Finding 2022-001: Material Weakness in internal controls over compliance for
earmarking and material noncompliance for earmarking in the U.S. Refugee
Admissions Program:
Effect: The Organization may not have met earmarking requirements outlined in the underlying award agreements nor have controls to monitor that earmarking requirements were met effectively.
Auditor's Recommendation:
We recommend that the Organization implement a process to identify the value of direct assistance provided to each eligible refugee as recorded within the financial records. Further, we recommend that internal controls over compliance be implemented to monitor direct aid distribution and meet the earmarking requirements included within the grant terms.
Management Response:
We agree with the recommendation and have also submitted the following response. In accordance with the U.S. Department of State, Bureau of Population, Refugees, and Migration (PRM) FY 2019 Reception & Placement (R&P) Cooperative Agreement, all affiliates are required to have written documents available for review evidencing the following:
· R&P refugee per capita disbursement policy
· How refugee per capita funds beyond the $975 minimum are spent (i.e., Flex Funds policy)
· Pocket money disbursement policy
· Structured training plan for new and existing staff
· Policy on protection from sexual exploitation and abuse (PSEA)
· Grievance policy
· Policy on cultural orientation (CO) delivery and assessment of refugee understanding
· Implementation of accountability to affected populations (AAP) framework
Jewish Family Services of Silicon Valley ( JFSSV) has adequate policies and procedures and
follows the grantor's guidelines on per-capita earmark funds as stated by the Funder. JFSSV will continue to follow the funder-approved policies and procedures, which state the following:
“Per capita funds can be paid by the affiliate directly to the third party, or the affiliate
may reimburse U.S. ties or clients for purchases as long as receipts are provided evidencing that the purchases were for allowable material needs.
If there are per capita funds remaining at the end of the R&P period and all possible material needs have been provided to the case, including paying rent and utilities forward, the affiliate may write a check to the client for the remainder of the funds. The affiliate must ensure that the situation has been thoroughly documented in the case note log and that the case has no outstanding material needs. This option should be considered an exception and used sparingly.”
JFSSV makes every effort to provide the minimum amount to all referred clients as required by the funder. JFSSV meets with clients to provide the initial per capita funding and reviews program requirements for the next per capita funding. If the client follows the program, they are funded. Sometimes, clients leave the program or do not provide adequate documents to be funded, resulting in unspent per capita funds. When this occurs, JFSSV follows the Cooperative Agreement #12.9 Availability of Per Capita Funds:
A written statement must be submitted on or before December 31, 20xx, as a Post Award Task through [website link] reporting the amount of per capita funds and accrued interest unexpended and available as of September 30, 20xx. This statement must confirm the amount of those funds expended and reported as a part of the quarterly financial reports for October 1, 20xx, through September 30, 20xx. Should the Recipient have any unexpended per capita funds as of the financial report due on March 31, 20xx, such funds must be returned to the Bureau no later than April 30, 20xx.
In addition, JFSSV undergoes vigorous monitoring visits, monthly invoice reviews, and program/fiscal audits, which they pass.
JFSSV has provided Harshwal & Company LLP with contracts, cooperative agreements, program guidelines, internal Funder-approved policies & procedures, and all testing requirements with client backup.
To address the specific concerns raised regarding internal controls over compliance and earmarking requirements, JFSSV will continue to:
Enhanced Monitoring Process: JFSSV will continue monitoring processes to track the value of direct assistance provided to each eligible refugee.
Internal Controls Implementation: JFSSV will continue reviewing its internal controls to
oversee direct aid distribution with the funder and ensure all requirements are met effectively.
Documentation and Reporting: JFSSV will continue to review all disbursements to ensure they are thoroughly documented and reported. This will include maintaining receipts, case notes, and other relevant documentation to provide clear evidence of compliance with earmarking requirements.