Finding 419309 (2022-002)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-09-07

AI Summary

  • Core Issue: The Schedule of Expenditures of Federal Awards (SEFA) has repeated errors in identifying federal programs and expenditures, leading to compliance risks.
  • Impacted Requirements: The Organization must adhere to accurate reporting standards as per the Uniform Guidance, which includes proper tracking and identification of federal programs.
  • Recommended Follow-Up: Enhance training on federal grant compliance and establish a robust system for timely identification and tracking of federal contracts to improve SEFA accuracy.

Finding Text

2022-002 Reporting ? Schedule of Expenditures of Federal AwardsIdentification as a Repeat Finding: Repeat of Finding 2021-004.Finding:The SEFA provided for audit contained errors in identifying programs, program clusters and expenditures of federal awards.Criteria:The Organization is responsible for maintaining accurate information about all federal programs and reporting requirements. The Organization is responsible for using this information to comply with the Uniform Guidance in carrying out federal programs.Sample Size and Population: N/ACondition and Context:The original SEFA provided for audit contained errors in identifying programs, program clusters and expenditures of federal awards including the following:? 21.019 Coronavirus Relief Fund excluded. Contracts 4120 & 8328 passed through by the United Way of King County & the contract passed through by the Washington State Housing Finance Commission (WSHFC) totaled $205,822 but were not included in the original SEFA provided.? 21.023 Emergency Rental Assistance Program Contract 9395 passed through by the United Way of King County understated by $341,000.? 21.023 Emergency Rental Assistance Program Contract excluded. Contract 8366 passed through by the United Way of King County included $8,274,601 of federal funds that were not included on the original SEFA provided for audit.? 21.026 Homeowner Assistance Fund contact #HAF0025 passed through by WSHFC overstated by $124,710.? 91.024 Emergency Food and Shelter contract #889000-033 passed through by United Way of King County overstated by $66,542.? 17.258 WIOA Title 1b Adult Services contract #21-115-ADU passed through by Workforce Development Council of King County not identified as part of the WIOA Cluster.Additionally, the prior year SEFA was overstated by $704,017 for the 20.019 Coronavirus Relief Fund Contracts #4120 and #8328 passed through by the United Way of King County due to the accounting error identified in Finding 2022-001.Effect:Inaccurate identification of programs subject to the Single Audit increases the risk that the Organization will not comply with the terms and conditions of federal programs.Cause:As noted in Finding 2022-001, the Organization did not correctly account for advanced federal funds and as noted in Finding 2022-003, the Organization has not implemented a policy for advanced federal funds that complies with 2 CFR 200.305. These gaps in internal control resulted in cut-off errors in SEFA reporting for FY21 & FY22. Additionally, the Organization has not been applying the guidance of Section 200.502 of the Uniform Guidance in preparing the SEFA. Lastly, the program manager of the pass through agency of the 21.023 Emergency Rental Assistance Program Contract #8366 incorrectly informed the Organization that it had no responsibility for reporting the contract as a subrecipient of federal funds.Recommendation:The Organization must continue to increase its familiarity with federal grant compliance requirements and establish a process for timely identification of federal programs and a system for tracking contracts in order to ensure compliance with federal award programs and to completeness and accuracy in SEFA reporting.Questioned Costs: NoneManagement Response and Corrective Action Plan: See Corrective Action PlanContact Person: Mansour Camara, CFO

Corrective Action Plan

ULMS Corrective Action Plan for FY 21-22 Audit FindingsULMS faced significant challenges with the departure of its longtime CFO two months post fiscal year 2021. In addition, the third-party management company who had been responsible for the Partnership accounting, ceased the relationship abruptly without opportunity to smoothly transition the responsibility in-house to ULMS. Our external auditor does not prepare a Management Letter typically used to communicate with the Board of Directors and Governance issues that may not elevate to a finding. As such, significant findings are reflected in Section III ? Federal Award Findings and Questioned Costs.FY 2021 was the organization?s first single audit reporting requirement. ULMS engaged a third-party CPA to review past audit and current documents needed to commence the FY 2022 audit. However, due to an emergency there was limited independent review of documents prior to being submitted to the auditor due to time constraints. ULMS continues to strengthen its accounting team and has hired a new Controller in July 2023. The new Controller is a licensed CPA with over 30 years accounting experience and over 10 years? experience as an independent auditor for a range of organizations including non-profits. The Controller will collaborate with the CFO to ensure there is accuracy in reporting, especially for major federal programs. Finding #: 2022-002Contact Person: Mansour Camara? Management has determined that the finding as written is misleading. The Schedule of Expenditures of Federal Awards (SEFA) prepared by ULMS initially contained errors. However, all errors were corrected by the time the draft financial statements were presented. There was no financial impact on the organization and the most significant issue on the SEFA schedule was a result of miscommunication with ULMS? funding source including the lack of clear identification of the funding source within the contract.Actions to be taken: ULMS migrated to a new and more sophisticated accounting system. This new system has more reporting and tracking capabilities which will enhance grant tracking and review of activities. These additional tools will aid management in overseeing future endeavors. In addition, ULMS will proactively contact the CFO or contract signer of the funding entity and confirm the source of funding for all grants over $100,000. ULMS will participate in more nonprofit conferences on a regional and national level.

