Finding 1084417 (2023-002)

2023-002 Twenty-First Century Community Learning Centers – Assistance Listing No. 84.287 Significant Deficiency in Internal Control Over Compliance – Appropriate Monitoring of Levels of Federal Funding Criteria: 2 CFR §200.501 Audit Requirements, establishes that a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of the Uniform Guidance. Condition and Context: The Organization did not have procedures in place to timely identify that federal expenditures for the year ended December 31, 2023, exceeded $750,000 and that an audit in accordance with the provisions of Uniform Guidance was required. However, an audit firm was ultimately engaged to perform the applicable audit prior to the deadline for submission. Cause and Effect: The deficiency in internal control over compliance could lead to the failure to comply with audit requirements under the Uniform Guidance. Recommendation: The Organization should implement policies and procedures to periodically monitor federal funding and expenditure levels throughout the year to ensure a level of awareness regarding whether an audit under the Uniform Guidance may be applicable for the current year. In addition, the Organization should prepare a schedule of federal expenditures (SEFA) as part of its year-end closing process, which reconciles to the general ledger. The SEFA and data used to prepare the SEFA should be reviewed by a separate individual within the Organization with knowledge of the related reporting requirements, as outlined in the Uniform Guidance, to ensure its accuracy and completeness. The schedule should be used to determine whether an audit in accordance with the provisions of the Uniform Guidance is required so that an auditor may be engaged to perform a timely audit. Views of Responsible Officials and Planned Corrective Action: We agree with the recommendation and plan to have the corrective action implemented by December 31, 2024. Boys & Girls Club of Huntington Finance Board Subcommitee discusses this item throughout the fiscal year and is in the Board minutes, but has not put a written policy in place. A policy will be created by the Finance Board Subcommittee at the October meeting, presented to the full Board or Directors at the November Board meeting and voted on at the December 2024 Board meeting.