Criteria or Specific Requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Condition: During our testing, we noted four instances of errors totaling a net error of $906 (an absolute value error of $1,030) where the incorrect number of hours were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee's pay. As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees' time and effort and benefit obtained by grant from the allocated cost. Management noted that it performed year-end grant reconciliations to ensure costs were properly allocated to each grant in total. We noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. Questioned Costs: $906 of allocated salaries expense described above, which is related to Assistance Listing Number 93.044. Context: These five instances were noting during testing of 26 payroll and payroll-related disbursements. Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of specific grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It could also lead to challenges in maintaining sufficient supporting documentation of such cost allocations. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations. Views of responsible officials: Management does not agree with this finding. LSC program letter 22-5 emphasizes the importance of reconciliations of timekeeping reports with labor costs, distribution report or alternative reports. CLS prioritizes this practice of reconciliation and used it during the last months of 2024 to improve internal controls and minimize potential errors. We do not believe that CLA fully and fairly considered CLS’s thorough and complete reconciliation. A “material weakness” is defined as a deficiency “such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.” Given that reconciliation is part of our internal control process used to prevent and detect/correct any errors, it should have been fully considered and is unfairly excluded from the review. For this reason, CLS considers that this is not a material weakness as the reconciliation caught and corrected these errors. Finally, the total amount of this finding is very low and should not rise to the level of material weakness. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. The aging cluster is not an LSC program and so its relevance to this finding is unclear. Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Such costs should be contemporaneously applied to grants as they are incurred using a system of processes and controls.
Criteria or Specific Requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Condition: During our testing, we noted four instances of errors totaling a net error of $906 (an absolute value error of $1,030) where the incorrect number of hours were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee's pay. As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees' time and effort and benefit obtained by grant from the allocated cost. Management noted that it performed year-end grant reconciliations to ensure costs were properly allocated to each grant in total. We noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. Questioned Costs: $906 of allocated salaries expense described above, which is related to Assistance Listing Number 93.044. Context: These five instances were noting during testing of 26 payroll and payroll-related disbursements. Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of specific grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It could also lead to challenges in maintaining sufficient supporting documentation of such cost allocations. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations. Views of responsible officials: Management does not agree with this finding. LSC program letter 22-5 emphasizes the importance of reconciliations of timekeeping reports with labor costs, distribution report or alternative reports. CLS prioritizes this practice of reconciliation and used it during the last months of 2024 to improve internal controls and minimize potential errors. We do not believe that CLA fully and fairly considered CLS’s thorough and complete reconciliation. A “material weakness” is defined as a deficiency “such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.” Given that reconciliation is part of our internal control process used to prevent and detect/correct any errors, it should have been fully considered and is unfairly excluded from the review. For this reason, CLS considers that this is not a material weakness as the reconciliation caught and corrected these errors. Finally, the total amount of this finding is very low and should not rise to the level of material weakness. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. The aging cluster is not an LSC program and so its relevance to this finding is unclear. Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Such costs should be contemporaneously applied to grants as they are incurred using a system of processes and controls.
Criteria or Specific Requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Condition: During our testing, we noted four instances of errors totaling a net error of $906 (an absolute value error of $1,030) where the incorrect number of hours were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee's pay. As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees' time and effort and benefit obtained by grant from the allocated cost. Management noted that it performed year-end grant reconciliations to ensure costs were properly allocated to each grant in total. We noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. Questioned Costs: $906 of allocated salaries expense described above, which is related to Assistance Listing Number 93.044. Context: These five instances were noting during testing of 26 payroll and payroll-related disbursements. Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of specific grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It could also lead to challenges in maintaining sufficient supporting documentation of such cost allocations. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations. Views of responsible officials: Management does not agree with this finding. LSC program letter 22-5 emphasizes the importance of reconciliations of timekeeping reports with labor costs, distribution report or alternative reports. CLS prioritizes this practice of reconciliation and used it during the last months of 2024 to improve internal controls and minimize potential errors. We do not believe that CLA fully and fairly considered CLS’s thorough and complete reconciliation. A “material weakness” is defined as a deficiency “such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.” Given that reconciliation is part of our internal control process used to prevent and detect/correct any errors, it should have been fully considered and is unfairly excluded from the review. For this reason, CLS considers that this is not a material weakness as the reconciliation caught and corrected these errors. Finally, the total amount of this finding is very low and should not rise to the level of material weakness. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. The aging cluster is not an LSC program and so its relevance to this finding is unclear. Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Such costs should be contemporaneously applied to grants as they are incurred using a system of processes and controls.
Criteria or Specific Requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Condition: During our testing, we noted four instances of errors totaling a net error of $906 (an absolute value error of $1,030) where the incorrect number of hours were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee's pay. As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees' time and effort and benefit obtained by grant from the allocated cost. Management noted that it performed year-end grant reconciliations to ensure costs were properly allocated to each grant in total. We noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. Questioned Costs: $906 of allocated salaries expense described above, which is related to Assistance Listing Number 93.044. Context: These five instances were noting during testing of 26 payroll and payroll-related disbursements. Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of specific grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It could also lead to challenges in maintaining sufficient supporting documentation of such cost allocations. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations. Views of responsible officials: Management does not agree with this finding. LSC program letter 22-5 emphasizes the importance of reconciliations of timekeeping reports with labor costs, distribution report or alternative reports. CLS prioritizes this practice of reconciliation and used it during the last months of 2024 to improve internal controls and minimize potential errors. We do not believe that CLA fully and fairly considered CLS’s thorough and complete reconciliation. A “material weakness” is defined as a deficiency “such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.” Given that reconciliation is part of our internal control process used to prevent and detect/correct any errors, it should have been fully considered and is unfairly excluded from the review. For this reason, CLS considers that this is not a material weakness as the reconciliation caught and corrected these errors. Finally, the total amount of this finding is very low and should not rise to the level of material weakness. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. The aging cluster is not an LSC program and so its relevance to this finding is unclear. Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Such costs should be contemporaneously applied to grants as they are incurred using a system of processes and controls.
Criteria or Specific Requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Condition: During our testing, we noted four instances of errors totaling a net error of $906 (an absolute value error of $1,030) where the incorrect number of hours were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee's pay. As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees' time and effort and benefit obtained by grant from the allocated cost. Management noted that it performed year-end grant reconciliations to ensure costs were properly allocated to each grant in total. We noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. Questioned Costs: $906 of allocated salaries expense described above, which is related to Assistance Listing Number 93.044. Context: These five instances were noting during testing of 26 payroll and payroll-related disbursements. Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of specific grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It could also lead to challenges in maintaining sufficient supporting documentation of such cost allocations. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations. Views of responsible officials: Management does not agree with this finding. LSC program letter 22-5 emphasizes the importance of reconciliations of timekeeping reports with labor costs, distribution report or alternative reports. CLS prioritizes this practice of reconciliation and used it during the last months of 2024 to improve internal controls and minimize potential errors. We do not believe that CLA fully and fairly considered CLS’s thorough and complete reconciliation. A “material weakness” is defined as a deficiency “such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.” Given that reconciliation is part of our internal control process used to prevent and detect/correct any errors, it should have been fully considered and is unfairly excluded from the review. For this reason, CLS considers that this is not a material weakness as the reconciliation caught and corrected these errors. Finally, the total amount of this finding is very low and should not rise to the level of material weakness. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. The aging cluster is not an LSC program and so its relevance to this finding is unclear. Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Such costs should be contemporaneously applied to grants as they are incurred using a system of processes and controls.