Categories

Reporting

Other Findings in this Audit

  • 419310 2022-004
    Material Weakness
  • 419311 2022-004
    Material Weakness
  • 419312 2022-004
    Material Weakness
  • 419313 2022-004
    Material Weakness
  • 419314 2022-004
    Material Weakness
  • 419315 2022-002
    Material Weakness Repeat
  • 419316 2022-002
    Material Weakness Repeat
  • 419317 2022-004
    Material Weakness
  • 419318 2022-002
    Material Weakness Repeat
  • 419319 2022-004
    Material Weakness
  • 419320 2022-004
    Material Weakness
  • 419321 2022-004
    Material Weakness
  • 419322 2022-004
    Material Weakness
  • 419323 2022-004
    Material Weakness
  • 419324 2022-004
    Material Weakness
  • 419325 2022-004
    Material Weakness
  • 419326 2022-004
    Material Weakness
  • 419327 2022-002
    Material Weakness Repeat
  • 419328 2022-004
    Material Weakness
  • 419329 2022-001
    Material Weakness Repeat
  • 419330 2022-001
    Material Weakness Repeat
  • 419331 2022-002
    Material Weakness Repeat
  • 419332 2022-002
    Material Weakness Repeat
  • 419333 2022-003
    - Repeat
  • 419334 2022-003
    - Repeat
  • 995751 2022-002
    Material Weakness Repeat
  • 995752 2022-004
    Material Weakness
  • 995753 2022-004
    Material Weakness
  • 995754 2022-004
    Material Weakness
  • 995755 2022-004
    Material Weakness
  • 995756 2022-004
    Material Weakness
  • 995757 2022-002
    Material Weakness Repeat
  • 995758 2022-002
    Material Weakness Repeat
  • 995759 2022-004
    Material Weakness
  • 995760 2022-002
    Material Weakness Repeat
  • 995761 2022-004
    Material Weakness
  • 995762 2022-004
    Material Weakness
  • 995763 2022-004
    Material Weakness
  • 995764 2022-004
    Material Weakness
  • 995765 2022-004
    Material Weakness
  • 995766 2022-004
    Material Weakness
  • 995767 2022-004
    Material Weakness
  • 995768 2022-004
    Material Weakness
  • 995769 2022-002
    Material Weakness Repeat
  • 995770 2022-004
    Material Weakness
  • 995771 2022-001
    Material Weakness Repeat
  • 995772 2022-001
    Material Weakness Repeat
  • 995773 2022-002
    Material Weakness Repeat
  • 995774 2022-002
    Material Weakness Repeat
  • 995775 2022-003
    - Repeat
  • 995776 2022-003
    - Repeat

Programs in Audit

ALN Program Name Expenditures
21.023 Emergency Rental Assistance Program $8.27M
21.026 Arpa- Haf Counseling Sustainability Grant $249,949
21.027 Ulms Young Adult Shelter $214,025
21.019 Coronavirus Relief Fund $124,710
17.258 Wioa Title 1b Adult Services, Career Services Program $122,043
17.259 Wioa Py21/fy22- Title 1b Youth Services, Out-of-School $110,859
16.726 Project Ready Mentor Vi $98,113
17.261 Pathways for Youth $67,615
93.185 Cdc Vaccine Equity $41,000
99.U19 Housing Stability Counseling Program $37,128
14.316 Housing Counsing Counseling Training Program $30,022
97.024 Emergency Food and Shelter Program $13,158