Finding 1131340 (2023-006)

Material Weakness
Requirement
I
Questioned Costs
-
Year
2023
Accepted
2025-04-11
Audit: 353459
Organization: Lincoln Hall (NY)
Auditor: Bdo USA PC

AI Summary

  • Core Issue: Lincoln Hall failed to allocate shared costs monthly, leading to difficulties in identifying federal program procurement transactions.
  • Impacted Requirements: Non-compliance with procurement policies, specifically the need for bids on contracts over $5,000.
  • Recommended Follow-Up: Implement monthly cost allocations and ensure adherence to bidding requirements to improve financial reporting and compliance.

Finding Text

Finding Number: 2023-006 Procurement and Suspension and Debarment (Material Weakness) Information on Federal Program: U.S. Department of Health and Human Services ALN Number: 93.676 ALN Name: Unaccompanied Alien Children Program Contract Period: 07/01/2022 - 6/30/2023 Criteria: The Uniform Guidance Section §200.317 states that the same policies and procedures used for procurements with non-federal funds must be followed when conducting procurement transactions under a federal award. Condition: During our audit, we noted that management’s method of allocating shared costs is performed after the fiscal year has ended, instead of performing timely allocations monthly throughout the fiscal year. Due to this allocation approach we were unable to obtain the procurement transactions that pertain only to the federal program during the year for our procurement policy testing population. Therefore, we selected 10 samples from all transactions during the fiscal year based on Lincoln Hall’s procurement policy thresholds. Additionally, out of the 10 vendors selected for testing, we noted that no bids were performed for one of the vendors who was contracted for projects costing over $5,000, which is the threshold that requires 2 bids per Lincoln Hall’s procurement policy. Questioned Costs: Not determinable. Context: This is a condition identified per our compliance testing of procurement. Repeat Finding: This is not a repeated finding. Cause: Bidding and procurement requirements were not met due to the turnover at Lincoln Hall as well as system limitations on allocations. Effect or Potential Effect: We were unable to identify the procurement transactions that pertain only to the federal program and therefore, we were unable to conclude whether awards for this program were used for purchases subject to the procurement policy in place. We were able to observe and conclude that Lincoln Hall did not comply with the procurement requirements for certain vendors contracted during the year. Recommendation: The inability to generate financial statements that incorporate the federal and state agency cost allocations prevents Lincoln Hall from presenting functionally accurate interim financial statements. We recommend that these costs be properly allocated on a monthly basis within Lincoln Hall’s general ledger system. Allocating these costs regularly will allow Lincoln Hall to submit accurate and substantiated interim financial data to its funding sources. Additionally, properly tracking and allocating costs on a monthly basis will prevent a material reallocation of costs by function at year-end. Management should comply with the bidding and procurement policies in place for all vendors and contracts conducted. Views of Responsible Official: Lincoln Hall agrees with the finding. Lincoln Hall continues to take steps to improve this process. See Lincoln Hall’s further response to this finding as described in the accompanying management’s planned corrective actions, Appendix A.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 554893 2023-001
    Material Weakness Repeat
  • 554894 2023-002
    Material Weakness
  • 554895 2023-003
    Material Weakness Repeat
  • 554896 2023-004
    Material Weakness Repeat
  • 554897 2023-005
    Material Weakness Repeat
  • 554898 2023-006
    Material Weakness
  • 1131335 2023-001
    Material Weakness Repeat
  • 1131336 2023-002
    Material Weakness
  • 1131337 2023-003
    Material Weakness Repeat
  • 1131338 2023-004
    Material Weakness Repeat
  • 1131339 2023-005
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.676 Unaccompanied Children Program $11.60M
10.555 National School Lunch Program $133,232
10.553 School Breakfast Program $48,783