Criteria or Specific Requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Condition: During our testing, we noted four instances of errors totaling a net error of $906 (an absolute value error of $1,030) where the incorrect number of hours were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee's pay. As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees' time and effort and benefit obtained by grant from the allocated cost. Management noted that it performed year-end grant reconciliations to ensure costs were properly allocated to each grant in total. We noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. Questioned Costs: $906 of allocated salaries expense described above, which is related to Assistance Listing Number 93.044. Context: These five instances were noting during testing of 26 payroll and payroll-related disbursements. Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of specific grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It could also lead to challenges in maintaining sufficient supporting documentation of such cost allocations. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations. Views of responsible officials: Management does not agree with this finding. LSC program letter 22-5 emphasizes the importance of reconciliations of timekeeping reports with labor costs, distribution report or alternative reports. CLS prioritizes this practice of reconciliation and used it during the last months of 2024 to improve internal controls and minimize potential errors. We do not believe that CLA fully and fairly considered CLS’s thorough and complete reconciliation. A “material weakness” is defined as a deficiency “such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.” Given that reconciliation is part of our internal control process used to prevent and detect/correct any errors, it should have been fully considered and is unfairly excluded from the review. For this reason, CLS considers that this is not a material weakness as the reconciliation caught and corrected these errors. Finally, the total amount of this finding is very low and should not rise to the level of material weakness. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. The aging cluster is not an LSC program and so its relevance to this finding is unclear. Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Such costs should be contemporaneously applied to grants as they are incurred using a system of processes and controls.
Criteria or Specific Requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Condition: During our testing, we noted four instances of errors totaling a net error of $906 (an absolute value error of $1,030) where the incorrect number of hours were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee's pay. As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees' time and effort and benefit obtained by grant from the allocated cost. Management noted that it performed year-end grant reconciliations to ensure costs were properly allocated to each grant in total. We noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. Questioned Costs: $906 of allocated salaries expense described above, which is related to Assistance Listing Number 93.044. Context: These five instances were noting during testing of 26 payroll and payroll-related disbursements. Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of specific grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It could also lead to challenges in maintaining sufficient supporting documentation of such cost allocations. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations. Views of responsible officials: Management does not agree with this finding. LSC program letter 22-5 emphasizes the importance of reconciliations of timekeeping reports with labor costs, distribution report or alternative reports. CLS prioritizes this practice of reconciliation and used it during the last months of 2024 to improve internal controls and minimize potential errors. We do not believe that CLA fully and fairly considered CLS’s thorough and complete reconciliation. A “material weakness” is defined as a deficiency “such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.” Given that reconciliation is part of our internal control process used to prevent and detect/correct any errors, it should have been fully considered and is unfairly excluded from the review. For this reason, CLS considers that this is not a material weakness as the reconciliation caught and corrected these errors. Finally, the total amount of this finding is very low and should not rise to the level of material weakness. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. The aging cluster is not an LSC program and so its relevance to this finding is unclear. Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented. Such costs should be contemporaneously applied to grants as they are incurred using a system of processes and controls.
2024-002 Twenty-First Century Community Learning Centers – Assistance Listing No. 84.287 Significant Deficiency in Internal Control Over Compliance and Noncompliance – Appropriate Review of Expenditures Claimed B. Allowable Costs/Cost Principles and C. Cash Management Criteria: In accordance with 2 CFR § 200.403(e), expenses must be determined under generally accepted accounting principles (GAAP) to be considered allowable unless otherwise noted in 2 CFR 200. In accordance with 2 CFR § 200.305(b), the draws under reimbursable grants must be limited to the minimum amount needed and drawn down after expenses have incurred. Condition and Context: During our testing of expenses charged to the federal program, we identified one transaction which the Organization prepaid for services to be rendered in 2025. The prepaid expense were charged to the SEFA in 2024 which does not match when they should be recognized as expenses under GAAP. The expenses were claimed for reimbursement prior to being incurred based on GAAP. Total questioned costs for this instance were $8,750. The population was considered the month of December as these were went the prepayments were made. The error rate for the defined population was 93.85% resulting in likely questioned costs of $14,393. Our sample was not statistically valid. Cause and Effect: The issue appears to have resulted from a lack of adequate review procedures to ensure that expenses charged to the federal award align with recognition under GAAP. As a result, the entity claimed expenditures which may be unallowable. Claimed expenditures which may be unallowable and drawn prior to being incurred. Recommendation: We recommend that management strengthen its review procedures over expense cutoff to ensure that expenditures are recognized on the SEFA in alignment with GAAP and are drawn down appropriately under the cost reimbursement method. Additionally, training should be provided to accounting personnel on Uniform Guidance compliance and GAAP requirements related to expense recognition. Views of Responsible Officials and Planned Corrective Action: We agree with the recommendation and plan to have the corrective action implemented by August 2025.
2024-001 Allowable Compensation Costs Material Weakness in Internal Control Over Compliance 16.575 Crime Victim Assistance Criteria – 2 CFR Section 200.403 states that costs must be necessary and reasonable for the performance of the federal award. Costs must also conform to any limitations or exclusions set forth in the federal award as to types or amount of cost items. In addition, 2 CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition and Context – Through a financial review by a pass-through entity, compensation costs of $32,302 were identified as unallowed under the terms of the federal award for the budget period July 1, 2023 to June 30, 2024. These costs included $19,259 in calendar year 2023 and $13,043 in calendar year 2024. Cause – CCAHT did not have internal controls in place to ensure that salaries and wages claimed for reimbursement was accurate, allowable, and properly allocated. Effect – CCAHT submitted salaries and wages for reimbursement that were unallowed under the terms of the federal award. Questioned Costs – This resulted in known questioned costs of $32,302. Repeat Finding - No Recommendations – We recommend CCAHT implement internal controls to ensure all costs charged to the program are accurate, allowable, and properly allocated in accordance with the terms of the federal award, and that there is proper review and approval. Management’s Response – Management concurs with the audit recommendations. See Management’s Corrective Action Plan.
2024-001 Allowable Compensation Costs Material Weakness in Internal Control Over Compliance 16.575 Crime Victim Assistance Criteria – 2 CFR Section 200.403 states that costs must be necessary and reasonable for the performance of the federal award. Costs must also conform to any limitations or exclusions set forth in the federal award as to types or amount of cost items. In addition, 2 CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition and Context – Through a financial review by a pass-through entity, compensation costs of $32,302 were identified as unallowed under the terms of the federal award for the budget period July 1, 2023 to June 30, 2024. These costs included $19,259 in calendar year 2023 and $13,043 in calendar year 2024. Cause – CCAHT did not have internal controls in place to ensure that salaries and wages claimed for reimbursement was accurate, allowable, and properly allocated. Effect – CCAHT submitted salaries and wages for reimbursement that were unallowed under the terms of the federal award. Questioned Costs – This resulted in known questioned costs of $32,302. Repeat Finding - No Recommendations – We recommend CCAHT implement internal controls to ensure all costs charged to the program are accurate, allowable, and properly allocated in accordance with the terms of the federal award, and that there is proper review and approval. Management’s Response – Management concurs with the audit recommendations. See Management’s Corrective Action Plan.
