Borderlands Restoration Network

Internal controls should be in place to provide reasonable assurance that disbursements are properly coded and authorization for payment properly documented. One disbursement, out of a sample of forty disbursements tested, was incorrectly expensed when it should have been capitalize as a fixed asset. Additionally, there was no evidence of authorization for payment for twenty seven of the forty disbursements tested. We recommend the Organization establish controls around disbursements to ensure expenditures are properly capitalized or expensed and payment authorization is properly documented.

Criteria: Procurement - Non-profit entities must follow the procurement standards set out at 2 CFR part 200. Condition: Certain language required by 2 CFR Part 200 was not included in the Organization's approved policy. Additionally, there was no documentation of the history of procurement including the rationale for the method of procurement and the Organization's procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Cause: Due to no previous single audit requirements, procurement policies had not been reviewed to ensure they complied with requirements by 2 CFR Part 200. Additionally, documentation was not maintained on the procurement process along with following the required verification on debarrment and suspension. Effect: The Organization's procurement policy is not adequate and does not have adequate documentation to support rational for procurement method. Context: A sample of one disbursement totaling $119,381 was selected from a population of two transactions over the micro purchase threshold totaling $221,056 for the period March 26, 2024 - December 31, 2024. The disbursement selected for testing did not have documentation of the rationale for the method of procurement. Questioned costs: No known or likely questioned costs in excess of $25,000. Repeat Finding: No Recommendation: We recommend the Organization implement changes to its procurement policy to include all requirements of 2 CFR Part 200 and implement procedures to properly document procurement.

Views of responsible officials of the auditee: The Organization concurs with the finding and will implement the following:

Update its procurement policy so it complies with 2 CFR Part 200 Develop additional policies and procedures that require documentation for the method of procurement and the Organization's procedures for verifying its chosen vendor Distribute policies and procedures to all applicable finance and programmatic staff Train staff on the new policies and procedures

Criteria: Subrecipient Monitoring - Non-profit entities must follow the requirements for pass-through entities set out at 2 CFR part 200.332. Condition: Lack of documentation of subrecipient monitoring including whether the subrecipient is disqualified. Also, there was no indication of notification of the federal award identification number and amount of federal funds to the subrecipients. Cause: Due to no previous single audit requirement, the Organization has not established a policy of documenting subrecipient monitoring performed or the communication of the federal award identification number and amount of federal funds to subrecipients. Effect: The Organization does not have adequate documentation evidencing subrecipient monitoring procedures were performed or that all required information relating to federal awards was provided to subrecipients. Context: A sample of three disbursements totaling $113,418 were tested from a population of eight transactions totaling $353,835. Questioned costs: No known or likely questioned cost in excess of $25,000. Repeat Finding: No Recommendation: We recommend the Organization establish a formal methodology for documenting subrecipient monitoring and adhere to its policies for communicating federal award identification in accordance with 2 CFR 200.332. Views of responsible officials of the auditee: The Organization concurs with the finding and will implement the following:

Develop additional policies and procedures that require documentation of subrecipient monitoring for each subrecipient Ensure all federal subrecipient contracts to include federal award identification number and the amount of federal funds awarded to each subrecipient Distribute policies and procedures and contract templates to all applicable finance and programmatic staff Train staff on the new policies and procedures