FAC Explorer

Finding 1163388 (2022-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2025-12-03
Audit: 372935
Organization: CUMAC/ECHO, Inc. (NJ)
Auditor: CULLARI CARRICO LLC

AI Summary

  • Core Issue: The organization lacks adequate controls for preparing the Schedule of Expenditures of Federal Awards and State Financial Assistance, leading to potential allocation errors.
  • Impacted Requirements: Expenditures are not directly mapped from the accounting system, making it difficult to trace individual expenses and understand grant sources.
  • Recommended Follow-Up: Implement sub-classes in accounting software or acquire specialized non-profit software to improve program allocation tracking and ensure compliance.

Finding Text

2022-001: Finding --- Inadequate controls regarding preparation of the Schedule of Expenditures of Federal Awards and State Financial Assistance. Criteria --- There was no direct mapping of expenditures from the Organization’s accounting system to the Schedule of Expenditures of Federal Awards and State Financial Assistance by program. Condition --- The Organization did not understand the source of some of its grants and did not have a method to distinguish its programs other than through excel, where individual transactions were not detailed. Context --- During the audit, it was noted that individual expenses were not traceable to the Schedule of Expenditures of Federal Awards and State Financial Assistance and additional analysis needed to be performed to obtain comfort over the expenditure amounts presented. Effect --- Allocation errors may exist that may not be remediated timely enough for a budget modification if one is needed. There is a risk that non-allowable or other program expenditures could be charged to the contract. Cause --- Financial procedures and knowledge of the source and nature of government funding were not robust enough to address the rapid increase in federal awards and state financial assistance received by the organization. Recommendation --- The Organization should implement sub-classes within their current software or purchase an accounting software specific for non-profit use, which utilizes sub-classes and program allocations. Management response --- Management will continue to enhance the internal structure of the chart of accounts to maintain full transparency. Management will contact governmental agencies upon receipt of contracts to determine the source and requirements of each award.

Corrective Action Plan

Finding --- Inadequate controls regarding preparation of the Schedule of Expenditures of Federal Award and State Financial Assistance. Corrective action – Management will continue to enhance the internal control structure and improve the chart of accounts to maintain full transparency and implement sub classes within the current software. Status --- Corrective action in progress. Completion date --- Before December 31, 2025 Contact --- Laura Purdy, COO Contact phone --- (973) 742-5518 Contact address --- 223 Ellison St., Paterson, New Jersey 07505

Categories

Procurement, Suspension & Debarment Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 1163384 2022-001
    Material Weakness Repeat
  • 1163385 2022-002
    Material Weakness Repeat
  • 1163386 2022-003
    Material Weakness Repeat
  • 1163387 2022-004
    Material Weakness Repeat
  • 1163389 2022-002
    Material Weakness Repeat
  • 1163390 2022-003
    Material Weakness Repeat
  • 1163391 2022-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.391 ACTIVITIES TO SUPPORT STATE, TRIBAL, LOCAL AND TERRITORIAL (STLT) HEALTH DEPARTMENT RESPONSE TO PUBLIC HEALTH OR HEALTHCARE CRISES $149,740
93.658 FOSTER CARE TITLE IV-E $78,295
93.569 COMMUNITY SERVICES BLOCK GRANT $77,875
14.267 CONTINUUM OF CARE PROGRAM $45,726
97.024 EMERGENCY FOOD AND SHELTER NATIONAL BOARD PROGRAM $21,255