2024-001 Allowable Compensation Costs Material Weakness in Internal Control Over Compliance 16.575 Crime Victim Assistance Criteria – 2 CFR Section 200.403 states that costs must be necessary and reasonable for the performance of the federal award. Costs must also conform to any limitations or exclusions set forth in the federal award as to types or amount of cost items. In addition, 2 CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition and Context – Through a financial review by a pass-through entity, compensation costs of $32,302 were identified as unallowed under the terms of the federal award for the budget period July 1, 2023 to June 30, 2024. These costs included $19,259 in calendar year 2023 and $13,043 in calendar year 2024. Cause – CCAHT did not have internal controls in place to ensure that salaries and wages claimed for reimbursement was accurate, allowable, and properly allocated. Effect – CCAHT submitted salaries and wages for reimbursement that were unallowed under the terms of the federal award. Questioned Costs – This resulted in known questioned costs of $32,302. Repeat Finding - No Recommendations – We recommend CCAHT implement internal controls to ensure all costs charged to the program are accurate, allowable, and properly allocated in accordance with the terms of the federal award, and that there is proper review and approval. Management’s Response – Management concurs with the audit recommendations. See Management’s Corrective Action Plan.
Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 6/1/24-5/31/25 Type of Finding: Compliance and Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: A nonfederal entity may only charge allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency made the federal award that were authorized by the federal awarding agency (2 CFR sections 200.308, 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Cost incurred prior to the start of the period of performance were charged to the grant. Questioned Costs: $2,979 Context: Two of thirteen transactions selected for testing. Cause: These costs related to a payroll period which crossed over two different grant budget periods, and the costs allocated to the grant were not prorated for the number of days within the period of performance. Effect: Unallowable costs may be allocated to the grant. Repeat Finding: No. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which pay periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by the days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 6/1/24-5/31/25 Type of Finding: Compliance and Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: A nonfederal entity may only charge allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency made the federal award that were authorized by the federal awarding agency (2 CFR sections 200.308, 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Cost incurred prior to the start of the period of performance were charged to the grant. Questioned Costs: $2,979 Context: Two of thirteen transactions selected for testing. Cause: These costs related to a payroll period which crossed over two different grant budget periods, and the costs allocated to the grant were not prorated for the number of days within the period of performance. Effect: Unallowable costs may be allocated to the grant. Repeat Finding: No. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which pay periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by the days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Assistance Listing Number(s): 20.509 Name of Federal Program or Cluster: Formula Grants for Rural Areas and Tribal Transit Program Name of Federal Agency: Department of Transportation Federal Award Identification Number: CY2024 WETAP Federal Award Year: January 1, 2024 through December 31, 2024 Criteria: According to 2 CFR §200.436(b)(1), “The depreciation cost is not allowable for equipment that was paid for by the Federal Government either directly or through a non-federal entity's federal award.” Additionally, costs charged to a federal award must be allowable, allocable, and reasonable per 2 CFR §200.403. Condition: During the preliminary review of expenditures charged to federal programs, it was noted that depreciation expense was recorded for a vehicle that had been 100% federally funded in a prior year. The depreciation was charged to the major federal program in the current fiscal year. Cause: The depreciation was charged due to a lack of review procedures to ensure that federally funded assets are excluded from depreciation calculations allocated to federal awards. Effect or Potential Effect and Questioned Costs: As a result, unallowable costs were charged to the federal program, which may result in questioned costs and potential repayment to the federal agency, as well as noncompliance with federal cost principles. Context: The error was not a part of our sample. It was discovered as a year-end journal entry. Repeat Finding: No Recommendation: Management should conduct a review of depreciation charges for the current and future years to ensure that federally funded assets are excluded from depreciation allocations to federal programs.
2024 001 Activities Allowed or Unallowed and Allowable Costs/Cost Principles U.S. Department of Homeland Security: Passed through the State of New Jersey, Department of Law and Public Safety: Disaster Grants – Public Assistance (Presidentially Declared Disasters) – ALN 97.036 Federal Grant Numbers and Years State of New Jersey pass through number: UH1WX Project #2365 – Award Year 2024 (Application 696220) Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Prior Year Findings: 2023-001 Criteria Compliance – Program Specific The Federal Emergency Management Agency (FEMA), as part of the U.S. Department of Homeland Security, evaluates the eligibility of all costs claimed by the applicant. Not all costs incurred as a result of the incident are eligible. (PAPPG v4) Chapter 4, page(s) 51 54; Chapter 6, page(s) 65 & 93 95. Cost must be: • Directly tied to the performance of eligible work; • Adequately documented (2 CFR section 200.403(g)); • Reduced by all applicable credits, such as insurance proceeds and salvage values (Stafford Act section 312, 42 USC section 5155, and 2 CFR section 200.406); • Authorized and not prohibited under federal, state, territorial, tribal, or local government laws or regulations; • Consistent with applicant’s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the applicant; and • Necessary and reasonable to accomplish the work properly and efficiently (2 CFR section 200.403). 1. Applicant (Force Account) Labor FEMA refers to the applicant’s personnel as “force account.” FEMA reimburses force account labor based on actual hourly rates plus the cost of the employee’s actual fringe benefits. FEMA calculates the fringe benefit cost based on a percentage of the hourly pay rate. Because certain items in a benefit package are not dependent on hours worked (e.g., health insurance), the percentage for overtime is usually different than the percentage for straight time. Compliance – General Per 2 CFR Section 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non federal entity. Internal Control Per 2 CFR section 200.303(a), a non federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non federal entity 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). Condition and Context The New Jersey Turnpike Authority (the “Authority”), through the State of New Jersey, Department of Homeland Security (the State), administers the federal Disaster Grants – Public Assistance (Presidentially Declared Disasters) program and is reimbursed for eligible expenditures when a presidentially declared disaster occurs. For the Authority’s force account labor costs, the Authority utilizes manual Daily Worksheets (timesheets) as the official records for time and effort worked during an event by the Authority’s personnel. These timesheets are then entered into the Authority’s information system (PeopleSoft) for review and approval, reconciling back to the information entered on the respective timesheet. For thirteen of sixty timesheets selected for testwork, the Authority was unable to provide the timesheets as the official record for the time and effort charged to the federal program. However, the Authority successfully demonstrated through PeopleSoft system that the time and effort charged to the federal program was properly reviewed and approved and reconciled to the amounts of reimbursement requested from the State. The finding is recurring from the prior year as the corrective action plan developed by the Authority from the prior year finding was not implemented until December 2024, which is subsequent to when these expenditures were incurred by the Authority between fiscal years 2020 and 2022. Cause The Authority did not maintain and make readily available certain timesheets used as the official record for the time and effort charged to the federal program in accordance with the Uniform Guidance. Effect The Authority did not comply with 2 CFR Section 200.430 related to incorporating the physical timesheets into the official records of the Authority. Questioned Costs None as the time and effort amounts charged were determined to be allowable. Recommendation We recommend that the Authority strengthen its processes to ensure that all timesheets for disaster related events that are federally funded are maintained and are made readily available if subject to audit or other inspection in accordance with the Uniform Guidance. Views of Responsible Officials Management agrees with the finding. Beginning in December 2024, as a commitment to strengthen our processes and ensure that all physical timesheets related to FEMA-declared disaster events are properly maintained and readily accessible, management put a process in place to enhance procedures and controls for timesheets going forward to ensure full compliance with the Uniform Guidance requirements. This process was successfully implemented as of this date and for prospective periods. However, this process does not remedy the issue noted in the finding which relates to time worked from 2020-2022, which is before the process was in place. Therefore, the finding is repeated from the prior year.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Additionally, per 2 CFR §200.403 and §200.302, costs charged to federal awards must be allowable, allocable, and properly documented, and financial reporting must be accurate, complete, and supported by the accounting system. Condition: Although the Parish has implemented internal controls related to the allowability of costs and the preparation of required reports for the Coronavirus State and Local Fiscal Recovery funds, they were not operating effectively during fiscal year 2024. Tests of controls indicated that transactions were not tracked appropriately to ensure they were charged to the correct funding source. In addition, quarterly project and expenditure reports submitted to the U.S. Treasury included inaccurate or unsupported information due to a lack of tracking and reconciliation procedures. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel. Parish administration and management were immediately tasked with enhancing operations related to procedural concerns from the prior administration and performing the accounting function without sufficient documentation on several balances and transactions. The documented controls were not in practice because of this. Effect: While no instances of noncompliance were noted, the lack of documented controls in practice increases the risk that future required reports could be incomplete, inaccurate, or untimely, as well as, federal costs being unallowed per the cost principles which could potentially result in program noncompliance. Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001, to prevent noncompliance of the Uniform Guidance as required.
