Finding Reference #: 2023-001 Description of Finding: Significant Deficiency in Internal Controls over Compliance. Identification of the Federal Program: U.S. Department of Health and Human Services; ALN 93.268 Criteria or Specific Requirement: Recipients of federal awards must establish internal co...
Finding Reference #: 2023-001 Description of Finding: Significant Deficiency in Internal Controls over Compliance. Identification of the Federal Program: U.S. Department of Health and Human Services; ALN 93.268 Criteria or Specific Requirement: Recipients of federal awards must establish internal controls over reports that are prepared and submitted. Finding/Condition: Pursuant to the reporting requirement set forth by the Department of Health and Human Services, the Organization is required to submit the single audit to the Federal Audit Clearinghouse within the sooner of 30 days of the issuance of the audit report or nine months after the end of the Organization’s fiscal year. During our reporting period, the audit was not completed and filed timely. Corrective Action: As of FY2023, the Organization has continued to build on the financial and operational restructuring initiated in early 2023. With a stabilized leadership team and an experienced finance staff in place, the Organization has made significant strides in strengthening its internal controls, audit preparedness, and compliance oversight. Despite these improvements, the FY2023 Single Audit was not submitted within the required timeframe due to overlapping audit cycles and the residual impact of resource constraints during the prior year. In response, the Organization has implemented a formalized audit calendar with internal deadlines and check-ins to track progress across key milestones. It has also enhanced existing monthly financial close procedures to better support audit readiness and year-end reporting, while increasing coordination with its external auditors to streamline engagement and scheduling of fieldwork. These steps are intended to ensure timely submission of all future audits. The Organization is currently finalizing the FY2023 Single Audit and is on track to submit it by September 30, 2025. Name of Responsible Person: Emogene Nelson, Executive Director 559-485-1416 Projected Completion Date: Completed at time of report. Cause: The audit filing deadline was missed due to a continuation of challenges stemming from the prior year’s audit cycle. The concurrent preparation of both FY2022 and FY2023 Single Audits placed significant pressure on staff capacity and delayed coordination with the external audit firm. Although the finance team had stabilized, the dual workload created procedural bottlenecks that impacted audit readiness and response times. Additionally, internal systems and workflows, while improved, were still being refined to fully support the demands of federal audit compliance. These factors collectively contributed to the delay. The Organization has since implemented process improvements, reinforced staff capacity, and is on track to submit the 2023 Single Audit by September 30, 2025. Questioned Cost: None