FAC Explorer

Finding 374489 (2023-001)

Material Weakness
Requirement
B
Questioned Costs
$1
Year
2023
Accepted
2024-03-08
Audit: 294179
Organization: Ablelight, Inc. (WI)
Auditor: Baker Tilly US LLP

AI Summary

  • Core Issue: AbleLight did not keep enough documentation for some expenses charged to the COVID-19 Provider Relief Fund.
  • Impacted Requirements: The lack of documentation means AbleLight cannot prove compliance with program rules for certain expenditures.
  • Recommended Follow-Up: Management should improve their purchasing processes to ensure all expenses are properly documented and retained.

Finding Text

Agency: U.S. Department of Health and Human Services Federal Assistance Listing or State ID Number: 93.498, COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Criteria: According to the Provider Relief Fund and American Rescue Plan Rural Distribution Frequently Asked Questions, AbleLight is required to maintain adequate documentation to substantiate that program funds were used for health care-related expenses attributable to coronavirus or COVID-19. Statement of Condition: AbleLight's processes and controls did not ensure sufficient supporting documentation on certain expenses charged to the federal program was obtained and retained. Questioned Costs: The amount of known questioned costs totaled $650. The projected questioned costs are $26,394. Context: Of forty (40) non-payroll expenditures applied to the program that were tested, three (3) did not have sufficient documentation. Effect: AbleLight was not able to support the compliance with program requirements for a selection of expenses charged to the program. Cause: AbleLight's controls failed to identify and correct the lack of documentation supporting the expenses charged to the program. Recommendation: We recommend management review their processes and controls regarding the purchasing process to ensure that sufficient documentation is obtained and retained to support expenditures. Management Response: Management has evaluated its internal controls and processes around invoice and credit card charge backup documentation. Through new leadership over these functions, a cleaner file structure, and a new ERP system implementation in fiscal year 2024, management is confident weaknesses will be resolved.

Corrective Action Plan

Finding 2023-001 Planned Corrective Action Finding: During the fiscal 2023 financial statement audit, a material weakness in internal control was identified. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal or state program will not be prevented, or detected and corrected, on a timely basis. During the audit as of and for the year ended August 31, 2023, costs were applied to CARES Act PRF funds which were found to be without sufficient backup documentation. The impact to the current year statutory basis financial statements was not material. Corrective Response: Management represents that there was not sufficient documentation and support surrounding Provider Relief Funding applied to expenses for the year ending August 31, 2023. Operational and reporting improvements will be pursued in an effort to better provide documentation and support on a go-forward basis. Since these transactions, management has added additional staff and more training for processing credit card receipts, check processing with clean approvals, and new leadership over its Accounts Payable function. The organization is also implementing a new ERP system with clear process flows and tight connections between transactions and the related backup. Anticipated Completion Date 8/31/2024 Responsible Contact Person Brian Savoie, CFO 414-345-7844 and Errol Meinholz, Controller 920-245-9275

Categories

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Other Findings in this Audit

  • 950931 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund and American Rescue Plan Rural Distribution $2.07M