Federal Agency: Department of the Treasury Pass Through Entity: Child Care Aware of Kansas Program Name: Coronavirus State and Local Recovery Funds (COVID-19) Assistance Listing Number: 21.027 Award Period: March 12, 2020 – June 30, 2023 Criteria: According to 2 CFR 200.403, costs must be necessary and reasonable for the performance of the Federal award in order to be allowable. 2 CFR 200.317 states that procurement procedures must avoid the acquisition of unnecessary items. Condition: The Organization acquired a noncancelable software license for a term of ten years with federal funds in 2023. The software was utilized briefly in 2023 then abandoned and subsequently written off in 2024. Cause: As discussed at Finding 2024-001, the Organization’s policies and procedures do not ensure expenditures related to significant long-term commitments are reasonable and necessary and therefore allowable. Effect: Software was purchased without proper due diligence to determine whether it was necessary for the Organization leading to waste of federal funds. Questioned Costs: The cost of the 10-year license was $158,751, all of which was expended in 2023.Perspective: The expenditure occurred in 2023. The write-off of the software license occurred in 2024 and we became aware of it during the 2024 audit although this program was not currently audited as a major program. We do not consider the condition to be pervasive. Recommendation: Policies and procedures should be implemented for expenditures related to significant long-term commitments to undergo proper vetting to ensure the expense is necessary prior to purchase. Views of Responsible Officials: Management believes the expenditure was reasonable and necessary at the time the license was acquired. Subsequent staffing changes resulted in the software no longer benefitting the Organization to the extent originally intended without significant further investment for customization. Management notes that the questioned cost represents 3% of the federal award.
Federal Award Findings and Questioned Costs: Finding Number: 2024-001 Federal Assistance Listing Number: 97.036 Program: COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Agency Name: Federal Emergency Management Agency Federal Award Number: D20-528 Federal Award Year: 2024 Criteria Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Subpart E, Section 200.303), the nonfederal entity must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, Subpart E Section 200.403 states that administrative closeout costs may be incurred until the due date of the final reports. If incurred, these costs must be liquidated prior to the due date of the final reports and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. Conditions Found In one of 25 selections for testwork over period of performance, expenditures related to contract labor were submitted for reimbursement to the Federal Emergency Management Agency (FEMA) that were outside of the project period. Further, the review performed over expenditures was not completed appropriately to identify this error, representing an instance of the District’s internal control not operating as designed. Cause The District does not have adequate controls in place to ensure that contract labor expenditures submitted for reimbursement by FEMA under the COVID 19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) program represent service dates within the project period. Effect Without effective controls in place, expenditures could be reimbursed by the program that were incurred outside of the project period, resulting in non compliance with program requirements. Questioned Costs $1,316, representing the known amount of expenditures incurred outside of the project period for the COVID 19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) program. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This finding is not a repeat finding in the immediate prior audit. Recommendation We recommend that management strengthen processes and controls in place to ensure contract labor expenditures submitted to FEMA for reimbursement under the COVID 19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) program are appropriately reviewed prior to submission to ensure they represent service dates within the project period. Views of Responsible Officials The District agrees with the finding and accepts the recommendation.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2025-002 – Questioned or Unsupported Costs Information on Federal Program United States Department of Homeland Security - Federal Emergency Management Agency (FEMA). Federal Assistance Listing Number 97.036 – Disaster Grants – Public Assistance. Compliance Requirements Activities Allowed or Unallowed / Allowable Costs and Cost Principles Criteria In accordance with 2 CFR §200.403, costs charged to a federal award must be necessary, reasonable, and allocable to the award. Additionally, costs must be adequately documented to be allowable under federal awards. Condition During our testing of activities and allowable costs for the year ended December 31, 2024, we identified seven (7) instances where the amounts requested for reimbursement were not allowed. Cause No cause could be determined. Effect The City received FEMA grant reimbursements for unallowable or unsupported costs, potentially reducing available federal funds for future emergencies. The City may also be at risk of noncompliance with FEMA cost-sharing (matching) requirements. Questioned Costs $54,366 (Federal share $40,775). Context Forty-two (42) disbursements totaling $410,854 were randomly selected for testing. We identified seven (7) exceptions. These exceptions included unsupported equipment and labor charges, duplicate payroll, duplicate material costs, and unsupported payroll. Recommendation We recommend the City review the identified transactions and consult with FEMA regarding resolution of the questioned costs. The City should also take steps to ensure that only allowable, adequately documented costs are submitted for reimbursement in the future. Management’s Response Responsible Official’s Response and Corrective Action Planned: We have reached out to FEMA and was provided this summarized response: “The project was obligated as a small project. FEMA does not adjust the funding amount unless specific conditions are met. If the applicant was stating that the actual cost for the small project was more than FEMA obligated, we would have to request what is called a New Small Project Overrun Appeal Request. But in this case, the actual cost resulted in an underrun based on the small project obligated amount. FEMA only asks for the applicants to apply the underrun amount back into the community." Management has also implemented a process to include financial oversight and review of all documents prior to submission to FEMA for reimbursement going forward. We will meet with all leadership staff to discuss documentation requirements necessary for FEMA reimbursements. Lastly, Management will only sign off on reimbursed costs after all changes to FEMA requests have been adequately documented. Implementation Date: Immediate Person Responsible for Corrective Action Plan: Chief Financial Officer, Ashley Cason
Federal Agency: United States Department of Commerce Federal Program Name: Office for Coastal Management Assistance Listing Number: 11.473 Federal Award Identification Year: 2020 Pass-Through Agency: National Fish and Wildlife Grant Agreement Award Period: 9/1/20-08/02/24 Compliance Requirement Affected: Subrecipient Suspension & Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: For two subrecipient samples that were selected, verification of subrecipient's suspension or debarment status was not verified. Context: A nonstatistical sample of 2 of 4 subrecipients were selected for testing for the Office for Coastal Management program. Condition noted above was identified during our procedures over subrecipients. Effect: CFSC did not verify suspension or debarment status, which could result in naming a subrecipient as an award recipient, which is potentially suspended or debarred. Cause: CFSC did not consistently ensure that Suspension or Debarment status was verified before naming the subrecipients tested as award recipients. Repeat Finding: The finding is a repeat finding. Recommendation: We recommend that CFSC strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for each subrecipient applicant during its pre-award subrecipient screening process. Management’s Views: See separate corrective action plan.
