Mariposa Center for Safety

Condition: As a result of our audit procedures and review of the SEFA, we proposed multiple adjustments to the SEFA, which resulted in a material change in total expenditures of federal awards.

Criteria: 2 CFR Part 200

Cause: Oversight by management, and there was not an independent review of the SEFA prepared by someone other than the preparer.

Effect: Audit adjustments were required for the SEFA to be materially correct in accordance with 2 CFR Part 200.510(b).

Recommendation: We recommend that prior to sending the SEFA to the auditors, management performed a detailed review of the SEFA, general ledger, and monthly invoicing spreadsheets for each federal program included on the SEFA, to ensure the reports are consistent and the SEFA is complete and accurate. If possible, this review should be completed by an individual who did not prepare the SEFA and who has the appropriate skills, knowledge and experience of accounting and reporting in the nonprofit industry.

View of Responsible Official and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Condition - Material Weakness: Expenditures charged to the federal program did not always follow the federal cost principles to be considered allowable costs.

Criteria: In order to be allowable under 2 CFR 200, costs must meet certain criteria, including but not limited to, being adequately documented.

Questioned costs: $21,390

Context: Out of 51 costs that were sampled, there were 8 items for which there was no adequate documentation in order for the amounts to be considered allowable under cost principles. Additionally, there were 4 payroll items in which there was no adequate documentation in order to substantiate that the employee's time was properly charged to the federal award.

Cause: The documentation was not retained in a central location, and there was turnover within members of management who were responsible for administering the federal award.

Effect: Program requirements are at risk of not being met and there are known and likely questioned costs.

Recommendation: The Organization should maintain adequate documentation to include third party invoices, payroll registers, and time sheets which clearly document costs allocated and chargeable to each federal award, and the documentation should be stored in a central location.

View of Responsible Official and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Condition - Material Weakness: Expenditures charged to the federal program were not requested for reimbursement in accordance with cash management principles.

Criteria: 48 CFR 52 requires that entities request reimbursement for only contract costs that have already been paid or costs incurred and paid with 30 days of the request to the federal government for reimbursement.

Questioned costs: $0.

Context: For all 12 months during the Organization's fiscal year, the amounts requested for reimbursement did not agree with the Organization's detail of costs incurred on the federal award.

Cause: Those involved in administering the award did not submit the requests for reimbursement in an amount equal to the costs incurred, and there was turnover within members of management who were responsible for administering the federal award.

Effect: The Organization was unable to show compliance with the requirements of cash management, and program requirements are at risk of not being met.

Identification as repeat finding: N/A.

Recommendation: The Organization should submit requests for reimbursement in amounts equal to the costs incurred under the federal award program, and the reimbursement requests should be reviewed independent of preparation prior to being submitted.

View of Responsible Official and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Recommendation: The Organization should improve processes and procedures to ensure that adequate documentation is maintain, and that reports are reviewed for accuracy independent of preparation.

View of Responsible Official and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Identification as repeat finding: N/A.

Condition - Material Weakness: Reports required under the federal program were not completed accurately.

Criteria: Federal Financial Report ("FFR") SF-425.

Questioned costs: $0.

Context: 2 out of 2 federal financial reports tested were not accurate as the amounts received and disbursed under the grant did not agree with the amounts received and disbursed under the grant agreements.

Cause: The records and documentation retained under the federal award program were inadequate, and there was turnover within members of management who were responsible for administering the federal award.

Effect: Without an effective internal control system over reporting, untimely and inaccurate reporting could result in the misrepresentation of data and could adversely affect program outcomes and future funding.