Finding Text
2025-005 – Hearts for the Invisible Charlotte Coalition did not consistently maintain documentation of review and approval in accordance with established policies. Federal Agency: Department of the Treasury Assistance Listing Number: 21.027 Award Period: 05/01/2023 to 04/30/2026 Type of Finding: Significant Deficiency in Internal Controls Over Compliance for Each Major Program Criteria or Specific Requirement: In accordance with 2 CFR § 200.303, non-Federal entities are required to establish and maintain effective internal controls over Federal awards and ensure that established policies and procedures are consistently followed. Controls should provide appropriate review, approval, oversight, and documentation over transactions charged to Federal awards. Condition: During our audit, we noted that the Organization did not consistently maintain documentation demonstrating that review and approval controls established by its policies were performed. Specifically, independent Board/Treasurer oversight over expenditure was not in place until the middle of 2025. Formal timesheets supporting employee time were not implemented until end of October 2025. Questioned Costs: None Context: The deficiency relates primarily to the documentation and evidence of review and approval controls during portions of 2025. Board/Treasurer oversight was implemented during the middle of the year, and formal timesheets were implemented on October 27, 2025, to strengthen payroll documentation. Cause: The Organization did not consistently implement and document the review and approval controls established by its policies during the audit period. Effect: The lack of documented review and approval increases the risk that errors or noncompliance may not be timely prevented or detected. Repeat Finding: Yes Auditor’s Recommendation: We recommend that the Organization consistently implement and document the review and approval controls established by its policies, including continued Board/Treasurer oversight over expenditures. We also recommend continued use of formal timesheets to document and support employee time. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the finding and agrees with the recommendation. The Organization implemented Board/Treasurer oversight during the middle of 2025 and formal timesheets effective October 27, 2025. Management will continue to maintain documented review and approval controls and utilize formal timesheets to support payroll activity.