Federal Agency: United States Department of Agriculture, Forest Service Federal Program Name: Cooperative Forestry Assistance Assistance Listing Number: 10.664 Federal Award Identification Year: 2021 Pass-Through Agency: N/A Award Period: 09/01/21-08/31/26 Compliance Requirement Affected: Subrecipient Suspension & Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: For one subrecipient samples that was selected, verification of subrecipient's suspension or debarment status was not verified. Context: A nonstatistical sample of 5 out of 13 subrecipients were selected for testing for the Office for Coastal Management program. The condition noted above was identified during our procedures over CFSC’s subrecipients. Effect: CFSC did not verify suspension or debarment status, which could result in naming a subrecipient as an award recipient, which is potentially suspended or debarred. Cause: CFSC did not consistently ensure that Suspension or Debarment status was verified before naming the subrecipients tested as award recipients. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that CFSC strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for each subrecipient applicant during its pre-award subrecipient screening process. Management’s Views: See separate corrective action plan.
Federal Agency: United States Department of Agriculture, Forest Service Federal Program Name: Cooperative Forestry Assistance Assistance Listing Number: 10.664 Federal Award Identification Year: 2021 Pass-Through Agency: N/A Award Period: 09/01/21-08/31/26 Compliance Requirement Affected: Allowable Costs & Activities (Payroll) Type of Finding: Significant Deficiency in Internal Control over Compliance and Nonmaterial Noncompliance Criteria: 2 CFR 200.403(a) - Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Condition: For five hourly employees, CFSC performed a review of payroll discrepancies occurring between 2020- 2024, due to differences when comparing time recorded on time sheets to time recorded to payroll, which resulted in a non-significant payment made to back to the employees. Questioned Costs: The known questioned costs are $8,600. Context: A nonstatistical sample of 60 out of >250 employee pay periods were selected for testing for the Cooperative Forestry Assistance program. The condition noted above was identified during our procedures over CFSC’s payroll disbursements. Effect: CFSC's internal controls did not include thorough review of time entry when processing payroll, which can result in understatement of payroll expense. Cause: CFSC's internal controls did not include thorough review of time entry when processing payroll.
Federal Agency: U.S. Department of Health and Human Services Assistance Listing Numbers: 93.623 Federal Program Titles: Basic Center Grant Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal controls over federal awards. Furthermore, 2 CFR 200.403(g) requires that costs be adequately documented in order to be allowable under federal awards. Condition: During our testing of expenditures charged to the major program, we noted multiple instances that did not contain documented evidence of review or approval by a supervisor or program manager. Questioned Costs: None. Context: During our testing of ten expenditures charged to the major program, we noted three instances that did not contain documented evidence of review or approval by a supervisor or program manager. Although management stated that expenditures are reviewed before processing, no signatures, initials, timestamps, or electronic workflow logs were retained to demonstrate the review occurred. Effect: Failure to document review and approval increases the risk that unallowable or erroneous expenditures could be charged to the federal award and go undetected. Although no unallowable costs were identified in our testing, the control deficiency could lead to future noncompliance or questioned costs. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization enforce policies requiring all expenditures charged to federal programs to be reviewed and approved by an appropriate official, and document the approval through dated signatures, electronic approvals, or maintained audit trails in software utilized by the Organization. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-003 Insufficient Documentation of Other Direct Expenses Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition: During testing of direct costs charged to the federal program, the Organization did not maintain sufficient documentation to fully support all expenditures claimed. In one instance, a receipt supporting a claimed expense was missing. In three additional cases, although the expenditures were generally supported, the documentation did not clearly reflect how the amounts allocated to the major federal program were determined. While these issues were isolated and the known and likely questioned costs were immaterial, the lack of complete documentation represents noncompliance with federal requirements for allowable costs. Criteria: According to Uniform Guidance 2 CFR §200.302(b)(3), the Organization's financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. All records must be supported by source documentation. Additionally, 2 CFR §200.403(g) requires that all costs charged to federal awards must be adequately documented. Cause: These exceptions appear to result from informal documentation practices and a lack of consistent application of procedures. Management is heavily involved in the Organization’s financial processes, including allocation of costs, which can limit opportunities for independent oversight or review. The absence of a standardized and consistently enforced process for documenting cost allocations contributes to inconsistent recordkeeping. Possible of Known Effect: Although the overall financial impact of these exceptions was not material, the missing documentation prevents the Organization from fully demonstrating compliance with 2 CFR 200.403 and 200.302. Overreliance on a single individual for documentation and procedural execution without accompanying review or monitoring controls can increase the risk of errors, omissions, or audit findings, even when expenditures are reasonable and allowable. Questioned Costs: Known questioned costs of $2,742 were identified. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization implement a standardized procedure for documenting all direct and indirect cost allocations charged to federal programs, ensuring that each claim includes full supporting documentation such as receipts and annotated allocation details with consistent allocation methods. To strengthen internal controls, the Organization should consider establishing a review process for claims preparation that includes someone other than the individual preparing or allocating the expenditures. This will enhance accountability and help ensure compliance with federal documentation requirements. Views of Responsible Officials: The Organization will develop written guidelines specifying the required supporting documentation for each type of direct expense. Set up vendors in QuickBooks. We will hire and train Finance Manager to manage and track revenue and expenses, QuickBooks, grant reporting etc. All receipts and expenses will be scanned in and kept electronically. The Organization will provide training on documentation requirements, proper record submission, and compliance expectations.
