Finding Text
Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the
nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition: The Organization had deficiencies in internal control related to federal awards. These are outlined in finding 2022-001. These include inappropriate billing of expenditures to federal awards due to misstatement of accounting records.
Questioned Costs: $55,935
Context: The breakdown in internal controls over financial reporting caused noncompliance with federal requirements and created overbillings.
Effect: The Organization duplicated amounts in claims to the grantor.
Cause: Long-time institutional knowledge was lost when the CFO left the organization. Safer then turned to an external contractor for accounting assistance that did not have the same level of familiarity with the organization’s programs, policies and procedures.
Recommendation: CLA recommends management continue to assess the current procedures for claims on federal grants to incorporate a life to date assessment of billings to ensure that expenditures are not claimed in error.
Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer noted that there was turnover in the accounting function of the organization and that the external contractor that was hired to act in the role of the CFO (until a regular employee in the CFO/controller role could be hired) was not as familiar with Safer’s established processes and procedures. Prior to the loss of the long-time CFO, Safer’s policies and procedures were very effective and no audit adjustments had been necessary in past audits under the full tenure of the current CEO.
Action Planned/Taken in Response to Finding:
• Hired an outside consultant to test certain 2023 transactions and procedures for accuracy and completeness with an emphasis on the matters identified in this Finding.
• The CEO has performed a thorough review of all policies and procedures to make sure they are still relevant for the current operating environment and has made modifications that will be sent to the Board for approval at an upcoming Board meeting.
Name(s) of the Contact Person(s) Responsible for Corrective Action:
• Lisa Kelloff, CEO
• Fredrick Gordon, CFO
Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2023.
Plan to Monitor Completion of Corrective Action Plan:
The CEO will be the assigned individual within the organization to monitor the above actions and make sure appropriate action is taken.