 2022-001 ? Lack of Segregation of Accounting Duties (Repeat finding 2021-001) Criteria: P...
Adults? & Children?s Alliance is submitting the following Corrective Action Plan for Significant Deficiency found during audit for FY22 (10/1/2021-09/30/2022) Found in Section II ? Financial Statements Findings 2022-001 ? Lack of Segregation of Accounting Duties (Repeat finding 2021-001) Criteria: Proper internal control structure includes review of journal entries, bank reconciliations and the schedule of expenditures of federal awards, as well as an adequate system for recording and processing entries to the financial statements, in accordance with generally accepted accounting principles. Condition: The limited number of staff in the accounting department results in certain functions that are not properly segregated which normally would enhance internal control, including the lack of review of journal entries, bank reconciliations, and the schedule of expenditures of federal awards. Cause: The internal control structure does not provide an appropriate segregation of duties for the financial reporting process. Effect: Although this condition is not unusual for an entity the size of the Organization, the condition may affect the Organization's ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements. Recommendation: It is the responsibility of management and those charged with governance to determine whether to accept the risk associated with this condition because of cost or other conditions. We recommend the Organization evaluate current procedures and segregate where possible and implement compensating controls.Responsible Official?s Response: Management will evaluate current procedures and segregate where possible and implement compensating/alternative controls appropriately according to staffing and budget. Corrective Actions: ACA will continue to work with Bottom Line Accounting Services when finances do not align Lisa Dunlap, the Executive Director, works with Bottom Line Accounting Services to find resolution. Lisa Dunlap, Sandra Lee the CACFP Director and Denise Hess additional staff will work together for checks and balances for payroll, Quick Books for accounts payable/receivables, journal entries, banking, and CACFP program as well as any other financial activity. Quick books ? data entry Accounts payable Accounts receivable Roles and Responsibilities for Bottom Line Accounting Services Outline best practices for QBO JE?s, Deposits, or other entries for clear tracking. ? Review client posted payroll tax postings. ? Review organizations key transactions and financial statements for previous months ? Create and recommend posting monthly accounting allocations and/or adjustments. ? Assist staff with monthly accounting close and recommend appropriate accounting systems to ? be set up. Review reconciled monthly banking and investment accounts and maintain required ? supporting schedules. Provide QuickBooks online accounting support and QB training requested. ? Perform quarterly reconciliations of designated general ledger accounts. ? Assist clients as requested with preparations of annual audit. ? Recommend modifications to chart of account structure from information provided by client ? to enhance retrieval of necessary financial information. Completion time: On going. Contact person: Lisa Dunlap Lisa.dunlap@acainc.org 651-481-9320 2022-002 - Reporting Information on the SEFA Criteria: 2 CFR Part 200.510(b) states that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements which must include the total federal awardsexpended. Federal program and award identification must include, as applicable, the Assistance Listing Number and title, the federal award identification number and year, the name of the federal agency, and the name of the pass-through entity, if any. This information enables the auditee to reconcile amounts presented in the financial statements to related amounts in the schedule of expenditures of federal awards. Condition: Management did not have a process in place to prepare a complete schedule of expenditures of federal awards, including identifying COVID-19 funding. The audit firm cannot serve as a compensating control. Cause: Proper processes were not in place for management to prepare the schedule of expenditures of federal awards. Potential Effect: As a result of this condition, there is a higher risk that the schedule of expenditures of federal awards could be incomplete or contain errors that are not detected. Recommendation: The Organization should review its policies and procedures to ensure all expenditures charged to federal grants are properly identified, recorded in the general ledger, and reflected on the schedule of expenditures of federal awards. Responsible Official's Response: Management is now aware that Emergency/Covid funds should have been separated by line when reporting even though from the same source, grant and pass-through grant number. Corrective Actions: SEFA The Schedule of Federal Awards report is completed by Lisa Dunlap with review from Bottom Line Accounting Services. Funding strands will be broken out and identified accordingly by funding type, grant number, pass through grant number as well as identified in general ledger with same information. Completion time: On going. Contact person: Lisa Dunlap Lisa.dunlap@acainc.org 651-481-93 202022-003 ? Meal Counts Federal Program: Assistance listing number 10.558, Child and Adult Care Food Program ? United States Department of Agriculture Compliance Requirement: Eligibility Criteria: A properly designed system of internal control over compliance with the requirements of federal programs allows entities to meet those requirements set forth by the federal government. Under the Child and Adult Care Food Program, the Organization is required to monitor eligibility of meals being reimbursed to providers. Condition: 1 of the 40 providers tested for meal counts had discrepancies. The provider's reimbursement improperly included 2 additional breakfast meal counts. Cause: The Organization noted a deduction of a breakfast count should have been made, however rather than deducting another breakfast count was added resulting in 2 additional breakfast meal counts. Questioned Costs: The results of this noncompliance did not result in any questions costs. Potential Effect: As a result of this condition, there is a higher risk that the provider meal counts are inaccurately reimbursed. Recommendation: The Organization should review its policies and procedures to ensure all provider meals charged to federal grants are properly reflected in the reimbursement request. Responsible Official's Response: This was a human error; management will continue to follow policy and procedures in place to ensure all meals charged to the federal grant are properly reflected in the reimbursement request. Corrective Actions: The 1/40 provider meal count finding was human error. Management will continue to follow the policies and procedures set in place to ensure all meals charged to federal grants are properly reflected in the reimbursement request. Completion time: On going. Contact person: Lisa Dunlap Lisa.dunlap@acainc.org 651-481-9320