Finding 516555 (2024-006)

Significant Deficiency
Requirement
A
Questioned Costs
-
Year
2024
Accepted
2024-12-23

AI Summary

  • Core Issue: The organization lacks a formal review and approval process for journal entries in federal grant programs, increasing the risk of errors.
  • Impacted Requirements: This finding highlights a significant deficiency in internal controls, violating 2 CFR 200.303(a) regarding effective management of federal awards.
  • Recommended Follow-Up: Implement a formal review and approval process for all journal entries related to federal grants to ensure compliance and accuracy.

Finding Text

2024-006– Lack of Independent Review and Approval of Journal Entries in Federal Grant Programs Finding Type. Immaterial Noncompliance. Significant Deficiency in Internal Control over Compliance (Allowable Activities). Program. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027, All Award Numbers Criteria. According to 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition. The Organization does not have a formal review process in place for journal entries related to its federal grant programs. Journal entries are posted without independent review or approval, increasing the risk of errors or misstatements in the financial records. Cause. The lack of a review process is due to insufficient staffing and inadequate segregation of duties within the accounting department. Effect. Without a review process, there is an increased risk of inaccurate financial reporting and potential non-compliance with federal regulations. This could lead to questioned costs, audit findings, and potential loss of federal funding. Questioned Costs. No costs are required to be questioned as a result of this finding, in as much as no unallowable expenditures were noted. Recommendation. The Organization should implement a formal review and approval process for all journal entries related to federal grant programs. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.

Corrective Action Plan

Auditor Description of Condition and Effect. During our testing we noted that there was not an independent review performed on journal entries related to their federal grant program. Without a review process, there is an increased risk of inaccurate financial reporting and potential noncompliance. Auditor Recommendation. We recommend that the Organization implement a formal review and approval process for all journal entries related to federal grant programs. Corrective Action. Management will implement an independent monthly review of all journal entries, including those related to the federal grant programs. The designated reviewer will be a senior accounting team member or equivalent who does not have the ability to create or approve journal entries in the general ledger system. The designated reviewer will compare the entries to ensure proper documentation, accurate amounts, correct coding, and compliance with the applicable federal grant regulations. Any discrepancies or issues identified during the review will be documented, and corrective actions will be taken immediately. The reviewer will sign off on the entries, confirming that all journal entries meet required standards. Responsible Person. Chris Sargent, President & Executive Officer Anticipated Completion Date. March 31, 2025

Categories

Internal Control / Segregation of Duties Allowable Costs / Cost Principles Reporting Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 516540 2024-003
    Significant Deficiency
  • 516541 2024-003
    Significant Deficiency
  • 516542 2024-003
    Significant Deficiency
  • 516543 2024-003
    Significant Deficiency
  • 516544 2024-003
    Significant Deficiency
  • 516545 2024-004
    Significant Deficiency
  • 516546 2024-004
    Significant Deficiency
  • 516547 2024-004
    Significant Deficiency
  • 516548 2024-004
    Significant Deficiency
  • 516549 2024-004
    Significant Deficiency
  • 516550 2024-005
    Significant Deficiency
  • 516551 2024-005
    Significant Deficiency
  • 516552 2024-005
    Significant Deficiency
  • 516553 2024-005
    Significant Deficiency
  • 516554 2024-005
    Significant Deficiency
  • 516556 2024-006
    Significant Deficiency
  • 516557 2024-006
    Significant Deficiency
  • 516558 2024-006
    Significant Deficiency
  • 516559 2024-006
    Significant Deficiency
  • 1092982 2024-003
    Significant Deficiency
  • 1092983 2024-003
    Significant Deficiency
  • 1092984 2024-003
    Significant Deficiency
  • 1092985 2024-003
    Significant Deficiency
  • 1092986 2024-003
    Significant Deficiency
  • 1092987 2024-004
    Significant Deficiency
  • 1092988 2024-004
    Significant Deficiency
  • 1092989 2024-004
    Significant Deficiency
  • 1092990 2024-004
    Significant Deficiency
  • 1092991 2024-004
    Significant Deficiency
  • 1092992 2024-005
    Significant Deficiency
  • 1092993 2024-005
    Significant Deficiency
  • 1092994 2024-005
    Significant Deficiency
  • 1092995 2024-005
    Significant Deficiency
  • 1092996 2024-005
    Significant Deficiency
  • 1092997 2024-006
    Significant Deficiency
  • 1092998 2024-006
    Significant Deficiency
  • 1092999 2024-006
    Significant Deficiency
  • 1093000 2024-006
    Significant Deficiency
  • 1093001 2024-006
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $430,515
55.059 United for Alice at Work $134,030
93.568 Low-Income Home Energy Assistance $79,625
14.267 Continuum of Care Program $50,127
21.009 Volunteer Income Tax Assistance (vita) Matching Grant Program $27,246