Finding 563835 (2024-002)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2024
Accepted
2025-06-04
Audit: 358060
Organization: Oslc Developments, Inc. (OR)
Auditor: Jones & Roth PC

AI Summary

  • Core Issue: There is a material weakness in internal controls over compliance, specifically in identifying federal subawards.
  • Impacted Requirements: The Uniform Guidance requires accurate identification and reporting of federal awards on the SEFA, which was not met.
  • Recommended Follow-Up: Revise policies and procedures to ensure all federal assistance, including subawards, are identified and reported correctly at the time of agreement signing.

Finding Text

--Type of Finding: Material weakness in internal control over compliance --Criteria: The Uniform Guidance (2 CFR Part 200, subpart F) states it is the responsibility of the Organization’s management to ensure internal controls are properly designed and implemented in order to identify federal awards and expenditures of federal awards and to prepare a schedule of expenditures of federal awards (SEFA) that includes the total federal awards expended, as determined in accordance with § 200.502. --Condition and Context: While performing audit procedures, we identified two federal subawards that were not previously identified as such by management and had not been included on the SEFA for the year ended September 30, 2024 as originally presented for audit. The SEFA was subsequently corrected prior to issuance of the audit. The original SEFA was materially misstated due to the exclusion of expenditures under the federal subawards totaling $379,232. --Cause of Condition: Management failed to identify the agreements as federal subawards and the related expenditures for inclusion on the SEFA. --Effect of Condition: Failure to accurately identify all federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Questioned Costs: None. --Repeat Finding: No. --Recommendation: We recommend the organization revisit its policies and procedures surrounding management’s review of grant and other contractual agreements to ensure all federal assistance, including subawards, are properly identified as such at the time the agreements are signed or received, and are properly included on the SEFA. --Views of Responsible Officials: See attached Corrective Action Plan.

Corrective Action Plan

Recommendation: We recommend the organization revisit its policies and procedures surrounding management’s review of grant and other contractual agreements to ensure all federal assistance, including subawards, are properly identified as such at the time the agreements are signed or received, and are properly included on the SEFA. ODI agrees with the auditors’ recommendation. Consistent with response to finding 2024-001, we have reviewed the design and implementation of internal controls procedures around accounting for grants and contracts. This has resulted in revision of our new funding form including identifying federal and nonfederal designations in subcontracts from states, and determination of conditions to ensure compliance with U.S. GAAP. Responsible staff member, Laurie Larson-Lewis, Finance Manager, completion date 5/31/2025.

Categories

Reporting Subrecipient Monitoring Material Weakness

Other Findings in this Audit

  • 563836 2024-002
    Material Weakness
  • 563837 2024-002
    Material Weakness
  • 563838 2024-002
    Material Weakness
  • 563839 2024-002
    Material Weakness
  • 1140277 2024-002
    Material Weakness
  • 1140278 2024-002
    Material Weakness
  • 1140279 2024-002
    Material Weakness
  • 1140280 2024-002
    Material Weakness
  • 1140281 2024-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.647 Social Services Research and Demonstration $621,519
93.434 Every Student Succeeds Act/preschool Development Grants $342,762
93.556 Marylee Allen Promoting Safe and Stable Families Program $276,912
21.027 Coronavirus State and Local Fiscal Recovery Funds $36,470
93.279 Drug Use and Addiction Research Programs $6,737