1.) Finding 2023-001 Data Collection Form Submission Delay
a. Program Information: N/A
b. Criteria: Per 2 CFR 200.512(a)(1), the audit package and the data collection form shall be submitted 30 days after receipt of the auditor's report(s), or 9 months after the end of the fiscal year whichever comes first.
c. Condition: For the year ended June 30, 2021, the audit package and data collection form was not submitted within the required timeline.
Response:
Explanation: The delay in submitting our annual audited financial statements was due to significant transitions within the MHAAO finance team. In the first half of FY23, we faced the departure of our contract accountant and then Finance Director, leaving substantial parts of the audit work incomplete. With only one staff accountant, we faced challenges in making progress on audit deliverables. After my appointment as the new Finance Director in February 2023, we encountered further delays due to our previous audit partner's scheduling difficulties. This led us to engage with Aldrich Advisors, who committed to completing the FY22 audit for us within the calendar year 2023.
Corrective Action: To address the lack of capacity on the MHAAO finance team, we successfully hired three new positions by the beginning of FY24: a Payroll Specialist, Accounts Payable Specialist, and an experienced Accounting Manager. We also recently promoted our Staff Accountant to a Senior Financial Analyst role, in charge of grants, contracts and compliance. We now have a strong and capable team to strengthen our internal financial processes and implement best practices in nonprofit financial management. To address this finding comprehensively, we have also implemented a new policy with two key components:
- A centralized tracking system for reporting deadlines, maintained by myself, our Accounting Manager, and our Senior Financial Analyst.
- Enhanced communication protocols for required submissions, including immediate communication with our audit team and funding partners in case of potential delays.
Future Measures: Integration of these measures into our internal financial management policies and procedures, ensuring consistent application and preventing future delays.
Contact person responsible for corrective action: John Domingo, Finance & IT Director
Completion date: 10/17/2023