FAC Explorer

Finding 526751 (2024-007)

Material Weakness
Requirement
C
Questioned Costs
$1
Year
2024
Accepted
2025-03-12
Audit: 345752
Organization: Siouxland Human Investment Partnership, Inc. (IA)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: There was a material weakness in cash management, leading to incorrect draw requests for the Second Chance Act Reentry program.
  • Impacted Requirements: Compliance with 2 CFR 200.303(a) and 2 CFR 200.305 was not maintained, as draw requests exceeded actual expenditures.
  • Recommended Follow-Up: Strengthen internal controls over cash management to ensure draw requests align with supporting documentation.

Finding Text

Department of Justice Federal Financial Assistance Listing #16.812, 15PJDP-22-GG-03256-SCAX and 15PBJA-22-GG-04601-SCAX, 7/1/2023 – 6/30/2024 Second Chance Act Reentry Initiative Cash Management Material Weakness in Internal Control over Compliance and Other Noncompliance for a Non-Major Program Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.305 states that recipients’ payment methods must minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Under Part 3, section C. of the Compliance supplement, for grants that are funded on a reimbursement basis, expenditures need to be incurred prior to the date of the reimbursement request. Condition: There were two months out of twelve where the draw request amount for the Second Chance Act Reentry program was switched with a draw request for another federal program. The draw request amount exceeded the actual expenditures incurred for these two months. Cause: The review and approval over the draw request did not identify the misclassification between the two grant programs. Effect: The draw request amounts for the Second Chance Act Reentry program exceeded the actual expenditures incurred for the two months by $55,054. Questioned Costs: $55,054. Context: A non-statistical sample of four out of twelve months were initially selected for testing. All draws submitted within the selected months were ultimately tested. Repeat Finding from Prior Year: No Recommendation: We acknowledge a review process is in place, however we recommend that management strengthen their controls surrounding the cash management process to ensure the review of funds being requested for reimbursement agree to the grant program supporting documentation. Views of Responsible Officials: Management is in agreement.

Corrective Action Plan

Federal Agency Name: Department of Justice Assistance Listing Number: 16.812 Program Name: Second Chance Act Reentry Initiative Finding Summary: There were two months out of twelve where the draw request amount for the Second Chance Act Reentry program was switched with a draw request for another federal program. The draw request amount exceeded the actual expenditures incurred for these two months. Corrective Action Plan: SHIP’s Finance Director drew down funds for two months of expenditures on the same day for both the Department of Labor‐funded BOOST GO program and the Department of Justice‐funded BOOST Re‐Entry program. This resulted in mistakenly swapping the drawdowns for the programs, therefore drawing down GO’s funds for Re‐Entry and Re‐Entry’s funds for GO. The payments were recorded correctly by Accounting staff. The mistake was caught while the Finance Director was preparing for the annual audit. Once the mistake was discovered, the Executive Director and the Finance Director immediately contacted the Federal Project Officers of both grants to report the error and request information on how to proceed with correcting it. The Federal Project officers were supportive of being informed of the errors, and in providing feedback on how to correct the mistakes, which SHIP did immediately. Next, the Finance Director reported the error to the auditors, and the errors were also reported to the SHIP Executive Committee of the Board of Directors. Moving forward in the short term, the Finance Director has started to double check the account number on the report and the account number on the draw down platform to ensure that it is the correct grant. The reports are prepared monthly and the accountant that will prepare the monthly report will also add the account identifier to the front of the packet. This will be double checked by the Finance Director. Deposits will have to be verified as well to ensure we record the payor correctly. The Finance Director will also reconcile that the payments recorded on the grant platform and SHIP’s financial system to ensure they both agree. Long term, SHIP will be more intentional about the naming and branding of programs. Currently, SHIP is applying for a new grant from the Department of Labor to continue the BOOST Re‐Entry program. If awarded, this program will be dropping the “BOOST” acronym from the name to avoid confusion with the established BOOST GO program. Having two separate programs sharing a name was intended to build on the branding and community awareness of the BOOST program but has had the unintentional consequence of creating confusion for the public, partner agencies, and participants. As the above finding also demonstrates, it can cause unfortunate errors administratively as well. See also 2024‐006 Finding for each program Responsible Individual: Mindy Baylor, Director of Finance Anticipated Completion Date: November 2024

Categories

Questioned Costs Cash Management Material Weakness

Other Findings in this Audit

  • 526747 2024-003
    Material Weakness Repeat
  • 526748 2024-004
    Material Weakness
  • 526749 2024-005
    Material Weakness
  • 526750 2024-006
    Material Weakness
  • 1103189 2024-003
    Material Weakness Repeat
  • 1103190 2024-004
    Material Weakness
  • 1103191 2024-005
    Material Weakness
  • 1103192 2024-006
    Material Weakness
  • 1103193 2024-007
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
17.270 Reentry Employment Opportunities $576,735
84.287 Twenty-First Century Community Learning Centers $576,612
16.812 Second Chance Act Reentry Initiative $342,592
16.818 Children Exposed to Violence $215,852
93.556 Marylee Allen Promoting Safe and Stable Families Program $171,778
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $139,140
93.669 Child Abuse and Neglect State Grants $23,487
93.558 Temporary Assistance for Needy Families $18,256
16.540 Juvenile Justice and Delinquency Prevention $12,122