Finding 504697 (2023-002)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2023
Accepted
2024-11-05
Audit: 327314
Organization: Special Olympics Arizona, Inc. (AZ)
Auditor: Cbiz CPAS PC

AI Summary

  • Core Issue: The internal controls for reviewing payroll charges to federal awards were inadequate, leading to a material weakness in compliance.
  • Impacted Requirements: Compliance with 2 CFR § 200.430 regarding the review of interim payroll charges based on budget estimates.
  • Recommended Follow-Up: Implement processes to review actual expenses or adjust billing practices to reflect actual costs instead of budgeted amounts.

Finding Text

Item: 2023-002 Assistance Listing Number: 21.027 Programs: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Agencies: Arizona State Office of the Governor; Maricopa County Pass-Through Grantor Identifying Number: Unknown Award Year: January 1, 2022 to December 31, 2024; January 28, 2022 to June 30, 2023 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-the-fact interim payroll charges made to federal awards based upon budget or allocation estimates. Questioned Costs: n/a Context: In a population of 232 payroll costs charged to the program, we conducted a non-statistical sample of 24 payroll costs charged to the program. In our sample of 24, we noted that all selections were charged to the program based on budget estimates. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred such that costs charged to the program were supported. However, recordkeeping regarding the measurement of actual effort compared to budgeted or allocated effort was inadequate. As such, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls was not properly designed to detect potential adjustments needed to the amounts that were billed based upon budget or allocation estimates. Cause: Special Olympics Arizona, Inc. did not design processes and controls to perform the after-the-fact review. Identification as a Repeat Finding: Repeat finding of 2022-02 Recommendation: The entity should design processes and controls to perform the after-the-fact review or implement a process that will allow for billing of actual expenses rather than budgeted expenses. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.

Corrective Action Plan

Item: 2023-002 Assistance Listing Number: 21.027 Programs: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Agencies: Arizona State Office of the Governor; Maricopa County Pass-Through Grantor Identifying Number: Unknown Award Year: January 1, 2022 to December 31, 2024; January 28, 2022 to June 30, 2023 Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-thefact interim payroll charges made to federal awards based upon budget or allocation estimates. Name of Contact Person: Doug Taylor, CFO Phone Number: (602) 230-1116 Anticipated Completion Date: December 31, 2024 Views of Responsible Officials and Corrective Actions: Special Olympics Arizona, Inc. revised its policies and procedures for the 4th quarter of 2023 to require that actual time be recorded on timesheets for the actual efforts spent on Federal awards. Management will utilize actual time and effort when charging expenditures to Federal awards going forward.

Categories

Allowable Costs / Cost Principles Material Weakness

Other Findings in this Audit

  • 504698 2023-002
    Material Weakness Repeat
  • 504699 2023-003
    Material Weakness Repeat
  • 504700 2023-004
    Material Weakness Repeat
  • 504701 2023-004
    Material Weakness Repeat
  • 1081139 2023-002
    Material Weakness Repeat
  • 1081140 2023-002
    Material Weakness Repeat
  • 1081141 2023-003
    Material Weakness Repeat
  • 1081142 2023-004
    Material Weakness Repeat
  • 1081143 2023-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $411,851
84.380 Special Education - Special Olympics Education Programs $160,802
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $114,450
21.027 Coronavirus State and Local Fiscal Recovery Funds $71,194
93.217 Family Planning Services $49,789
93.184 Disabilities Prevention $1,946
93.630 Developmental Disabilities Basic Support and Advocacy Grants $0