Finding 42950 (2022-003)

Material Weakness
Requirement
A
Questioned Costs
-
Year
2022
Accepted
2023-06-21
Audit: 38169
Organization: Progress House Inc. (CA)
Auditor: St Group

AI Summary

  • Core Issue: The nonprofit organization failed to separate federal awards from other funds, violating OMB Circular A-133, Section .225(b).
  • Impacted Requirements: Noncompliance could lead to improper use of federal funds and difficulties in reporting, risking audit findings.
  • Recommended Follow-Up: Implement controls for tracking federal awards separately, provide staff training, and conduct regular financial reviews to ensure compliance.

Finding Text

Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: County of Yolo, Placer County, Advocates for Human Potential, Inc. Category of Finding: Allowable Cost/Cost Principles Federal-Pass through Grantor: 2020-2019-PHI01, HHS000025, 7438-CA-BHWD-PHI AL No: 93.959 Finding: The audit identified noncompliance by the nonprofit organization regarding the requirements stipulated in OMB Circular A-133, Section .225(b). This section mandates that federal awards must be accounted for and reported separately from other funds. Notably, the organization's current practice involves allocating multiple funding sources to the facilities it operates without ensuring the necessary segregation of federal awards. Cause: The nonprofit organization did not have adequate controls in place to ensure that federal awards were tracked and accounted for separately from other funds. There was a lack of communication and coordination among the different departments responsible for tracking and reporting federal awards. Effect: The failure to account for federal awards separately from other funds could result in the organization inadvertently using federal funds for purposes that are not allowed or in violation of federal regulations. It could also lead to difficulties in properly reporting and accounting for the use of federal awards, which could result in audit findings or compliance issues. Criteria: The Organization should ensure that its practices align with the requirements stated in OMB Circular A-133, Section .225(b), which mandates the separate accounting and reporting of federal awards. Questioned costs ? Unknown Repeat finding - No Recommendation: The nonprofit organization should establish and implement effective controls to ensure that federal awards are tracked and accounted for separately from other funds, in accordance with the requirements of OMB Circular A-133, Section .225(b). This could include designating a specific account or accounts for federal awards, ensuring that federal awards are coded and tracked separately in the organization's accounting system, and implementing regular reconciliations to ensure that federal awards are properly accounted for. Additionally, the organization should provide training to staff members responsible for handling federal awards to ensure that they are aware of the requirements for tracking and accounting for federal awards separately. Finally, the organization should conduct regular reviews and monitoring of its financial management processes to ensure that federal awards are being used in compliance with all applicable laws and regulations.

Corrective Action Plan

Views of responsible officials and corrective action: See SEFA Preparation; in addition to allocating funds based on the SEFA worksheet properly in our operating system, QuickBooks for tracking purposes. This process will be completed on a monthly basis with a quarterly audit to ensure the proper allocation of funds provided. Responsible Individual: Office Manager Implementation Date: May 2023

Categories

Subrecipient Monitoring Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 42948 2022-005
    Significant Deficiency
  • 42949 2022-004
    Material Weakness
  • 619390 2022-005
    Significant Deficiency
  • 619391 2022-004
    Material Weakness
  • 619392 2022-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.959 Block Grants for Prevention and Treatment of Substance Abuse $228,428