Finding 2024-001 Interproject Payable – Amounts Owed to Other HUD Project Type of finding: Significant deficiency in internal control. Condition and context: During our audit we noted that the project has recorded a payable due to another HUD-assisted project in the amount of $3,072, and there is no documented HUD authorization supporting this obligation. Criteria: Per 2 CFR Part 200 (Uniform Guidance), §§200.302 and 200.403, federal program funds must be used only for allowable costs and in direct support of the objectives of the program. HUD requirements also prohibit the commingling of funds between projects unless explicitly authorized. Interproject payables or advances without proper documentation or timely settlement may constitute an unallowable use of program resources. Cause: Management permitted the use of funds from another HUD-assisted project to support operations of this project without obtaining HUD approval or establishing proper repayment terms. This occurred due to inadequate oversight of cash management and interproject transactions. Effect: Maintaining an outstanding payable to another HUD project: • Indicates potential misuse of federal funds. • Increases the risk of noncompliance with HUD requirements and Uniform Guidance. • May impair the project’s ability to demonstrate financial independence and program accountability. • Exposes the project to possible HUD sanctions, questioned costs, or repayment obligations. Questioned costs: Known questioned costs are $3,072. Recommendation: We recommend that project management: • Repay the outstanding payable to the related HUD project as soon as feasible. • Cease the practice of interproject borrowing unless HUD has provided explicit authorization. • Implement stronger internal controls over cash management and interproject transactions. • Document and monitor all project-level obligations to ensure compliance with HUD regulations. Views of Responsible Officials: Management agrees with this finding and the payment will be corrected. Management will review internal controls and implement a review process to only pay expenses already incurred to avoid future payments.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Suspension & Debarment Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our single audit procedures, 100% of our suspension and debarment samples selected did not contain sufficient documentation detailing the Organization’s process for determining the vendor was not suspended nor debarred prior to participating in the transaction. Context: A nonstatistical sample of 6 out of 21 vendors were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Suspension and Debarment. Effect: ODI did not verify suspension or debarment status, which could result in entering into a contract with a vendor, which is potentially suspended or debarred. Cause: ODI did not consistently ensure that Suspension or Debarment status was verified before entering into agreements with the vendors. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for vendors subject to verification according to ODI's Procurement policy, prior to entering into a contract with the vendor. Management’s Views: Management notes that debarment checks performed post transactions confirmed that no vendors were suspended or debarred. Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Allowable Costs & Activities (Payroll) Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.403(a) - Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Condition: During our single audit procedures of allowable costs, six employees had pay rates that could not be substantiated via evidence of approval on an approved wage rate change form. Questioned Costs: Known $14,112 Likely $553,607 Context: A nonstatistical sample of 16 out > 250 pay periods were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Allowable Costs & Activities (payroll). Effect: ODI did not retain documentation of wage rate change approvals, which could result in unapproved increases in wage rate changes being charged to the grant. Cause: ODI has a control designed to approve wage rate changes. However, documentation of approval could not be located. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that documentation is retained for approval of all wage rate changes. Management’s Views: Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Suspension & Debarment Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our single audit procedures, 100% of our suspension and debarment samples selected did not contain sufficient documentation detailing the Organization’s process for determining the vendor was not suspended nor debarred prior to participating in the transaction. Context: A nonstatistical sample of 6 out of 21 vendors were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Suspension and Debarment. Effect: ODI did not verify suspension or debarment status, which could result in entering into a contract with a vendor, which is potentially suspended or debarred. Cause: ODI did not consistently ensure that Suspension or Debarment status was verified before entering into agreements with the vendors. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for vendors subject to verification according to ODI's Procurement policy, prior to entering into a contract with the vendor. Management’s Views: Management notes that debarment checks performed post transactions confirmed that no vendors were suspended or debarred. Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Allowable Costs & Activities (Payroll) Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.403(a) - Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Condition: During our single audit procedures of allowable costs, six employees had pay rates that could not be substantiated via evidence of approval on an approved wage rate change form. Questioned Costs: Known $14,112 Likely $553,607 Context: A nonstatistical sample of 16 out > 250 pay periods were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Allowable Costs & Activities (payroll). Effect: ODI did not retain documentation of wage rate change approvals, which could result in unapproved increases in wage rate changes being charged to the grant. Cause: ODI has a control designed to approve wage rate changes. However, documentation of approval could not be located. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that documentation is retained for approval of all wage rate changes. Management’s Views: Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Suspension & Debarment Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our single audit procedures, 100% of our suspension and debarment samples selected did not contain sufficient documentation detailing the Organization’s process for determining the vendor was not suspended nor debarred prior to participating in the transaction. Context: A nonstatistical sample of 6 out of 21 vendors were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Suspension and Debarment. Effect: ODI did not verify suspension or debarment status, which could result in entering into a contract with a vendor, which is potentially suspended or debarred. Cause: ODI did not consistently ensure that Suspension or Debarment status was verified before entering into agreements with the vendors. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for vendors subject to verification according to ODI's Procurement policy, prior to entering into a contract with the vendor. Management’s Views: Management notes that debarment checks performed post transactions confirmed that no vendors were suspended or debarred. Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Allowable Costs & Activities (Payroll) Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.403(a) - Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Condition: During our single audit procedures of allowable costs, six employees had pay rates that could not be substantiated via evidence of approval on an approved wage rate change form. Questioned Costs: Known $14,112 Likely $553,607 Context: A nonstatistical sample of 16 out > 250 pay periods were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Allowable Costs & Activities (payroll). Effect: ODI did not retain documentation of wage rate change approvals, which could result in unapproved increases in wage rate changes being charged to the grant. Cause: ODI has a control designed to approve wage rate changes. However, documentation of approval could not be located. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that documentation is retained for approval of all wage rate changes. Management’s Views: Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Suspension & Debarment Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our single audit procedures, 100% of our suspension and debarment samples selected did not contain sufficient documentation detailing the Organization’s process for determining the vendor was not suspended nor debarred prior to participating in the transaction. Context: A nonstatistical sample of 6 out of 21 vendors were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Suspension and Debarment. Effect: ODI did not verify suspension or debarment status, which could result in entering into a contract with a vendor, which is potentially suspended or debarred. Cause: ODI did not consistently ensure that Suspension or Debarment status was verified before entering into agreements with the vendors. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for vendors subject to verification according to ODI's Procurement policy, prior to entering into a contract with the vendor. Management’s Views: Management notes that debarment checks performed post transactions confirmed that no vendors were suspended or debarred. Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Allowable Costs & Activities (Payroll) Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.403(a) - Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Condition: During our single audit procedures of allowable costs, six employees had pay rates that could not be substantiated via evidence of approval on an approved wage rate change form. Questioned Costs: Known $14,112 Likely $553,607 Context: A nonstatistical sample of 16 out > 250 pay periods were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Allowable Costs & Activities (payroll). Effect: ODI did not retain documentation of wage rate change approvals, which could result in unapproved increases in wage rate changes being charged to the grant. Cause: ODI has a control designed to approve wage rate changes. However, documentation of approval could not be located. