Finding 1181966 (2022-103)

Material Weakness Repeat Finding
Requirement
C
Questioned Costs
-
Year
2022
Accepted
2026-03-23

AI Summary

  • Core Issue: ITCN has a cash deficit of $35,398 and is misusing restricted funds, leading to non-compliance with federal regulations.
  • Impacted Requirements: Non-compliance with 2 CFR §200.305 and 45 CFR §75.305 regarding the management of advance payments and restricted funds.
  • Recommended Follow-Up: ITCN should implement corrective actions outlined in finding 2022-002 to address financial oversight and resource management.

Finding Text

Condition and Context: As noted in finding 2022-002, ITCN had cash deficit in the amount of $35,398, while also reporting a total deferred revenue of $1,187,084 and a due to grantor agency of $269,375. At September 30, 2022, the WIC program is reporting deferred revenues of $289,963 while reflecting an amount loaned to other funds relating to these restricted sources totaling $60,455. Also, at September 30, 2022, the Child Care and Development Block Grant program is reporting deferred revenues of $198,541 while reflecting an amount loaned to other funds relating to these restricted sources totaling $828,529. As a result, ITCN is not in compliance with their contracts governing the use of these restricted funds. Criteria: 2 CFR §200.305 and 45 CFR §75.305, Federal Payment, requires that non-federal entities establish written policies so that advance payments are as close as administratively feasible to the actual disbursements for direct program or project costs. Cause and Effect: The cause is a lack of resources and oversight of the accounting and financial reporting process. The effect is the use of restricted cash to fund other expenses not related to the restricted purpose. Recommendation: We recommend that ITCN implement the recommendations noted in finding 2022-002. Management’s Response: ITCN’s responsible officials’ views and planned corrective action are in its corrective action plan at the end of the report.

Corrective Action Plan

Condition and Context: As noted in finding 2022-002, ITCN had cash deficit in the amount of $35,398, while also reporting a total deferred revenue of $1,187,084 and a due to grantor agency of $269,375. At September 30, 2022, the WIC program is reporting deferred revenues of $289,963 while reflecting an amount loaned to other funds relating to these restricted sources totaling $60,455. Also, at September 30, 2022, the Child Care and Development Block Grant program is reporting deferred revenues of $198,541 while reflecting an amount loaned to other funds relating to these restricted sources totaling $828,529. As a result, ITCN is not in compliance with their contracts governing the use of these restricted funds. Recommendation: The auditors recommended that we implement the recommendations noted in finding 2022-002. Contact Name: Deserea Quintana, Executive Director Corrective Action Planned: ITCN has adopted the corrective actions under Finding 2022-002, with fiscal contractors monitoring compliance. The CFO provides monthly restricted fund reviews. MIP/Microix will add automated cash tracking and prohibit interfund borrowing. Staff training will reinforce cash management best practices. Anticipated Completion Date: The policy was adopted in March 2024. ITCN began to request for reconsideration, including supporting documentation, with grantor agencies with expected completion by December 31, 2025.

Categories

Matching / Level of Effort / Earmarking Cash Management Reporting

Other Findings in this Audit

  • 1181957 2022-101
    Material Weakness Repeat
  • 1181958 2022-101
    Material Weakness Repeat
  • 1181959 2022-101
    Material Weakness Repeat
  • 1181960 2022-101
    Material Weakness Repeat
  • 1181961 2022-102
    Material Weakness Repeat
  • 1181962 2022-102
    Material Weakness Repeat
  • 1181963 2022-102
    Material Weakness Repeat
  • 1181964 2022-102
    Material Weakness Repeat
  • 1181965 2022-103
    Material Weakness Repeat
  • 1181967 2022-104
    Material Weakness Repeat
  • 1181968 2022-104
    Material Weakness Repeat
  • 1181969 2022-105
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.575 CHILD CARE AND DEVELOPMENT BLOCK GRANT $5.78M
93.600 HEAD START $2.25M
10.557 WIC SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN $857,482
93.671 FAMILY VIOLENCE PREVENTION AND SERVICES/DOMESTIC VIOLENCE SHELTER AND SUPPORTIVE SERVICES $797,889
93.047 SPECIAL PROGRAMS FOR THE AGING, TITLE VI, PART A, GRANTS TO INDIAN TRIBES, PART B, GRANTS TO NATIVE HAWAIIANS $616,985
16.841 VOCA TRIBAL VICTIM SERVICES SET-ASIDE PROGRAM $384,493
17.265 NATIVE AMERICAN EMPLOYMENT AND TRAINING $320,227
11.029 TRIBAL BROADBAND CONNECTIVITY PROGRAM $288,819
93.054 NATIONAL FAMILY CAREGIVER SUPPORT, TITLE VI, PART C, GRANTS TO INDIAN TRIBES AND NATIVE HAWAIIANS $230,319
15.029 TRIBAL COURTS $155,448
66.926 INDIAN ENVIRONMENTAL GENERAL ASSISTANCE PROGRAM (GAP) $125,314
16.587 VIOLENCE AGAINST WOMEN DISCRETIONARY GRANTS FOR INDIAN TRIBAL GOVERNMENTS $99,977
10.558 CHILD AND ADULT CARE FOOD PROGRAM $81,884
93.044 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART B, GRANTS FOR SUPPORTIVE SERVICES AND SENIOR CENTERS $15,741
93.053 NUTRITION SERVICES INCENTIVE PROGRAM $14,147
93.391 ACTIVITIES TO SUPPORT STATE, TRIBAL, LOCAL AND TERRITORIAL (STLT) HEALTH DEPARTMENT RESPONSE TO PUBLIC HEALTH OR HEALTHCARE CRISES $3,919
93.071 MEDICARE ENROLLMENT ASSISTANCE PROGRAM $3,793