Non-Compliance - Reporting Criteria: 2 CFR section 200.329 Requires certain program performance reports to be filed on a timely basis. Condition: Insufficient controls over performance reporting resulted in program performance reports not being timely filed by the Organization. Context/Cause: The Organization receives federal funding through a passthrough agency, the Alabama Department of Mental Health. In accordance with the contract with the Alabama Department of Mental Health, certain performance reports are required to be filed on a quarterly basis by the 10th of the month following the quarter end. Effects: Due to the resignation of the personnel responsible for filing the required reports, and management’s lack of control over the reporting process, the reports were not timely filed. Recommendation: We recommend that management and the board oversee the reporting function so that issues arising with personnel do not prevent the timely filing of the reports. Auditee’s Response: The Organization will cross train staff and create a schedule for the filing of reports on a timely basis and will monitor this more closely in future.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS AND CORRECTIVE ACTION PLAN Federal Award Finding September 30, 2024 Comment #2024-002 Repeat Comment #2023-001 AND #2022-001 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED LIHEAP FALN 93.568 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary, that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The close-out process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to properly present the financial statements and disclosures of the Council as of September 30, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, reports to various funding sources, etc.) Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner. The systemic cause appears to be the untimely termination of key personnel and a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and 200.329 Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. SCHEDULE OF FINDINGS AND QUESTIONED COSTS AND CORRECTIVE ACTION PLAN Federal Award Finding September 30, 2024 Comment #2024-002 Repeat Comment #2023-001 AND #2022-001 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED LIHEAP FALN 93.568 (Questioned Costs - Undetermined) (Continued) Effect: Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff and limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency is determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Council has hired a new fiscal officer and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. The Board of Directors should be adequately trained in the areas of understanding risk assessment and financial awareness in the community action industry. A finance and audit committee should be established and trained in understanding and oversight of financial reporting responsibilities of community action associations. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Council’s financial funding sources, the Council will provide additional training to support the new fiscal officer. The fiscal officer will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. All enhancements will be implemented by July 31, 2025.
Finding No.: 2024-015 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Reporting Questioned Costs: $0 Criteria: 2 CFR 200.302(a) states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 300.302(b) states that recipient’s financial management system must provide for the following: 1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. 2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in 2 CFR 200.328 and 200.329. 3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. 2 CFR 200.328(c) states that recipient must submit financial reports as required by the Federal award. Condition: Bureau of Budget and Management Research (BBMR) was unable to provide a complete listing of financial reports required to be submitted for each of grant awards effective during the fiscal year. Finding No.: 2024-015, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Reporting Questioned Costs: $0 Cause: BBMR did not maintain an internal monitoring of financial reports required to be submitted for each of grant awards effective during the fiscal year and did not ensure compliance with applicable reporting requirements. Effect: We are unable to determine compliance with applicable reporting requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: 2023-013 Recommendation: BBMR management should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain a monitoring of financial reports required to be submitted for each of grant awards effective during the fiscal year. Views of Responsible Officials: BBMR will work with DOA to keep soft copies of submitted and approved Federal Financial Reports (FFR) on hand.
Finding No.: 2024-020 Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, GovGuam is required to submit quarterly performance report, specifically, ERA Compliance Report (PRA 1505-0270 (ERA 2)). 2 CFR 200.329(a) states that recipient is responsible for the oversight of the Federal award. The recipient must monitor its activities under Federal awards to ensure it is compliant with all requirements and meeting performance expectations. Monitoring by the recipient must cover each program, function, or activity. 2 CFR 329(c)(1) states that recipient must submit performance reports as required by the Federal award. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Grant award terms and conditions state that records shall be maintained by recipient for a period of five years after the period of performance. Condition: For four (or 100%) of four reports tested, records that accumulate and summarize reported data/ key line items such as 1) Administrative Costs Ratio; and 2) Housing Stability Services Ratio were not provided for the following: See the Notes to the SEFA for chart/table. Cause: The Department of Administration (DOA) lacks established internal control policies and procedures relating to proper turn-over of documents. DOA was unable to provide sufficient supporting records to substantiate the reported data/ key line items due to closure of the program during the fiscal year and expiration of employment contract of personnel responsible for compliance with reporting requirements. Additionally, DOA did not maintain records for a period of five years after the period of performance. Finding No.: 2024-020, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Reporting Questioned Costs: $0 Effect: We are unable to verify accuracy of reported data/ key line items. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: 2023-014 Recommendation: DOA management should establish internal control policies and procedures over retention of grant-related documents after period of performance for a period specified by the grant terms and conditions. Views of Responsible Officials: The Agency disagrees with this finding. Please refer to a letter dated March 31, 2026, regarding Reports on Compliance September 30, 2024. Auditor’s Response: Our finding remains because we were unable to determine compliance with applicable requirements.
