STEPS TO RECOVERY HOMES

Finding: 2024-01 – Single Audit Not Submitted Timely. Criteria: Title 2, Subtitle A, Chapter II, Part 200, Subpart F, Section 501 (a) of the Code of Federal Regulations states “A non-Federal entity that expends $1,000,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part”. Title 2, Subtitle A, Chapter II, Part 200, Subpart F, Section 512(a)(1) states “The audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier).”

Condition: For the fiscal year ended December 31, 2024, the Organization did not submit the audit, collection form and the reporting package within the stipulated timeframe.

Cause: The Organization could not secure an accounting firm to complete the audit on time.

Effect: The audit, the data collection form, and the reporting package were not submitted timely.

Recommendation: We recommend that in the future, the Organization engage an accounting firm upon grant award, when the grant contains an audit submission requirement.

Management’s Response: Management of the Organization has an accounting firm engaged who will perform future required audits.

Finding: 2023-01 – Functional Classification of Income and Expenses.

Criteria: Title 2, Subtitle A, Chapter II, Part 200, Subpart E of the Uniform Guidance states “The accounting practices of the recipient and subrecipient must be consistent with these cost principles and support the accumulation of costs as required by these cost principles, including maintaining adequate documentation to support costs charged to the Federal award”. This includes having an accounting system structure that effectively records receipts and expenditures of program funds separately and consistently in the appropriate functional cost category for each program, award or grant.

Condition: For the fiscal year ended December 31, 2023, the Organization did not utilize their accounting system effectively in the recordation of expenditures in order to easily identify individual grant expenditures. Grant expenditures were inconsistently applied across multiple grant classes, making it difficult to determine total grant expenditures by grant.

Cause: The Organization did not understand how to appropriately use the classing system in their accounting software and did not classify expenses by function in a consistent manner.

Effect: Reports identifying grant expenditures did not accurately accumulate expenditures by grant.

Recommendation: We recommend the Organization become familiar with the proper utilization of the accounting system’s classing function and reorganize classes such that all grant funding can be consistently classified by grant. Alternatively, the Organization may prefer to utilize the project function of the system.

Finding: 2023-02 – Single Audit Not Submitted Timely. Criteria: Title 2, Subtitle A, Chapter II, Part 200, Subpart F, Section 501 (a) of the Code of Federal Regulations states “A non-Federal entity that expends $1,000,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part”. Title 2, Subtitle A, Chapter II, Part 200, Subpart F, Section 512(a)(1) states “The audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier).”

Condition: For the fiscal year ended December 31, 2023, the Organization did not submit the audit, collection form and the reporting package within the stipulated timeframe.

Cause: The Organization could not secure an accounting firm to complete the audit on time.

Effect: The audit, the data collection form, and the reporting package were not submitted timely.

Recommendation: We recommend that in the future, the Organization engage an accounting firm upon grant award, when the grant contains an audit submission requirement.

Management’s Response: Management of the Organization has an accounting firm engaged who will perform future required audits.