Finding 564425 (2024-102)

Significant Deficiency
Requirement
ABL
Questioned Costs
-
Year
2024
Accepted
2025-06-11
Audit: 358561
Organization: B J Enterprises, Inc. (AZ)

AI Summary

  • Core Issue: Errors in reporting led to overstatement of administrative costs by $943 due to clerical inaccuracies and double claims.
  • Impacted Requirements: Compliance with federal and state recordkeeping regulations was not met, risking non-compliance with funding guidelines.
  • Recommended Follow-Up: Implement a thorough review process for monthly reports and claims to ensure accuracy and compliance, with documentation of all reviews.

Finding Text

REFERENCE: 2024-102 CFDA NUMBER: 10.558 – CHILD AND ADULT CARE FOOD PROGRAM U.S. DEPARTMENT OF AGRICULTURE - FOOD AND NUTRITION - 2024 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER 6AZ300003 QUESTIONED COSTS N/A CONDITION The following errors were noted while testing the Category Detail Reports, Sponsor Claim and Child and Adult Care Food Program (CACFP) expenses for July 2024 and September 2024: 1. The hourly timesheet for one employee in September 2024 was clerically inaccurate. 2. Contracted services for September 2024 were double claimed. These errors resulted in the following revised amounts: These errors resulted in an over reporting of total Administrative Costs (known questioned costs) of $183. However, after projecting the various types of errors over operating costs for the entire year, likely questioned costs totaled $943. CRITERIA In accordance with the Uniform Guidance, Compliance Supplement, Part 6 – Internal Control, the 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with the Arizona Department of Education, Day Care Home Compliance Manual, Revised June 2019, Chapter 5 Sponsor Responsibilities, Section 5.2 Sponsor Recordkeeping Requirements, sponsoring organizations are required to maintain records to fully support the monthly claim for reimbursement and compliance with program regulations. All sponsoring organizations must have a written policy pertaining to their recordkeeping procedures. All records shall be retained for a period of five years after the date of submission of the final claim for the fiscal year to which they pertain. EFFECT Program requirements were not complied with. Additionally, administrative costs were over reported. CAUSE Although the internal controls were adequately designed, there were deficiencies in the execution of the controls. Costs were not correctly summarized and reported on the Sponsor Claim. RECOMMENDATION AND BENEFIT The Organization’s monthly administrative cost report and supporting documentation should be reviewed for accuracy prior to completing the reimbursement claim. Any review should be documented. This will help ensure that program requirements are complied with and that administrative costs are accurately reported. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

Corrective Action Plan

REFERENCE: 2024-102 CFDA NUMBER: 10.558 – CHILD AND ADULT CARE FOOD PROGRAM U.S. DEPARTMENT OF AGRICULTURE - FOOD AND NUTRITION - 2024 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER 6AZ300003 CLIENT RESPONSE AND CORRECTIVE ACTION PLAN We concur with the condition. 1. Name of the contact person responsible for corrective action: Katie O’Neill, MPH, RD 2. Corrective action planned: B J Enterprises has hired a Payroll Service that double checks the timesheets each month. Both the Director and Assistant Director will double check the Administrative costs prior to submitting that month’s claim in order to ensure that the administrative costs are accurately reported. 3. Anticipated completion date: June 2025

Categories

Cash Management Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 564424 2024-101
    Significant Deficiency Repeat
  • 1140866 2024-101
    Significant Deficiency Repeat
  • 1140867 2024-102
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.558 Child and Adult Care Food Program $3.68M