Finding No.: 2024-024 Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, GovGuam is required to submit quarterly financial report (PRA 1505-0269-Quarterly) and annual performance report (PRA 1505-0269). 2 CFR 200.302(a) states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 300.302(b) states that recipient’s financial management system must provide for the following: 1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. 2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in 2 CFR 200.328 and 200.329. 3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. 2 CFR 200.329(a) states that recipient is responsible for the oversight of the Federal award. The recipient must monitor its activities under Federal awards to ensure it is compliant with all requirements and meeting performance expectations. Monitoring by the recipient must cover each program, function, or activity. Finding No.: 2024-024, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Reporting Questioned Costs: $0 Criteria, continued: Per Homeowner Assistance Fund: Annual Report User Guide October 14, 2022 (Updated October 15, 2025), the annual report required to be submitted during fiscal year 2024 is the annual report with period covered October 1, 2022 through September 30, 2023, which is required to be submitted on or before November 15, 2023. Conditions: 1. For three (or 75%) of four financial reports tested, expenditures reported in the quarterly reports differ from amounts per underlying accounting records and no reconciliation was provided to explain the identified variances, as follows: See the Notes to the SEFA for chart/table. 2. For four (or 100%) of four financial reports tested, records that accumulate and summarize reported data/ key line items such as 1) Administrative Expenses; and 2) Services, Counseling & Education were not provided. 3. The annual report with period covered October 1, 2022 through September 30, 2023, which was required to be submitted on or before November 15, 2023 was not provided. Cause: The Department of Administration (DOA) lacks established internal control policies and procedures relating to proper turn-over of documents. DOA was unable to: 1) provide reconciliation to explain the identified variances; 2) provide sufficient supporting records to substantiate the reported data/ key line items; and 3) unable to provide a copy of the annual report. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2024-024, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Reporting Questioned Costs: $0 Identification as a Repeat Finding: 2023-016 Recommendation: DOA management should establish internal control policies and procedures over retention of grant-related documents after period of performance for a period specified by the grant terms and conditions. Responsible personnel should review underlying accounting records and perform reconciliation of the required reports. Views of Responsible Officials: The Agency is reviewing its federal grants management to ensure robust handover and succession plans are in place of future programs.
Finding No.: 2024-052 Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award No.: Various Area: Reporting Questioned Costs: $0 Criteria: 2 CFR 200.302(a) states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 300.302(b) states that recipient’s financial management system must provide for the following: 1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. 2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in 2 CFR 200.328 and 200.329. 3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. 2 CFR 200.328(c) states that recipient must submit financial reports as required by the Federal award. Conditions: 1. We are unable to establish a complete list of financial reports required to be submitted during the fiscal year as Guam Homeland Security (GHS) was unable to provide copies of each grant award. GHS was unable to demonstrate that the financial reports submitted to our audit team consisted of all the required reports. Finding No.: 2024-052, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award No.: Various Area: Reporting Questioned Costs: $0 Conditions, continued: 2. From the list of reports submitted to our audit team, for eight (or 100%) of eight reports tested, records that accumulate and summarize reported data such as 1) cash receipts; 2) cash disbursements; and 3) federal share of expenditures, were not provided for the following: See the Notes to the SEFA for chart/table. Cause: Department of Administration (DOA) assigned GHS as the agency responsible for providing required audit documentation, however, GHS did not provide timely responses to the audit team’s requests. GHS could not identify the personnel responsible for compliance with applicable reporting requirements. Effect: We are unable to determine compliance with applicable reporting requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: GHS management should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain a monitoring of financial reports required to be submitted for each grant award effective during the fiscal year. Finding No.: 2024-052, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award No.: Various Area: Reporting Questioned Costs: $0 Views of Responsible Officials: GHS will work with DOA to make sure reports are submitted on time. GHS will also retain documentation of submitted reports.