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that documentation is retained for approval of all wage rate changes. Management’s Views: Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Suspension & Debarment Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our single audit procedures, 100% of our suspension and debarment samples selected did not contain sufficient documentation detailing the Organization’s process for determining the vendor was not suspended nor debarred prior to participating in the transaction. Context: A nonstatistical sample of 6 out of 21 vendors were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Suspension and Debarment. Effect: ODI did not verify suspension or debarment status, which could result in entering into a contract with a vendor, which is potentially suspended or debarred. Cause: ODI did not consistently ensure that Suspension or Debarment status was verified before entering into agreements with the vendors. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for vendors subject to verification according to ODI's Procurement policy, prior to entering into a contract with the vendor. Management’s Views: Management notes that debarment checks performed post transactions confirmed that no vendors were suspended or debarred. Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Allowable Costs & Activities (Payroll) Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.403(a) - Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Condition: During our single audit procedures of allowable costs, six employees had pay rates that could not be substantiated via evidence of approval on an approved wage rate change form. Questioned Costs: Known $14,112 Likely $553,607 Context: A nonstatistical sample of 16 out > 250 pay periods were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Allowable Costs & Activities (payroll). Effect: ODI did not retain documentation of wage rate change approvals, which could result in unapproved increases in wage rate changes being charged to the grant. Cause: ODI has a control designed to approve wage rate changes. However, documentation of approval could not be located. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that documentation is retained for approval of all wage rate changes. Management’s Views: Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Suspension & Debarment Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our single audit procedures, 100% of our suspension and debarment samples selected did not contain sufficient documentation detailing the Organization’s process for determining the vendor was not suspended nor debarred prior to participating in the transaction. Context: A nonstatistical sample of 6 out of 21 vendors were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Suspension and Debarment. Effect: ODI did not verify suspension or debarment status, which could result in entering into a contract with a vendor, which is potentially suspended or debarred. Cause: ODI did not consistently ensure that Suspension or Debarment status was verified before entering into agreements with the vendors. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for vendors subject to verification according to ODI's Procurement policy, prior to entering into a contract with the vendor. Management’s Views: Management notes that debarment checks performed post transactions confirmed that no vendors were suspended or debarred. Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: Various, see below Pass-Through Agency: Various, see below Pass-Through Number: Various, see below Award Period: Various, see below Compliance Requirement Affected: Allowable Costs & Activities (Payroll) Direct Agency Direct Award number Award Period Pass Through Entity (or) Pass Through Number U.S. Department of Health & Human Services (Direct) 90RG0243-01-00 10/1/2023-9/30/2024 90RG0225-01-00 10/1/2022-9/29/2025 90ZI0174-01-00 9/30/2023-09/29/2027 Passed through California Department of Social Services N/A 10/1/2023-9/30/2024 Passed through Los Rios Community College District N/A 9/30/2022-9/29/2025 Passed through Church World Services CWS-2024-04-015 10/1/2023-9/30/2024 CWS-2024-10-017 10/1/2024-9/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.403(a) - Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Condition: During our single audit procedures of allowable costs, six employees had pay rates that could not be substantiated via evidence of approval on an approved wage rate change form. Questioned Costs: Known $14,112 Likely $553,607 Context: A nonstatistical sample of 16 out > 250 pay periods were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Allowable Costs & Activities (payroll). Effect: ODI did not retain documentation of wage rate change approvals, which could result in unapproved increases in wage rate changes being charged to the grant. Cause: ODI has a control designed to approve wage rate changes. However, documentation of approval could not be located. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that documentation is retained for approval of all wage rate changes. Management’s Views: Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.
2024-001: Activities Allowed or Unallowed & Allowable Costs/Cost Principles - Material Weakness in Internal Control and Material Noncompliance Repeat of Prior Audit Finding 2023-001 Federal Program: Trans-National Crime Federal Agency: U.S. Department of State - Bureau of International Narcotics and Law Enforcement Affairs Federal Assistance Listing Number: 19.705 Federal Award Year: December 31, 2024 Criteria: 2 CFR section 200.303(a) of the Uniform Guidance requires all non-Federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. In addition, 2 CFR sections 200.405 and 200.403(g) require federal awards be expended only for allowable activities and be adequately documented, respectively. Condition/Context: The Corporation was unable to provide a signed contract or reconciliation to evidence allowability of the expenditures or documentation of review and approval for the following: • For 5 out of 40 selections, no evidence of approval of signed contract could be provided (control). • For 6 out of 40 selections, no evidence of signed contract or reconciliation support could be provided (compliance). This was not a statistically valid sample. Questioned Costs: Questioned costs were approximately $19,428. Cause: The Corporation did not retain/could not retrieve the signed contract or due to poor document retention. Effect: The Corporation has not complied with the specific requirements for activities allowed or unallowed and allowable costs/cost principles as described in the Uniform Guidance. Unallowable costs may have been charged to the federal program. Recommendation: We recommend that the Corporation review its process and implement procedures that would allow management to properly maintain all required documentation on its federal expenditures. Views of Responsible Officials: The Corporation has sustained and built upon the improvements achieved in 2023, maintaining a reduced occurrence of the findings noted in prior audits. The HR solution, Rippling, implemented in 2024, continues to be an integral part of ensuring that all agreements and rate changes are accurately tracked and fully documented. This system has strengthened the Corporation’s document retention practices and supported ongoing compliance with federal regulations. The rollout of Rippling’s timesheet module was completed for all of the Corporation’s South American entities, Central America, UK, France, Gabon and Senegal. The Corporation continued roll out into 2025 and completed that for all remaining entities including Thailand, Malaysia, UAE, Saudia Arabia, Central and South Africa.
Finding 2024-005 Agency: National Science Foundation Program: Research and Development Cluster (AL No. 47.076) Control Deficiency over Allowable Costs/Cost Principles Repeat Finding: No Condition: For 1 out of 25 selections, the transaction did not properly follow accrual basis accounting. The transaction was related to work performed in fiscal year 2023 but was included in the SEFA for fiscal year 2024. The total amount of this non-compliant transaction was $6,650. Criteria: As provided in 2 CFR section 200.403: Factors affecting allowability of costs, except where otherwise authorized by statute, costs must be determined in accordance with generally accepted accounting principles (GAAP) to be allowable under Federal awards. Cause: AACC does not have an effective policy in place to ensure costs are properly recorded in the correct fiscal year. Effect: AACC was not in compliance with the Allowable Costs/Cost Principles requirements in accordance with Uniform Guidance. Questioned Costs: None Recommendation: We recommend AACC implements a policy to properly accrue expenditures into the correct fiscal year. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.
Finding 2024-005 Agency: National Science Foundation Program: Research and Development Cluster (AL No. 47.076) Control Deficiency over Allowable Costs/Cost Principles Repeat Finding: No Condition: For 1 out of 25 selections, the transaction did not properly follow accrual basis accounting. The transaction was related to work performed in fiscal year 2023 but was included in the SEFA for fiscal year 2024. The total amount of this non-compliant transaction was $6,650. Criteria: As provided in 2 CFR section 200.403: Factors affecting allowability of costs, except where otherwise authorized by statute, costs must be determined in accordance with generally accepted accounting principles (GAAP) to be allowable under Federal awards. Cause: AACC does not have an effective policy in place to ensure costs are properly recorded in the correct fiscal year. Effect: AACC was not in compliance with the Allowable Costs/Cost Principles requirements in accordance with Uniform Guidance. Questioned Costs: None Recommendation: We recommend AACC implements a policy to properly accrue expenditures into the correct fiscal year. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.
Finding 2024-005 Agency: National Science Foundation Program: Research and Development Cluster (AL No. 47.076) Control Deficiency over Allowable Costs/Cost Principles Repeat Finding: No Condition: For 1 out of 25 selections, the transaction did not properly follow accrual basis accounting. The transaction was related to work performed in fiscal year 2023 but was included in the SEFA for fiscal year 2024. The total amount of this non-compliant transaction was $6,650. Criteria: As provided in 2 CFR section 200.403: Factors affecting allowability of costs, except where otherwise authorized by statute, costs must be determined in accordance with generally accepted accounting principles (GAAP) to be allowable under Federal awards. Cause: AACC does not have an effective policy in place to ensure costs are properly recorded in the correct fiscal year. Effect: AACC was not in compliance with the Allowable Costs/Cost Principles requirements in accordance with Uniform Guidance. Questioned Costs: None Recommendation: We recommend AACC implements a policy to properly accrue expenditures into the correct fiscal year. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.
