Finding Text
Criteria: According to the Uniform Guidance, recipients must submit a data collection form (DCF)
that states whether the audit was completed and provide information about the auditee, its federal
programs, and the results of the audit submitted within the earlier of 30 days after receipt of the
auditor’s report, or nine months after the end of the audit period.
Condition: During our audit, we noted that the DCF for the reporting period ended June 30, 2023 was
not filed with the Federal Audit Clearinghouse timely.
Cause: The late filling was primarily due to significant turnover in the senior management team,
including the departure of the Chief Financial Officer (CFO) and several key accounting personnel
during the critical period for year-end closing and reporting. This turnover led to a temporary gap
in leadership and expertise, causing delays in the finalization and review of the financial
statements.
Effect: The delay in filling resulted in non-compliance with regulatory requirements, this could
impact affect future funding from various agencies.
Questioned Costs: None noted.
Context: This was a condition noted per review of MercyFirst’s compliance with the reporting
requirements.
Recommendation: We recommend that the MercyFirst implements a more robust succession and
contingency planning process to ensure continuity in its financial reporting and management
functions. This could include cross-training of personnel, maintain up-to-date documentation of
financial processes, and establishing interim leadership roles to be filled in the event of
unexcepted departures. Furthermore, the entity should consider engaging interim financial
management support to bridge any gaps during periods of transition.
Views of Responsible Officials: MercyFirst agrees with the finding identified. MercyFirst’ response
to the finding is described in the accompanying management’s correction action plan.