BOYS AND GIRLS CLUBS OF GREATER HOUSTON INC.

Finding #2024-001 – Material Weakness and Material Noncompliance. Applicable federal program: U. S. Department of Education, COVID-19 – Education Stabilization Fund, Assistance Listing #84.425U, Passed through Texas Education Agency, Contract period: 01/31/22 – 05/31/24, Contract number: 215280587110020, Passed through Lamar Consolidated Independent School District, Contract period: 09/01/22 – 06/30/24, Contract number: None, Passed through Wharton Independent School District, Contract period: 01/01/22 – 06/30/24, Contract number: None. Criteria: Allowable costs – The Uniform Guidance, Subpart E Cost Principles, requires that charges to federal awards for salaries and wages be based on records that accurately reflect work performed and support the distribution of an employee’s salary or wages among specific activities or cost objectives, which includes being supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition and context: In a sample of 30 payroll transactions, 7 did not have timesheets to support the allocation of salary costs charged to the major program. Further investigation revealed that Boys and Girls Clubs did not require time and effort reporting for program management personnel whose time charged to the awards totaled approximately $98,000. Repeat finding of #2023-003. Cause: A lack of understanding that all time charged to the award must be supported by time and effort reporting. Effect: Failure to establish controls for adherence with the Uniform Guidance for allowable costs may result in unallowed costs charged to the program. Questioned costs: Unknown. Recommendation: Strengthen controls to require time and effort reporting of actual time incurred for all salaries and wages charged to federal programs. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.

Finding #2023-002 – Material Weakness. Applicable federal program: U. S. Department of Education, COVID-19 – Education Stabilization Fund, Assistance Listing #84.425U, Passed through Texas Education Agency, Contract period: 01/31/22 – 05/31/24. Contract number: 215280587110020. Passed through Lamar Consolidated Independent School District, Contract period: 09/01/22 – 06/30/24, Contract number: None. Passed through Wharton Independent School District, Contract period: 01/01/22 – 06/30/24, Contract number: None. Criteria: Allowable costs – Same as finding #2023-001. Condition and context: Same as finding #2023-001. Cause: Same as finding #2023-001. Effect: Same as finding #2023-001. Questioned costs: Unknown. Recommendation: Same as finding #2023-001. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.

Finding #2023-003 – Material Weakness and Material Noncompliance. Applicable federal program: U. S. Department of Education, COVID-19 – Education Stabilization Fund, Assistance Listing #84.425U, Passed through Texas Education Agency, Contract period: 01/31/22 – 05/31/24, Contract number: 215280587110020. Passed through Lamar Consolidated Independent School District, Contract period: 09/01/22 – 06/30/24, Contract number: None, Passed through Wharton Independent School District, Contract period: 01/01/22 – 06/30/24, Contract number: None. Criteria: Allowable costs – The Uniform Guidance, Subpart E Cost Principles, requires that charges to federal awards for salaries and wages be based on records that accurately reflect work performed and support the distribution of an employee’s salary or wages among specific activities or cost objectives, which includes being supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition and context: In a sample of 30 payroll transactions, 7 did not have timesheets to support the allocation of salary costs charged to the major program; however, 1 of the 7 was charged 100% to the award. Further investigation revealed that Boys and Girls Clubs did not require time and effort reporting for program management personnel whose time charged to the awards totaled approximately $245,000. Cause: A lack of understanding that all time charged to the award must be supported by time and effort reporting. Effect: Failure to establish controls for adherence with the Uniform Guidance for allowable costs may result in unallowed costs charged to the program. Questioned costs: Unknown. Recommendation: Strengthen controls to require time and effort reporting of actual time incurred for all salaries and wages charged to federal programs. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.