Management's Perspective
Management acknowledges the audit finding related to exceeding budgeted amounts for specific allowable activities. We understand the importance of adhering strictly to approved budgets and appreciate the auditor's insights for improving our internal controls.
The discrepancy noted in the draw requests and employee salary reimbursement rate was unintentional and stemmed from insufficient monitoring of budget allocations and across specific cost categories. Overall for the grant we were $671,675.96 favorable to the total budget, but are committed to rectifying this issue promptly to ensure compliance with all applicable requirements by line item.
Corrective Action Plan
1. Root Cause Analysis:
The primary cause of this issue was the absence of a robust process for comparing expenditures to individual cost categories in the approved budget.
2. Policy and Procedure Enhancements:
o Budget Monitoring: A formal procedure will be implemented to review the budget allocations for each cost category prior to submitting any draw requests. This will include a reconciliation process to verify expenditures align with approved amounts.
o Approval Process: Draw requests will now require a secondary review by individual cost categories by the Chief Financial Officer to ensure compliance with budgeted amounts.
3. Employee Reimbursement Accuracy:
o We will update the reimbursement calculation process to ensure all employee salaries are reimbursed at the approved rates. This will involve cross-checking position with the budget during each draw request.
4. Training:
o Staff involved in grant management and budget monitoring will be provided training on allowable activities, cost category monitoring, and budget compliance by January 15, 2025.
5. Oversight and Accountability:
o A quarterly internal audit will be conducted to review draw requests and salary reimbursement calculations to identify any discrepancies early.
6. Immediate Actions Taken:
o The overdrawn amounts ($27,009) and salary discrepancy ($4,371) have been identified. Management is working to rectify these errors and will address any necessary repayments or budget amendments with the grantor.Timeline for Implementation
All corrective actions will be fully implemented by 1/31/2025. Progress will be reported to the Board of Directors as needed.
Contact Information
For further questions or additional clarification, please contact:
Robbie Marchant Chief Financial Officer 540-888-3456 marchant@trschool.org
Management remains committed to maintaining compliance with grant requirements and implementing procedures to prevent recurrence of this issue.