FAC Explorer

Finding 484835 (2022-003)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2024-08-22
Audit: 317752
Organization: L.a. Works Inc. (CA)
Auditor: Armanino

AI Summary

  • Core Issue: Compensation costs were not recorded directly in the accounting software, leading to large year-end journal entries.
  • Impacted Requirements: The organization failed to meet Uniform Guidance cost principles by not tracking federal awards accurately throughout the year.
  • Recommended Follow-Up: Management should allocate grant expenses monthly or with each payroll to ensure compliance and accurate financial reporting.

Finding Text

Finding number: 2022-003 Assistance listing number: 94.002 CFDA title: AmeriCorps Retired and Senior Volunteer Program Criteria: The Uniform Guidance cost principles require that organizations identify, in their accounts, all Federal awards received and expended. Condition: Compensation costs were not recorded directly into the accounting software throughout the year. The amounts allocated to grants had to be recalculated at the end of the year and recorded in large journal entries. Cause: Prior to and during 2022, the organization had not established strong grant accounting practices. Possible effect: Multiple data sources were needed to determine the full amount of expenses allocated to each funding source. Recommendation: Management should ensure that grant expenses are allocated within the accounting software on a monthly basis, or, if preferred, when each payroll is processed. Views of responsible officials: We agree that payroll delineation per grant was maintained outside our accounting software. Once brought to our attention, we shifted our approach and are now fully in compliance and have included payroll delineation within our accounting software.

Corrective Action Plan

Corrective Action Plan Date: August 13, 2024 Cognizant or Oversight Agency: Corporation for National and Community Service L.A. Works, Inc. respectfully submits the following corrective action plan for the year ended December 31, 2022. Name and address of independent public accounting firm: Armanino, LLP 11766 Wilshire Blvd. 9th Floor Los Angeles, CA 90025 Audit period: December 31, 2022 The findings from the December 31, 2022 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the number assigned in the schedule. FINDINGS-MAJOR PROGRAM SIGNIFICANT DEFICIENCY 2022-003 The Uniform Guidance Cost principles require that organizations identify, in their accounts, all Federal awards received and expended. Recommendation: Management should ensure that grant expenses are allocated within the accounting software on a monthly basis, or, if preferred, when each payroll is processed. Action Taken: Once brought to our attention, we shifted our approach and are now fully in compliance. For the 2023 year, payroll delineation has been allocated monthly within the accounting software and for the 2024 year, payroll delineation has been allocated as payroll is processed. Name of responsible person: Name Ellen Tiep Title Finance Manager, L.A. Works Anticipated completion date: Completed as of December 31, 2023. If the Corporation for National and Community Service has questions regarding this plan, please call Deborah Brutchey, (213) 481-5376. Sincerely yours, Deborah Brutchey Executive Director L.A. Works

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 1061277 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
94.002 Retired and Senior Volunteer Program $462,830
94.006 Americorps $167,518
21.027 Coronavirus State and Local Fiscal Recovery Funds $161,226
94.017 Senior Demonstration Program $65,653
94.013 Volunteers in Service to America $37,500