Finding 2024-001 Agency: Department of Labor Program: Apprenticeship State Funds (AL No. 17.285) Material Weakness over Allowable Costs/Cost Principles Repeat Finding: No Condition: For 1 out of 24 selections, the amounts recorded in the SEFA did not match the supporting documentation. For 3 out of 24 selections, there was incomplete supporting documentation provided which was related to unsigned/unapproved subrecipient reimbursement request forms and missing invoices. For 2 out of 24 selections, the amounts recorded were noted to be duplicated and included in the SEFA twice. However, we noted that these costs were not yet billed to the Department of Labor. Criteria: As provided in 2 CFR section 200.403: Factors affecting allowability of costs, except where otherwise authorized by statute, must by adequately documented to be allowable under Federal awards. Cause: AACC received amounts from their subrecipient or vendor to accrue into their SEFA for fiscal year 2024, but did not receive all invoice or receipt documentation to ensure accuracy of the costs.. Effect: AACC was not in compliance with the Allowable Costs/Cost Principles requirements in accordance with Uniform Guidance. Questioned Costs: $85,758.22 Recommendation: We recommend AACC implements a policy to require all subrecipients and vendors to submit complete expenditure documentation within a reasonable timeframe and AACC to properly review the documentation for accuracy and completeness. We also recommend AACC implements a policy to properly track invoices during the accrual and payment process to ensure duplicate entries do not occur.Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.
Assistance Listing Number: 93.193 Name of Federal Program: COVID-19 Urban Indian Health Services Name of Federal Agency: Department of Health and Human Services Award Period: January 1, 2024 – December 31, 2024 Criteria or Specific Requirement: Per 2 CFR Part 200, non-federal entities receiving federal awards must establish and maintain written policies and procedures addressing areas including, but not limited to: procurement (§200.317–§200.327); travel costs (§200.475); methods for avoiding duplication of costs (§200.403); subrecipient monitoring (§200.332); cash management and allowable costs (§200.302, §200.305). Condition: The organization has not implemented all policies and procedures required under the Uniform Guidance. Specifically, certain written policies and procedures required by 2 CFR Part 200, such as cash management, allowability of costs, equipment management, conflict of interest, procurement, travel, compensation, and fringe benefits, were either incomplete, not formally documented, or not in place during the audit period. Cause: The Council has not detailed its policies to conform with the requirements of the Uniform Guidance. Effect or Potential Effect: Without documented and implemented policies and procedures, the organization increases the risk of noncompliance with federal regulations, inconsistent application of requirements, unallowable costs being charged to federal awards, and potential questioned costs or sanctions from funding agencies. Repeat Finding: No Recommendation: Management should develop, formally adopt, and implement all required Uniform Guidance policies and procedures. Policies should be documented, communicated to relevant staff, and periodically reviewed to ensure ongoing compliance. Views of Responsible Officials: Management agrees with the finding and revise its policies and procedures to meet the criteria of the Uniform Guidance.
Assistance Listing Number: 93.193 Name of Federal Program: COVID-19 Urban Indian Health Services Name of Federal Agency: Department of Health and Human Services Award Period: January 1, 2024 – December 31, 2024 Criteria or Specific Requirement: Per 2 CFR Part 200, non-federal entities receiving federal awards must establish and maintain written policies and procedures addressing areas including, but not limited to: procurement (§200.317–§200.327); travel costs (§200.475); methods for avoiding duplication of costs (§200.403); subrecipient monitoring (§200.332); cash management and allowable costs (§200.302, §200.305). Condition: The organization has not implemented all policies and procedures required under the Uniform Guidance. Specifically, certain written policies and procedures required by 2 CFR Part 200, such as cash management, allowability of costs, equipment management, conflict of interest, procurement, travel, compensation, and fringe benefits, were either incomplete, not formally documented, or not in place during the audit period. Cause: The Council has not detailed its policies to conform with the requirements of the Uniform Guidance. Effect or Potential Effect: Without documented and implemented policies and procedures, the organization increases the risk of noncompliance with federal regulations, inconsistent application of requirements, unallowable costs being charged to federal awards, and potential questioned costs or sanctions from funding agencies. Repeat Finding: No Recommendation: Management should develop, formally adopt, and implement all required Uniform Guidance policies and procedures. Policies should be documented, communicated to relevant staff, and periodically reviewed to ensure ongoing compliance. Views of Responsible Officials: Management agrees with the finding and revise its policies and procedures to meet the criteria of the Uniform Guidance.
Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.224 & 93.527 Program: Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: H80CS10606-16-00, H80CS10606-17-04, H80CS10606-17-05, H8GCS48224, H8L50900-01-00, H8NCS53911-01-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.403(e), costs must be in accordance with Generally Accepted Accounting Procedures (GAAP) to be allowable under Federal awards. Condition: During our testing of 2024 costs, we noted that 3 of the 60 payroll transactions selected for testing within the Health Center Program Cluster were incurred in 2023. This practice is not in accordance with GAAP, which require that costs be recorded in the period in which they are incurred. Cause: The Village did not have adequate policies and procedures in place to ensure that federal expenditures are properly accrued and recorded in the fiscal year in which the costs are actually incurred. Effect or Potential Effect: Failure to accrue costs in accordance with GAAP may result in expenditures being materially misstated on the SEFA that could lead to inaccurate reporting to the federal agencies. Questioned Costs: Health Center Program Cluster Known Questioned Costs: $473 Health Center Program Cluster Likely Questioned Costs: $26,444 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Repeat Finding: 2023-001 Recommendation: We recommend Village implement policies and procedures to accrue for federal expenditures in the period the costs were incurred to ensure costs are being recorded in accordance with GAAP and the SEFA is representative of all federal expenditures incurred in the reporting year. Views of Responsible Officials:
Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.224 & 93.527 Program: Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: H80CS10606-16-00, H80CS10606-17-04, H80CS10606-17-05, H8GCS48224, H8L50900-01-00, H8NCS53911-01-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.403(e), costs must be in accordance with Generally Accepted Accounting Procedures (GAAP) to be allowable under Federal awards. Condition: During our testing of 2024 costs, we noted that 3 of the 60 payroll transactions selected for testing within the Health Center Program Cluster were incurred in 2023. This practice is not in accordance with GAAP, which require that costs be recorded in the period in which they are incurred. Cause: The Village did not have adequate policies and procedures in place to ensure that federal expenditures are properly accrued and recorded in the fiscal year in which the costs are actually incurred. Effect or Potential Effect: Failure to accrue costs in accordance with GAAP may result in expenditures being materially misstated on the SEFA that could lead to inaccurate reporting to the federal agencies. Questioned Costs: Health Center Program Cluster Known Questioned Costs: $473 Health Center Program Cluster Likely Questioned Costs: $26,444 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Repeat Finding: 2023-001 Recommendation: We recommend Village implement policies and procedures to accrue for federal expenditures in the period the costs were incurred to ensure costs are being recorded in accordance with GAAP and the SEFA is representative of all federal expenditures incurred in the reporting year. Views of Responsible Officials: