Finding 1206470 (2024-001)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2026-04-13

AI Summary

  • Core Issue: There is a significant deficiency in internal controls over compliance, specifically regarding timely submission of financial reports.
  • Impacted Requirements: The Organization failed to submit two Period Expense Reports (PERs) on time, missing the 15-day deadline after month-end.
  • Recommended Follow-Up: Management should emphasize the importance of timely reporting and utilize notification tools to ensure deadlines are met; improvements are planned with the transition to an in-house finance department in January 2025.

Finding Text

Finding 2024-001: Significant Deficiency - Internal Control Over Compliance Grantor: Corporation for National and Community Service Federal Assistance Listing Number: 94.006 Federal Program Name: AmeriCorps State and National Pass-Through Entity: State of Connecticut Office of Higher Education Pass-Through Entity Identifying Number: 12060-DHE66530-20333-81001-174364 Criteria: Management is responsible for the design, implementation and operation of controls over compliance including those related to reporting requirements. Reporting requirements are determined by the grantors and specified within each grant document. Condition/Context: The Organization has various contracts with the pass-through entity, each of which includes various programmatic and financial reporting requirements. Among these requirements is a monthly Period Expense Report (PER) that must be submitted within 15 days after month-end. During our audit, we identified two PERs out of a sample of 6 reports, for the month of September 2024, that were submitted 25 days and 17 days after month-end, respectively. The sample was not a statistically valid sample. Cause: Financial information necessary to complete the PERs was not available in time to meet the filing deadlines. Effect: Two PERs for the month of September 2024 were filed late. Questioned Costs: None. Recommendation: We recommend that Management stress to its staff the importance of timely reporting and encourage them to utilize all notification / reminder tools available to them to ensure that filing deadlines are being actively tracked, managed and met. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the above finding. Effective January 2025, the Organization has transferred all accounting and finance responsibilities to an in-house finance/accounting department. As a result of this transition, reporting is handled by a central group with consistent reporting processes and procedures as well as improved internal notification tools to help track and manage financial reporting.

Corrective Action Plan

Effective January 2025, Catalyst CT, Inc. transferred all accounting and finance functions in-house after terminating a contract with a third-party accounting firm. The in-house transition process was completed in phases, commencing in October 2023 with the hiring of a VP of Finance (CFO equivalent) who reviewed the in-place accounting/finance model. Based on the review, an in-house Controller was hired in March 2024, and a Staff Accountant was hired in December 2024. Transitioning of financial report preparation in-house began in the March 31, 2024 reporting period with a goal of having all reporting transferred in-house by year-end. As a result of this transition, reporting is handled by a central group of finance/accounting associates with consistent processes as well as improved internal notifications, including a Grant Cover Sheet, a Grant Cover Sheet Budgets spreadsheet and regular spend rate meetings with relevant senior program directors. Regarding this particular finding, until the end of year 2024, many past reports were a few days to a few weeks overdue because monthly/quarterly books weren’t typically closed by the third-party accountants until at least the third week of the following month. This is not atypical, a monthly closing date within 15 days is usually an exception rather than a rule. Furthermore, most of our grantors were not flummoxed by this. Those who had issues with reporting past the 15th would usually communicate this to us and we would arrange to provide estimated figures by the 15th. Given the nature of our grants, the newly formed in-house accounting group, as of January 1, 2025 has expedited the closing process to occur before the 15th of each month, allowing Catalyst CT, Inc. to meet reporting deadlines with that deadline to be more easily met.

Categories

Subrecipient Monitoring Reporting Significant Deficiency Internal Control / Segregation of Duties

Programs in Audit

ALN Program Name Expenditures
94.006 AMERICORPS STATE AND NATIONAL 94.006 $295,523
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $267,740
84.010 TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES $252,845
93.958 BLOCK GRANTS FOR COMMUNITY MENTAL HEALTH SERVICES $245,722
93.788 OPIOID STR $181,931
16.753 CONGRESSIONALLY RECOMMENDED AWARDS $174,203
84.425 EDUCATION STABILIZATION FUND $106,897
84.215 INNOVATIVE APPROACHES TO LITERACY; PROMISE NEIGHBORHOODS; FULL-SERVICE COMMUNITY SCHOOLS; AND CONGRESSIONALLY DIRECTED SPENDING FOR ELEMENTARY AND SECONDARY EDUCATION COMMUNITY PROJECTS $86,061
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $63,215
93.243 SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE $23,762