Finding Text
Unaccompanied Alien Children – AL #93.676, Controls over Compliance (Material Weakness) Condition In our testing of the Unaccompanied Children Program, we noted several compliance matters as noted in findings 2025-001 and 2025-002 that stem in part from either a failure of or a lack of controls to prevent, or detect and correct, matters for Federal awards. Many of the errors seem to stem from the entity’s use of manual spreadsheets to complete many allocations, communication issues between program managers and financial personnel, and errors that were not noted and corrected in a timely manner. As a result of a lack of strong controls, the budget was exceeded, unallowed items were reimbursed, and amendments were not requested promptly for budget overages. There were also identified errors with the current year and prior year Schedule of Expenditures of Federal Awards that were not timely identified. Criteria Strong controls over Federal programs are necessary to ensure that fund are used appropriately, managed appropriately internally and accurate reporting is maintained that can be made available to all interested parties within the entity and to the grantor as required. Grantee entities are to be responsible stewards of funds and should have strong monitoring and controls in place to ensure that is met. Cause Errors in understanding allowable amounts per child, errors in understanding allowable items, lack of controls and processes to monitor gift cards, over-reliance on many manual processes and spreadsheets, and lack of communication appears to be creating some disconnect and issues that is allowing this breakdown in monitoring and reporting to occur. Effect As a result of the control concerns, we do believe that a larger error or several smaller issues that total a larger error could occur and not be timely noted and/or corrected by the entity. Recommendation We recommend enCircle work on controls that put in place monitoring over program usage of funds by independent individuals to verify gift cards, and other similar items are being appropriately monitored. We also recommend that enCircle investigate whether their current accounting system can help with the allocation of personnel and invoices across programs so there is less reliance on manual processes and journal entries. Additionally, we recommend that stronger monitoring and review processes be put in place for all programs to ensure budgetary and reporting compliance.View of Responsible Officials and Planned Corrective Action enCircle believes the measures taken for 2025-001 and 2025-002 are sufficient to address this finding. Further the measures taken for 2025-003 alleviate control and reporting issues related to the Schedule of Expenditures of Federal Awards. Finally, enCircle on top of already occurring monthly program financial reviews is adding a monthly budget review for each federal grant with the programmatic staff.