Finding 1149560 (2024-002)

Material Weakness
Requirement
B
Questioned Costs
$1
Year
2024
Accepted
2025-08-08

AI Summary

  • Core Issue: There is a significant lack of segregation of duties due to the Executive Director performing tasks of the unfilled business manager, leading to potential errors in cash disbursements.
  • Impacted Requirements: This situation violates strong internal control criteria, which require that financial transactions be reviewed by someone other than the preparer to prevent ineligible expenses from being charged to federal grants.
  • Recommended Follow-Up: Implement additional controls and hire more staff to ensure proper review and reconciliation of accounting records, confirming that all expenses charged to federal awards are allowable and eligible.

Finding Text

Lack of Segregation of Duties - Lack of Supervisory Review - Allowability of Expenses Charged to Grants Temporary Assistance for Needy Families (93.558); Social Services Block Grant (93.667): and Emergency Solutions Grant (14.231) Finding Type : Material Non Compliance and Material Weakness in Internal Control Over Compliance. Condition: The business manager position went unfilled for a significant portion of the year. The Executive Director undertook the tasks previously performed by the business manager. This created an inherent lack of segregation of duties where individual cash disbursements authorized and processed by the executive director could contain errors and not be detected on a timely basis by others. Additionally, when a business manager was on staff, the Executive Director served in a supervisory role, reviewing the federal award program cash disbursements processed by the business manager to ensure they were allowable and eligible. During the testing of cash disbursements charged to the major award programs, invoices supporting $6,725 of the total sampled amount of $36,660 could not be located. While disbursement were traced to copies of the checks made payable to the vendor, the allowability and eligibility of $6,725 of the sample population could not be tested. When the sample results are projected to the total major award population of vendor disbursements, projected questioned costs are $72,536. Questioned Costs: When the sample results are projected to the total major award population of vendor disbursements, projected questioned costs are $72,536 Criteria: Strong internal controls suggest that the same person does not have control over both cash and the records that pertain to cash. Additionally, all financial transactions and reconciliations should be reviewed for completeness and accuracy by someone other than the preparer. This segregation of duties and supervisory review provide better assurance that ineligible or unallowable expenses are not accidently charged to, and reimbursed b, the federal grant programs. Effect: A lack of segregation of duties and supervisory review can result in errors occurring in the processing of cash disbursements. These factors could results in expenses being charged to the grants program that are not allowable or eligible. Cause: The condition is a result of the accounting records not being prepared, reviewed, or reconciled by someone ither than the sole person preparing and approving the transactions and the related financial records. Recommendation: Additional controls and policies should be implemented to ensure that all related accounting records are reviewed and reconciled by someone other than the preparer to ensure that expenses charged to the federal award programs are allowable and eligible. . Additional staff should be hired to provide those controls View of Responsible Officials: Management and the Board of Directors recognized the lack of a business manager as a concern and have hired a new business manager as of the opinion date.

Categories

Questioned Costs Eligibility Internal Control / Segregation of Duties Allowable Costs / Cost Principles Material Weakness

Other Findings in this Audit

  • 573115 2024-002
    Material Weakness
  • 573116 2024-002
    Material Weakness
  • 573117 2024-002
    Material Weakness
  • 573118 2024-002
    Material Weakness
  • 573119 2024-002
    Material Weakness
  • 573120 2024-002
    Material Weakness
  • 1149557 2024-002
    Material Weakness
  • 1149558 2024-002
    Material Weakness
  • 1149559 2024-002
    Material Weakness
  • 1149561 2024-002
    Material Weakness
  • 1149562 2024-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.558 Temporary Assistance for Needy Families $566,581
93.667 Social Services Block Grant $273,089
93.550 Transitional Living for Homeless Youth $237,917
93.623 Basic Center Grant $190,567
93.557 Education and Prevention Grants to Reduce Sexual Abuse of Runaway, Homeless and Street Youth $146,918
14.267 Continuum of Care Program $138,714
14.231 Emergency Solutions Grant Program $19,632