Finding 1172382 (2025-001)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2025

Accepted

2026-02-04

Audit: 385435

Organization: Urban League of Greater Chattanooga (TN)

Auditor: HOSKINS & COMPANY

AI Summary

Answer: The Urban League's method for handling indirect costs is lacking and needs better controls.
Trend: There is a risk of misallocation since there's no system to verify if indirect costs align with federal and state program charges.
List: Recommend establishing a process to ensure indirect costs are accurately tracked and justified for reimbursement.

Finding Text

The Urban League of Greater Chattanooga’s process for allocating indirect costs to programs where indirect costs are reimbursable needs improvement. There is no process to prevent or detect if the indirect cost pool costs support the amounts charged to federal and state programs.

Corrective Action Plan

Effective immediately, ULGC will seek to engage an external financial consultant to provide formal training under the direction of Reginald F. Smith II, President and CEO. Training will be targeted to the accounting team, including the Director of Accounting, and will focus on GAAP compliance, timely month-end closing procedures, grant revenue recognition, indirect cost allocation, accurate cash application to accounts receivable, and SEFA preparation.

Other Findings in this Audit

1172383 2025-003

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
84.425	EDUCATION STABILIZATION FUND	$1.71M
21.019	CORONAVIRUS RELIEF FUND	$490,624
17.235	SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM	$383,369
21.009	VOLUNTEER INCOME TAX ASSISTANCE (VITA) MATCHING GRANT PROGRAM	$240,772
84.287	TWENTY-FIRST CENTURY COMMUNITY LEARNING CENTERS	$237,223