Finding 1220231 (2025-005)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2025
Accepted
2026-06-29

AI Summary

  • Core Issue: The Organization lacks updated internal control documentation and relies too much on third-party reporting.
  • Impacted Requirements: Clear job responsibilities and segregation of duties are not properly defined, risking inaccurate financial statements.
  • Recommended Follow-Up: Maintain and regularly update a document outlining current procedures and ensure formal review of third-party work.

Finding Text

Finding No.: 2025-005 Federal Agency: Aging Cluster (93.044, 93.045, 93.053) and Medicaid Cluster (93.778) Criteria In order for an Organization’s system of internal controls to function properly, it is essential that there be clear definitions of job responsibilities. Assignment of responsibilities should include the appropriate segregation of duties in order to ensure proper control. Also, personnel within the Organization should be cross-trained to ensure that in the event that an employee leaves the Organization, there would be another employee prepared to take on the responsibilities. Such responsibilities should be formally documented in a policies and procedures manual. Conditions Found During audit procedures, it was noted that the Organization had trouble producing internal control procedure documents that had been updated for the period under audit. The Organization also relies heavily on a third party to produce quarterly and annual reporting. Cause The Organization lacks updated and proper documentation around policies and procedures and lacks formal review of third party information. Effect The SEFA and financial statements could be inaccurately presented. Context This issue was identified during our audit procedures and was noted across multiple areas. Repeat Finding Yes. Reported as Finding No. 2024-003. Questioned Costs None. Recommendation We recommend a document be maintained and regularly updated to reflect the current procedures, policies, roles and responsibilities in place. In addition, there should be formal documented review and approval by someone in the Organization of the work produced by the third party to ensure any errors or omissions in financial information are caught. Views of Responsible Officials See attached corrective action plan

Corrective Action Plan

Finding Reference Number: 2025-05 View of Responsible Official and Planned Corrective Action Date: Corrective Action: Management recognizes the importance of maintaining current written policies and procedures, clearly defined job responsibilities, appropriate segregation of duties, and documented review controls over financial reporting. The Organization will take corrective action to strengthen internal control documentation, reduce reliance on informal processes, and ensure that information prepared by third-party service providers is reviewed and approved by management before use in quarterly reporting, annual reporting, the SEFA, and the financial statements. l. The Organization will update and maintain a fom1al policies and procedures manual that documents key accounting, grant management, financial reporting, and SEFA preparation processes. The manual will identify responsible positions, required approvals, review procedures, supporting documentation requirements, and backup responsibilities. Management will also evaluate current duties and implement additional segregation of duties where practical. Where staffing limitations prevent full segregation, compensating review controls will be documented and performed by management. 2. Management will document the established review process for all quarterly and annual reports prepared by third-party service providers. This review will include reconciliation to internal accounting records, verification of significant assumptions and supporting schedules, and evidence of management approval prior to submission or inclusion in the financial statements. 3. Finance personnel will be cross-trained on critical accounting, grant reporting, and SEFA responsibilities to ensure continuity of operations if key employees are unavailable or leave the Organization. Name of Contact Person: Susan Phelps, Finance Director Projected Completion Date: September 30, 2026

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1220218 2025-002
    Material Weakness Repeat
  • 1220219 2025-005
    Material Weakness Repeat
  • 1220220 2025-002
    Material Weakness Repeat
  • 1220221 2025-005
    Material Weakness Repeat
  • 1220222 2025-002
    Material Weakness Repeat
  • 1220223 2025-005
    Material Weakness Repeat
  • 1220224 2025-002
    Material Weakness Repeat
  • 1220225 2025-005
    Material Weakness Repeat
  • 1220226 2025-002
    Material Weakness Repeat
  • 1220227 2025-005
    Material Weakness Repeat
  • 1220228 2025-002
    Material Weakness Repeat
  • 1220229 2025-005
    Material Weakness Repeat
  • 1220230 2025-002
    Material Weakness Repeat
  • 1220232 2025-001
    Material Weakness Repeat
  • 1220233 2025-003
    Material Weakness Repeat
  • 1220234 2025-004
    Material Weakness Repeat
  • 1220235 2025-001
    Material Weakness Repeat
  • 1220236 2025-003
    Material Weakness Repeat
  • 1220237 2025-004
    Material Weakness Repeat
  • 1220238 2025-001
    Material Weakness Repeat
  • 1220239 2025-003
    Material Weakness Repeat
  • 1220240 2025-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.044 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART B, GRANTS FOR SUPPORTIVE SERVICES AND SENIOR CENTERS $200,761
93.053 NUTRITION SERVICES INCENTIVE PROGRAM $100,171
93.778 GRANTS TO STATES FOR MEDICAID $80,400
93.071 MEDICARE ENROLLMENT ASSISTANCE PROGRAM $64,255
93.052 NATIONAL FAMILY CAREGIVER SUPPORT, TITLE III, PART E $56,643
10.561 STATE ADMINISTRATIVE MATCHING GRANTS FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM $51,844
93.779 CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS) RESEARCH, DEMONSTRATIONS AND EVALUATIONS $35,539
93.324 STATE HEALTH INSURANCE ASSISTANCE PROGRAM $30,599
93.045 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART C, NUTRITION SERVICES $18,904
93.568 LOW-INCOME HOME ENERGY ASSISTANCE $7,445
93.041 SPECIAL PROGRAMS FOR THE AGING, TITLE VII, CHAPTER 3, PROGRAMS FOR PREVENTION OF ELDER ABUSE, NEGLECT, AND EXPLOITATION $4,188
10.182 PANDEMIC RELIEF ACTIVITIES: LOCAL FOOD PURCHASE AGREEMENTS WITH STATES, TRIBES, AND LOCAL GOVERNMENTS $2,000
93.043 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART D, DISEASE PREVENTION AND HEALTH PROMOTION SERVICES $1,529