Finding Text
Finding: Late and inaccurate reporting. Criteria: Reporting Per the Office of Management and Budget Compliance Supplement (2 CFR Part 200, Appendix XI), reporting is a relevant compliance requirement for the Unaccompanied Children Program cluster. Per the Supplement, the recipient is required to submit FFR SF 425 (Standard Form Federal Financial Reports) quarterly. Per the FFR report instructions, quarterly and semi-annual reports are due no later than 30 days after each reporting period. An annual FFR SF 425 is due 90 days after each budget period. Condition, Context, and Cause : During our audit, we tested seven of ten SFR 425 filings. We obtained copies of the reports submitted from the Organization to determine if the reports were prepared in accordance with the required accounting basis and if all applicable amounts were reported. We noted five of seven reports tested were not filed by the applicable deadlines. We attempted to trace amounts reported per the SF 425s to the accounting records to support the audited financial statements and Schedule of Federal Awards but identified several discrepancies detailed below. Line 10a Cash Receipts should represent all drawdown requests on a cumulative basis from the start of the project period through the quarter being reported on. Four of seven reports tested agreed to underlying support without exception or with trivial differences. One of seven reports tested (Home Study and Post Release for the period ended 12/31/23) improperly excluded one cash draw of $596,136 which was deposited to the Organization’s bank statement on 12/28/23. One of seven reports tested (Home Study and Post Release for the period ended 6/30/24) reported cash draws of approximately $9.7M representing amounts drawn only in 2024 Q2 (4/1/24-6/30/24). Actual cumulative draws spanning from the beginning of the project period January 1, 2024 through June 30, 2024, were approximately $18.9M. One of seven reports tested (Residential Shelter Services for the Period ended 12/31/23) reported cash draws of approximately $44.4M. This report improperly excluded one cash draw of $3,789,827 which was deposited to the Organization’s bank statement on 12/28/23. An additional immaterial understatement of cash draws per the SFR 425 of $25,000 was identified. Line 10b Cash Disbursements per the SFR should represent the cumulative amount of Federal Fund Disbursements as of the reporting period end date. Disbursements are the sum of actual cash disbursements for direct charged for good and services, and amount of indirect expense charged to the award, and any amount of cash advances and payments made to subrecipients and contractors. Line 10e Federal Share of Expenditures per the SFR for reports prepared on an accrual basis expenditures are the sum of cash disbursements for direct charges for property and services; the amount of indirect expense incurred; and the net increase or decrease in the amounts owed by the recipient for (1) goods and other property received; (2) services performed by employees, contractors, subrecipients, and other payees; and (3) programs for which no current services or performance are required. For seven of seven reports selected, we were unable to agree amounts reported per SFR 425 Lines 10b and 10e to general ledger reports. In all cases, the cash disbursements and deferral share of expenditures were reported as being equal to federal draws. As previously discussed throughout the report, the Organization was not properly tracking these amounts throughout the period to ensure proper reporting.