FAC Explorer

Finding 37079 (2022-002)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-09-13
Audit: 34926
Organization: Kind INC (DC)
Auditor: Rsm US LLP

AI Summary

  • Core Issue: The Organization failed to include a federal grant in the Schedule of Expenditures of Federal Awards (SEFA), leading to noncompliance with federal regulations.
  • Impacted Requirements: This oversight violates 2 CFR Part 200.510(b), which mandates accurate reporting of all federal awards and compliance with federal guidelines.
  • Recommended Follow-Up: Management should establish clear policies and procedures to ensure all federal grants are properly identified and reported in future SEFAs.

Finding Text

Finding No. 2022-002: Incomplete Schedule of Expenditures of Federal Awards?Material Weakness and Material Noncompliance U.S Department of State (19.518) Overseas Refugee Assistance Programs for Western Hemisphere passed through from Asylum Access Criteria: 2 CFR Part 200.510 (b) requires that the Organization must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR Part 200.502. In a proper system of internal controls, the Organization is required to have procedures in place that correctly identify federal grants which are required to follow the compliance requirements of 2 CFR Part 200. Cause: The Organization did not properly identify a grant under Assistance Listing Number (ALN) 19.518 as being required to follow the requirements of 2 CFR Part 200 and, as a result, the initial SEFA omitted expenditures received under this grant. Condition: During our audit, we identified a grant under ALN 19.518 that is required to comply with the applicable requirements of 2 CFR Part 200 and thus should have been included in the SEFA. Effect: The Organization did not properly identify the applicability of 2 CFR Part 200 and thus a grant was improperly omitted from the initial SEFA. Once this grant was properly included, the Organization exceeded $750,000 in qualifying federal expenditures thus meeting the requirement for a Uniform Guidance audit to be required. Questioned costs: None Context: The Organization did not have a proper set of internal controls in place to appropriately identify the applicability of 2 CFR Part 200 to all federal awards. Repeat Finding?: No Recommendation: We recommend that management implement policies and procedures to evaluate all grants received to identify federal funding. Views of responsible officials: The Organization agrees with the finding. See corrective action plan.

Corrective Action Plan

CORRECTIVE ACTION PLAN YEAR ENDED DECEMBER 31, 2022 Finding No. 2022-002: Incomplete Schedule of Expenditures of Federal Awards- Material Weakness and Material Noncompliance Finding: During our audit, we identified a grant that is required to comply with the applicable requirements of 2 CFR Part 200 and thus should have been included in the Schedule of Expenditures of Federal Awards. Once this grant was properly included, the Organization exceeded $750,000 in qualifying federal expenditures thus meeting the requirement for a Uniform Guidance audit to be conducted. Corrective Actions Taken or Planned: Management has hired a Director of Grants Financial Management who is heading a team to ensure effective management and compliance with all awards in the agency. In addition, management has acquired an award management system and implemented new processes to identify Federal awards. These processes consist of (1) clearly identifying Federal awards on the new Grant Code Form, (2) conducting new award kick-off meetings within the Awards Management, Budget, and Compliance team, and (3) tracking all awards on an award and contracts matrix, as well as in the new awards management software system. For each new award, a Grant Code Form is created. The form allows the Awards Management, Budget, and Compliance team to direct the Accounting team to create a grant code for tracking purposes in the accounting financial system. When the Awards Management and Budget team complete the form, the grant will be clearly identified as a federal grant. In addition, when KIND receives a new award, the Awards Management, Budget, and Compliance team conduct kick-off meetings within the team to discuss award financial, programmatic and compliance requirements. During this meeting the team completes an awards summary template that clearly identifies an award as a Federal award and any related compliance and other requirements. In addition to the processes mentioned, the Awards Management, Budget and Compliance team has created a new contracts and awards tracking matrix. The awards tracking matrix identifies Federal grants, along with any related award requirements and other identifying information. This matrix is maintained and updated by the Awards Management, Contracts and Compliance Officer and reviewed by the Director, Grants Financial Management on a regular basis. The review includes existing procedures related to awards management and monitoring of processes. This is on-going and already in progress. In addition to the above-mentioned processes KIND will do the following: continuously review existing processes around clearly identifying Federal awards and make adjustments to strengthen internal controls as needed; review and discuss with the awards management software vendor, additional improvements that can be made to the system to better identify and report Federal awards and review the current awards matrix and make additional improvements that will better identify and track Federal awards. Name and Person Responsible: Rochelle Quillman, Director of Grants Financial Management Expected Completion Date: October 31, 2023

Categories

Reporting Material Weakness

Other Findings in this Audit

  • 613521 2022-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
19.518 Overseas Refugee Assistance Programs for Western Hemisphere $384,387
19.510 U.s. Refugee Admissions Program $253,393
16.576 Crime Victim Compensation $250,972
21.027 Covid 19: Coronavirus State and Local Fiscal Recovery Funds $80,000
16.320 Services for Trafficking Victims $10,758