Finding Number 2024-072 Prior Year Finding Number: 2023-055 Compliance Requirement: Reporting Program: U.S. Department of Education Government Department/Agency: Department of Education (VIDE) Consolidated Grant to the Outlying Areas ALN: 84.403A Award #: Various Award Period: Various Criteria – The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish, document, and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. For Reporting, each State or Territory must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Per 2 CFR Section 200.329, Submitting performance reports - (1) The recipient or subrecipient must submit performance reports as required by the Federal award. Intervals must be no less frequent than annually nor more frequent than quarterly except if specific conditions are applied (See § 200.208). Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal agency or pass-through entity may require annual reports before the anniversary dates of multiple-year Federal awards. The final performance report submitted by the recipient must be due no later than 120 calendar days after the period of performance. A subrecipient must submit a final performance report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any performance report with justification from the recipient or subrecipient. As applicable, performance reports should contain information on the following: (i) A comparison of accomplishments to the objectives of the Federal award established for the reporting period (for example, comparing costs to units of accomplishment). Where performance trend data and analysis would be informative to the Federal agency program, the Federal agency should include this as a performance reporting requirement. (ii) Explanations on why established goals or objectives were not met; and (iii) Additional information, analysis, and explanation of cost overruns or higher-than-expected unit costs. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition – We noted the following: • For Performance Reporting, 1 annual report contained amounts that did not agree with the supporting documentation, and annual reports were not prepared and submitted as required for 4 grant awards. • For FFATA Reporting, VIDE failed to submit subaward data to fulfill the Transparency Act reporting requirements for the first tier subawards of $30,000 or more. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the reporting compliance requirements. Cause – It appears that policies and procedures, including review over reporting procedures, were not functioning as intended. Effect or Potential Effect – VIDE is not in compliance with reporting requirements as it failed to provide evidence of identifying and reporting Transparency Act reporting requirements. Questioned Costs – None. Context – This is a condition noted per review of VIDE’s compliance with reporting requirements. In fiscal year 2024, VIDE passed through approximately $472,820 to 4 subrecipients. Recommendation – We recommend that VIDE implement policies, procedures and controls that will comply with all required laws, guidelines, and requirements under the award. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. VIDE plans to address the audit finding on reporting by developing detailed reporting policies and procedures. These will include guidelines for identifying and tracking subawards, collecting required data, and setting submission timelines. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Transportation Federal Program Title: Airport Improvement program ALN: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 3-48-SBGP-147-2022 September 14, 2022 – September 13, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Department of Transportation (TXDOT): Establish and maintain effective internal control over the Federal award that provides reasonable assurance that TXDOT is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of five SF-425, Federal Financial Reports submitted during the fiscal year. For the SF-425 report for the 3-48-SBGP-147-2022 grant award submitted on March 6, 2024, we noted TXDOT did not report the recipient share of expenditures required. The recipient share of expenditures was incurred for the project; however, they were inadvertently omitted from the report. Questioned costs: None Context: See “Condition.” Cause: TXDOT prepares financial reports based on expenditures reported in its Peoplesoft system. The project for grant 3-48-SBGP-147-2022 was set up as 100% federal as the match was being met by the subrecipient. As such, TXDOT was reimbursing the subrecipient at 100% while the subrecipient met the 10% match with local funds. Accordingly, the matching funds, as incurred by the subrecipient, were not considered when preparing and reviewing the SF-425 report. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No Recommendation: We recommend management enhance its internal controls over the review and approval of the SF-425 reports to include a review of the grant award to ensure the subrecipient share of expenditures are reported properly reported. Views of responsible officials: TxDOT AVN agrees with this finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Transportation Federal Program Title: Airport Improvement program ALN: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 3-48-SBGP-147-2022 September 14, 2022 – September 13, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Department of Transportation (TXDOT): Establish and maintain effective internal control over the Federal award that provides reasonable assurance that TXDOT is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of five SF-425, Federal Financial Reports submitted during the fiscal year. For the SF-425 report for the 3-48-SBGP-147-2022 grant award submitted on March 6, 2024, we noted TXDOT did not report the recipient share of expenditures required. The recipient share of expenditures was incurred for the project; however, they were inadvertently omitted from the report. Questioned costs: None Context: See “Condition.” Cause: TXDOT prepares financial reports based on expenditures reported in its Peoplesoft system. The project for grant 3-48-SBGP-147-2022 was set up as 100% federal as the match was being met by the subrecipient. As such, TXDOT was reimbursing the subrecipient at 100% while the subrecipient met the 10% match with local funds. Accordingly, the matching funds, as incurred by the subrecipient, were not considered when preparing and reviewing the SF-425 report. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No Recommendation: We recommend management enhance its internal controls over the review and approval of the SF-425 reports to include a review of the grant award to ensure the subrecipient share of expenditures are reported properly reported. Views of responsible officials: TxDOT AVN agrees with this finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Transportation Federal Program Title: Airport Improvement program ALN: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 3-48-SBGP-147-2022 September 14, 2022 – September 13, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Department of Transportation (TXDOT): Establish and maintain effective internal control over the Federal award that provides reasonable assurance that TXDOT is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of five SF-425, Federal Financial Reports submitted during the fiscal year. For the SF-425 report for the 3-48-SBGP-147-2022 grant award submitted on March 6, 2024, we noted TXDOT did not report the recipient share of expenditures required. The recipient share of expenditures was incurred for the project; however, they were inadvertently omitted from the report. Questioned costs: None Context: See “Condition.” Cause: TXDOT prepares financial reports based on expenditures reported in its Peoplesoft system. The project for grant 3-48-SBGP-147-2022 was set up as 100% federal as the match was being met by the subrecipient. As such, TXDOT was reimbursing the subrecipient at 100% while the subrecipient met the 10% match with local funds. Accordingly, the matching funds, as incurred by the subrecipient, were not considered when preparing and reviewing the SF-425 report. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No Recommendation: We recommend management enhance its internal controls over the review and approval of the SF-425 reports to include a review of the grant award to ensure the subrecipient share of expenditures are reported properly reported. Views of responsible officials: TxDOT AVN agrees with this finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Transportation Federal Program Title: Airport Improvement program ALN: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 3-48-SBGP-147-2022 September 14, 2022 – September 13, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Department of Transportation (TXDOT): Establish and maintain effective internal control over the Federal award that provides reasonable assurance that TXDOT is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of five SF-425, Federal Financial Reports submitted during the fiscal year. For the SF-425 report for the 3-48-SBGP-147-2022 grant award submitted on March 6, 2024, we noted TXDOT did not report the recipient share of expenditures required. The recipient share of expenditures was incurred for the project; however, they were inadvertently omitted from the report. Questioned costs: None Context: See “Condition.” Cause: TXDOT prepares financial reports based on expenditures reported in its Peoplesoft system. The project for grant 3-48-SBGP-147-2022 was set up as 100% federal as the match was being met by the subrecipient. As such, TXDOT was reimbursing the subrecipient at 100% while the subrecipient met the 10% match with local funds. Accordingly, the matching funds, as incurred by the subrecipient, were not considered when preparing and reviewing the SF-425 report. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No Recommendation: We recommend management enhance its internal controls over the review and approval of the SF-425 reports to include a review of the grant award to ensure the subrecipient share of expenditures are reported properly reported. Views of responsible officials: TxDOT AVN agrees with this finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Transportation Federal Program Title: Airport Improvement program ALN: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 3-48-SBGP-147-2022 September 14, 2022 – September 13, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Department of Transportation (TXDOT): Establish and maintain effective internal control over the Federal award that provides reasonable assurance that TXDOT is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of five SF-425, Federal Financial Reports submitted during the fiscal year. For the SF-425 report for the 3-48-SBGP-147-2022 grant award submitted on March 6, 2024, we noted TXDOT did not report the recipient share of expenditures required. The recipient share of expenditures was incurred for the project; however, they were inadvertently omitted from the report. Questioned costs: None Context: See “Condition.” Cause: TXDOT prepares financial reports based on expenditures reported in its Peoplesoft system. The project for grant 3-48-SBGP-147-2022 was set up as 100% federal as the match was being met by the subrecipient. As such, TXDOT was reimbursing the subrecipient at 100% while the subrecipient met the 10% match with local funds. Accordingly, the matching funds, as incurred by the subrecipient, were not considered when preparing and reviewing the SF-425 report. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No Recommendation: We recommend management enhance its internal controls over the review and approval of the SF-425 reports to include a review of the grant award to ensure the subrecipient share of expenditures are reported properly reported. Views of responsible officials: TxDOT AVN agrees with this finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Transportation Federal Program Title: Airport Improvement program ALN: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 3-48-SBGP-147-2022 September 14, 2022 – September 13, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Department of Transportation (TXDOT): Establish and maintain effective internal control over the Federal award that provides reasonable assurance that TXDOT is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of five SF-425, Federal Financial Reports submitted during the fiscal year. For the SF-425 report for the 3-48-SBGP-147-2022 grant award submitted on March 6, 2024, we noted TXDOT did not report the recipient share of expenditures required. The recipient share of expenditures was incurred for the project; however, they were inadvertently omitted from the report. Questioned costs: None Context: See “Condition.” Cause: TXDOT prepares financial reports based on expenditures reported in its Peoplesoft system. The project for grant 3-48-SBGP-147-2022 was set up as 100% federal as the match was being met by the subrecipient. As such, TXDOT was reimbursing the subrecipient at 100% while the subrecipient met the 10% match with local funds. Accordingly, the matching funds, as incurred by the subrecipient, were not considered when preparing and reviewing the SF-425 report. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No Recommendation: We recommend management enhance its internal controls over the review and approval of the SF-425 reports to include a review of the grant award to ensure the subrecipient share of expenditures are reported properly reported. Views of responsible officials: TxDOT AVN agrees with this finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Transportation Federal Program Title: Airport Improvement program ALN: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 3-48-SBGP-147-2022 September 14, 2022 – September 13, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Department of Transportation (TXDOT): Establish and maintain effective internal control over the Federal award that provides reasonable assurance that TXDOT is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of five SF-425, Federal Financial Reports submitted during the fiscal year. For the SF-425 report for the 3-48-SBGP-147-2022 grant award submitted on March 6, 2024, we noted TXDOT did not report the recipient share of expenditures required. The recipient share of expenditures was incurred for the project; however, they were inadvertently omitted from the report. Questioned costs: None Context: See “Condition.” Cause: TXDOT prepares financial reports based on expenditures reported in its Peoplesoft system. The project for grant 3-48-SBGP-147-2022 was set up as 100% federal as the match was being met by the subrecipient. As such, TXDOT was reimbursing the subrecipient at 100% while the subrecipient met the 10% match with local funds. Accordingly, the matching funds, as incurred by the subrecipient, were not considered when preparing and reviewing the SF-425 report. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No Recommendation: We recommend management enhance its internal controls over the review and approval of the SF-425 reports to include a review of the grant award to ensure the subrecipient share of expenditures are reported properly reported. Views of responsible officials: TxDOT AVN agrees with this finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Transportation Federal Program Title: Airport Improvement program ALN: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 3-48-SBGP-147-2022 September 14, 2022 – September 13, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Department of Transportation (TXDOT): Establish and maintain effective internal control over the Federal award that provides reasonable assurance that TXDOT is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of five SF-425, Federal Financial Reports submitted during the fiscal year. For the SF-425 report for the 3-48-SBGP-147-2022 grant award submitted on March 6, 2024, we noted TXDOT did not report the recipient share of expenditures required. The recipient share of expenditures was incurred for the project; however, they were inadvertently omitted from the report. Questioned costs: None Context: See “Condition.” Cause: TXDOT prepares financial reports based on expenditures reported in its Peoplesoft system. The project for grant 3-48-SBGP-147-2022 was set up as 100% federal as the match was being met by the subrecipient. As such, TXDOT was reimbursing the subrecipient at 100% while the subrecipient met the 10% match with local funds. Accordingly, the matching funds, as incurred by the subrecipient, were not considered when preparing and reviewing the SF-425 report. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No Recommendation: We recommend management enhance its internal controls over the review and approval of the SF-425 reports to include a review of the grant award to ensure the subrecipient share of expenditures are reported properly reported. Views of responsible officials: TxDOT AVN agrees with this finding.
