Finding Text
Finding 2024-002 Noncompliance with Federal and State Reporting Requirements Assistance Listing Numbers 21.027 Coronavirus State and Local Fiscal Recovery Funds 93.958 Block Grants for Community Mental Health Services Federal Agency U.S. Department of Treasury U.S. Department of Health and Human Services and Award Number/Year 2024 Criteria C4 has grant agreements from Federal agencies and State of Illinois agencies with terms requiring compliance with financial reporting requirements in accordance with Uniform Guidance and the State of Illinois Grant Accountability and Transparency Act (GATA). As such, for the year ended June 30, 2024, C4 is required to submit audited financial statements, a schedule of expenditures of federal awards (SEFA) and single audit reports to the Federal Audit Clearinghouse and the same audit package plus a Consolidated Year End Financial Report (CYEFR) to the GATA portal. All items are required to be submitted to the GATA portal within six (6) months after C4’s fiscal year end and to the Federal Audit Clearinghouse within nine (9) months after C4’s fiscal year end. Condition C4 did not submit its audited financial statements, SEFA and CYEFR and other required information to the Federal Audit Clearinghouse and GATA portal by the required due dates. Cause This condition was due to several factors including significant staff turnover during fiscal years 2023 and 2024 resulting in the accounting and finance function being understaffed. As such, there was a delay in completing the recording of year end financial transactions, performing account reconciliations and preparing financial reports for fiscal year 2024 as needed for the audit. Effect The effect is that controls over the financial reporting process were weakened thereby increasing the risk that material misstatements could be included in the financial statements without management being aware. Additionally, noncompliance with financial reporting deadlines could cause funding sources for C4 to suspend funding until compliance is achieved. Questioned Costs None noted. Recommendation We recommend that management evaluate its personnel needs within the accounting and finance function to ensure that it has the appropriate number of personnel to ensure that all required accounting duties are being performed effectively and in a timely manner. We further recommend that current accounting personnel establish a schedule of completing the recording all financial transactions and preparation of account reconciliations and financial reports, including a CYEFR and a SEFA, at fiscal year end in a timely manner for review by management and the board of directors. Lastly, we recommend that these procedures be included in an updated set of financial policies and procedures that are reviewed and approved by the board of directors. Management Response See corrective action plan.