Finding 393849 (2020-001)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2020
Accepted
2024-04-19

AI Summary

  • Core Issue: The entity failed to submit the audit reporting package on time, missing the March 31, 2022 deadline.
  • Impacted Requirements: This non-compliance with §200.512 of the Uniform Guidance affects timely reviews of federal program performance.
  • Recommended Follow-Up: Implement better planning and controls to ensure compliance with future audit deadlines and improve operational efficiency.

Finding Text

CRITERIA: Section §200.512 of the Uniform Guidance, Report Submission, requires that the audit must be completed and the data collection form and audit reporting package be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit fiscal period. CONDITION: Entity’s data collection form and audit reporting package for the six-month reporting fiscal period ended December 31, 2020, were not submitted in a timely manner to the Federal Audit Clearinghouse. The Uniform Guidance required that the submittal be made by or before March 31, 2022 (inclusive of the six months extension beyond the original due date of September 30, 2021, granted by the OMB to accommodate business disruptions caused by Covid-19 pandemic.) CAUSE: It appears the organization experienced extended disruptions in its fiscal department due to the Covid-19 pandemic and other health challenges, resulting in the late completion of financial records and readiness for audit activities. EFFECT: Non-compliance with a compliance requirement of the Uniform Guidance that is considered relevant for timely review of the organization’s performance of the federal program. RECOMMENDATION: Establish processes and controls, including planning in advance for skilled personnel or alternative actions, bearing in mind audit reporting and compliance deadlines, in order to enhance the overall operational efficiency in the accounting and financial reporting functions as well as ensure compliance with the financial and audit report submission due dates.

Corrective Action Plan

VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The management and board of directors of Houston Business Development, Inc. (HBDi) acknowledge the importance of timely submission of the Single Audit reporting package. As HBDi has a small accounting staff, regrettably, circumstances beyond our control involving prolonged absences and illness of essential personnel, coupled with the stifling economic impact of Covid-19, contributed to the submission delay. To assure compliance going forward, we have engaged the support of an outside CPA firm to assist us through a transitional period currently underway, which includes upgrading software systems, updating accounting policies/procedures and expanding accounting department personnel. HBDi President, Marlon Mitchell, will be responsible for implementing the aforementioned actions, with an anticipated completion date of August 31, 2024.

Categories

Reporting

Other Findings in this Audit

  • 970291 2020-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.019 Coronavirus Relief Fund $35.00M