Finding Reference: 2024-003 – Reporting Federal Agency: U.S Department of Agriculture Federal Program: Water and Waste Disposal System for Rural Communities - ALN# 10.760 Compliance Requirement: Reporting Criteria: The Uniform Guidance requires that non-federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR section 200.329). They also may be required to submit special reports as required by the terms and conditions of the federal award. The U.S Department of Agriculture requires the Authority to submit Quarterly Income and Expense Statements. The reports are to be signed by the appropriate borrower official and submitted within 30 days of each quarter’s end. Condition: The Authority has not submitted Quarterly Income and Expense Statements within 30 days of the fiscal quarter end. However, the Authority has submitted audited annual financial reports within 9 months of fiscal year end. This is a repeat finding from the prior year. Cause and Effect: The Authority was unacquainted with quarterly filing requirements as set forth by the U.S. Department of Agriculture per the loan agreement. Without filing quarterly Income and Expense Statements, USDA is unaware of how funding is spent throughout the year. Questioned Cost: None Identification of Repeat Finding: No Recommendation: The Authority should begin to submit quarterly reports in accordance with loan agreement. Views of Responsible Officials: The Authority is working towards submitting appropriate reports.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
Finding Reference: 2024-003 – Reporting Federal Agency: U.S Department of Agriculture Federal Program: Water and Waste Disposal System for Rural Communities - ALN# 10.760 Compliance Requirement: Reporting Criteria: The Uniform Guidance requires that non-federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR section 200.329). They also may be required to submit special reports as required by the terms and conditions of the federal award. The U.S Department of Agriculture requires the Authority to submit Quarterly Income and Expense Statements. The reports are to be signed by the appropriate borrower official and submitted within 30 days of each quarter’s end. Condition: The Authority has not submitted Quarterly Income and Expense Statements within 30 days of the fiscal quarter end. However, the Authority has submitted audited annual financial reports within 9 months of fiscal year end. This is a repeat finding from the prior year. Cause and Effect: The Authority was unacquainted with quarterly filing requirements as set forth by the U.S. Department of Agriculture per the loan agreement. Without filing quarterly Income and Expense Statements, USDA is unaware of how funding is spent throughout the year. Questioned Cost: None Identification of Repeat Finding: No Recommendation: The Authority should begin to submit quarterly reports in accordance with loan agreement. Views of Responsible Officials: The Authority is working towards submitting appropriate reports.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2024 Comment # 2024-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND EARLY HEAD START, LIHEAP, LIHWAP, CSBG, ASTHO, CACFP and CSLFRF FAL # 93.600, 93.568, 93.499, 93.569, 93.185, 10.558, 21.027 (Questioned Costs - Undetermined) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The closeout process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2024. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, state filings, etc.). Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). Accordingly, the Agency is not in compliance with federal and state reporting as specified by grants and contracts and the Federal Audit Clearinghouse. The systemic cause appears to be the untimely resignation of key personnel, a change in the accounting system, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Policies and procedures are not followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency has hired a new fiscal officer (CFO) and should hire additional staff (grant accountant and a general ledger accountant) to assist the new fiscal officer. New staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The new automated financial systems, will support financial reporting to meet GAAP requirements and to provide informative reports for Board and Management. All enhancements will be implemented by December 31, 2025.