Finding 530127 (2024-002)

Significant Deficiency

Requirement

Questioned Costs

Year

2024

Accepted

2025-03-25

Audit: 348223

Organization: Collegiate Edu-Nation (TX)

Auditor: Sutton Frost Cary LLP

AI Summary

Core Issue: There is a significant deficiency in internal controls over compliance, as one out of 40 expenses lacked required documentation.
Impacted Requirements: All expenses charged to the grant must be supported by an itemized receipt, per internal control procedures.
Recommended Follow-up: Management should verify that all expenses meet documentation requirements before submitting reimbursement requests.

Finding Text

Finding 2024-002: Allowable costs and activities – significant deficiency in internal controls over compliance. Criteria: The Organization’s internal control procedures over compliance specify that all expenses charged to the grant are supported by an itemized receipt. Condition: During allowable costs and activities testing for the grant, 1 out of 40 expenses tested did not have an itemized receipt. Cause: The expense in question was verbally confirmed as allowable; however, no formal documentation, such as an itemized receipt or written verification, was created or maintained. As a result, the expense should not have been charged to the grant in accordance with the Organization’s internal control procedures. Effect: The Organization’s documentation of grant expenses was not fully obtained in accordance with the internal control over compliance procedures. Questioned Costs: None.Recommendation: Management should ensure amounts charged to the grant adhere to all documentation requirements before the request for reimbursement is submitted. Management’s Response: See corrective action plan.

Corrective Action Plan

Finding 2024-002: Allowable costs and activities – significant deficiency in internal controls over compliance. Management Response Finding: Failure to Provide an Itemized Receipt for a Restaurant Purchase Corrective Action Taken: Effective July 1, 2024, CEN implemented Ramp, an expense management platform that ensures all purchases are documented with proper receipts before being charged to the grant. This solution directly addresses the issue of missing itemized receipts and ensures compliance with federal grant requirements. Steps Implemented: • Mandatory Receipt Submission: All purchases, including restaurant transactions, require an itemized receipt to be uploaded into Ramp before the expense can be approved. • Approval Before Grant Charging: An approver must review the itemized receipt to verify that no prohibited items were purchased before allowing the expense to be charged to the grant. • Grant Compliance Review: If an itemized receipt is not provided or contains unallowable expenses, the charge will not be allocated to the grant and must be covered by a non-grant funding source. • Training & Compliance: All employees who make purchases with grant funds have been trained on the requirement for itemized receipts and the consequences of non-compliance. Responsible Party: Kendall Guynes, CFO Completion Date: July 1, 2024 (Fully Implemented) Parties Responsible: Chief Executive Officer President Chief Financial Officer Business Manager The Corrective Action Plan is currently in place and was implemented on July 1, 2024.

Other Findings in this Audit

530126 2024-001

Material Weakness
1106568 2024-001

Material Weakness
1106569 2024-002

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
94.006	Americorps State and National 94.006	$628,936
93.558	Temporary Assistance for Needy Families	$133,283