Finding 979620 (2023-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-06-27

AI Summary

  • Core Issue: The Organization has not filled a vacant board seat for over a year, violating state regulations requiring timely appointments of elected public officials.
  • Impacted Requirements: Compliance with the CSBG Act and Texas Administrative Code mandates that one-third of the board must consist of elected public officials or their representatives.
  • Recommended Follow-Up: Fill the vacant seat promptly and enhance monitoring of compliance with bylaws, reporting to the Governance & Operations Committee annually.

Finding Text

FINDING NO. 2023-001: NON-COMPLIANCE WITH SPECIAL TESTS AND PROVISIONS RELATED TO TRI-PARTITE BOARD COMPLIANCE AND SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER NONCOMPLIANCE WITH THE RELEVANT SPCIAL TESTS AND PROVISIONS Condition: Gulf Coast Community Services Association, Inc. (the “Organization) currently has nine (9) members on its Board with one (1) vacant seat pending nomination from an elected public official. As such, only two (2) members currently represent elected public officials. The vacant board position has not been filled and has exceeded the length of time the state allows for the seat to remain vacant. Additionally, no appointive public official was nominated to fill this vacant seat. Criteria: The CSBG Act at 42 USC 9910(a)(2)(A) and Title 10 of the Texas Administrative Code (TAC) Part 1, Chapter 6, Subchapter B, Rule §6.210(a) requires GCCSA to administer the CSBG Program through a tripartite board with a condition that one-third (1/3) of such members be elected public officials, holding office on the date of the selection, or their representatives. In the event that there are not enough elected public officials reasonably available and willing to serve on the board, the entity may select appointive public officials to serve on the board. The public officials selected to serve on the board may each choose one permanent representative or designate an alternate to serve on the board. Appointive public officials or their representatives or alternates may be counted in meeting the 1/3 requirement. Per May 2023 OMB Compliance Supplement, the CSBG Act does not provide for a grace period for entities to get into compliance when a vacancy exists, however, entities are required to not exceed the length of time permitted by the state. Rule §6.212(b)(1) of Subchapter B above of the TAC, allows the board position to remain vacant for no more than 90 days. Cause: The Organization did not take the necessary steps to ensure and support the Board’s timely selection and seating of a public official or public official’s permanent representative to fill the vacant public sector seat. Perspective Information: The Organization has not filled the board vacancy for the selected public official for over one (1) year. Questioned Costs: None noted. Effect or Potential Effect: The Organization is not in compliance with its corporate bylaws as well as regulatory provisions related to tri-partite board requirements.Identification of Repeat Finding: Not applicable since this is a new finding. Recommendation: We recommend that the Organization fill the vacant public sector seat, strengthen monitoring of compliance with corporate bylaws and report such compliance to the Governance & Operations Committee and/or its Board of Directors, at least on an annual basis. Views of Responsible Officials: Although there were several unforeseen circumstances that adversely impacted the timely filling of the vacancy for the public sector seat, none validate the fact that the Organization did not adhere to the expectations outlines in the corporate bylaws and regulatory provisions. It is important, however, that the Organization is aware of the need for key members of management to work with the Board to develop a plan for board recruitment, development and training.

Categories

Special Tests & Provisions Subrecipient Monitoring Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
93.569 Community Services Block Grant $5.86M
93.600 Head Start $1.33M
10.558 Child and Adult Care Food Program $552,346