FAC Explorer

Finding 385594 (2023-003)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-03-27
Audit: 298321
Organization: Hyacinth Aids Foundation, INC (NJ)
Auditor: Cliftonlarsonallen LLP

AI Summary

  • Core Issue: There was a significant deficiency in internal controls over compliance, specifically with the reporting of indirect costs.
  • Impacted Requirements: Indirect costs were inconsistently applied across 10 out of 12 reporting periods, leading to incomplete financial information.
  • Recommended Follow-Up: Implement an internal control policy for an independent review of quarterly reports to ensure accuracy before submission.

Finding Text

Federal and State Agency: Department of Health and Human Services Center for Disease Control and Prevention; United States Department of Health and Human Services; and NJ State Dept. of Health & Senior Services Federal and State Program Name: HIV Prevention Activities Health Department Based (93.940); State Targeted Response to the Opioid Crisis (93.788); State HIV Services (DHST23HIV006) Assistance Listing Number: 93.940 and 93.788 Federal and State Award Identification Number and Year: (93.940: NU62PS924524; NU62PS924524H; NU62PS92452; NU62PS92452H; NU62PS924614; NU62PS924614) (93.788: H79TI085743)( STATE: DHST23HIV006) Pass-Through Agency: NJ State Dept. of Health & Senior Services Pass-Through Number(s): (93.940: DHST22FPR012; DHST22FPR004; DHST22HRC003; DHST23HRC004; DHST22EHE003; DHST23EHE001) (93.788: DHST23BUP004) Award Period: See SEFA and SESA Type of Finding:  Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Indirect costs were not being consistently applied based on quarterly expenditure reports. The reporting was corrected in subsequent quarters in FY 2023. Condition: Auditor noted while testing reporting of indirect costs 10 of the 12 periods were not correctly being reporting based on the approved indirect cost rate. The reporting was identified and corrected in subsequent periods, however the initial discrepancies were not identified. Questioned costs: None Context: Auditor noted while testing reporting of indirect costs 10 of the 12 periods were not correctly being reporting on based on the indirect cost rate. The reporting was identified and corrected in subsequent periods, however the initial discrepancies were not identified. Cause: During FY 2023 there was turnover in key positions in the CFO and senior accountant positions. The turnover of these positions lead to incorrect reporting of that required correction in subsequent quarters in FY 2023. Effect: The impact of this led to management not having complete and accurate financial information during FY 2023. Repeat Finding: No Recommendation: Auditor recommends that management establish an internal control policy where an individual outside the accounting department that reviews the quarterly reporting to ensure that information is accurate and complete before being submitted. Views of responsible officials: See corrective action plan

Corrective Action Plan

Material Weakness: Significant deficiency in internal control over compliance. Corrective Action Plan: Due to difficulty in hiring and engaging a fulltime Chief Financial Officer, Management has made the decision to outsource our finance department and has engaged the services of Withum, a premier accounting services firm. Management has implemented new accounting software with more robust cost allocation tools and internal controls. Management has also implemented cost allocation methodologies and grant management rules into the workflow and new process definitions associated with implementing new software. Grant reporting rules and cost allocations will be built into the accounting software. A quarterly review of grant expenditures and cash flow management will be conducted by the Board of Trustees Finance committee quarterly. Anticipated Completion Date: The engagement with Withum was entered into in May 2023. The financial systems update went live on February 1, 2024. Quarterly review of grant expenditures and cash flow management will be ongoing April – June 2024.

Categories

Reporting Significant Deficiency

Other Findings in this Audit

  • 385595 2023-003
    Significant Deficiency
  • 385596 2023-003
    Significant Deficiency
  • 385597 2023-003
    Significant Deficiency
  • 385598 2023-003
    Significant Deficiency
  • 385599 2023-003
    Significant Deficiency
  • 385600 2023-003
    Significant Deficiency
  • 962036 2023-003
    Significant Deficiency
  • 962037 2023-003
    Significant Deficiency
  • 962038 2023-003
    Significant Deficiency
  • 962039 2023-003
    Significant Deficiency
  • 962040 2023-003
    Significant Deficiency
  • 962041 2023-003
    Significant Deficiency
  • 962042 2023-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.788 Opioid Str $709,299
93.939 Hiv Prevention Activities_non-Governmental Organization Based $430,371
93.940 Hiv Prevention Activities_health Department Based $275,871
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $103,869
93.914 Hiv Emergency Relief Project Grants $87,714
93.917 Hiv Care Formula Grants $57,460
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $52,400
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $36,250