NEW ENGLAND FARM WORKERS' COUNCIL, INC.Non-Profit

2022-001 Condition: Cash receipts for the LIHEAP program are not adequately segregated from NEFWC's general operating accounts. Cause: NEFWC has a centralized deposit account to receive all Commonwealth of Massachusetts electronic program payments, including LIHEAP. Electronic payments received for LIHEAP are then transferred to the respective LIHEAP checking accounts to be available for the programs' disbursements. We noted that transfers to the LIHEAP account are made, but not in the exact amount when the cash is received. Some LIHEAP cash receipts remain in the centralized deposit account and are transferred when program disbursements are made. Criteria: The LIHEAP program grant receipts should be immediately deposited directly into the respective program checking accounts upon receipt. Effect or Possible Effect: Cash from the LIHEAP program could be utilized for NEFWC's other programs because it is not transferred from the centralized deposit account upon initial receipt. Recommendation: We recommend that management transfer the LIHEAP deposits immediately into the program's checking account or investigate the ability to have LIHEAP electronic payments made directly into the program checking account. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan. Corrective Action Planned: Program contract not renewed, effective end date September 30, 2022. Anticipated Completion Date: Due to Program termination no further action required.

2022-002 Condition: Funds in the restricted cash account at June 30, 2022 of $1,965,909 are deficient to the same program deferred revenue funds of $3,815,684 by $1,849,775 on June 31, 2022. Cause: Program funds were retained in the centralized deposit account and not transferred to the program checking account. Criteria: Restricted bank accounts should be equal to program funds on hand. Effect of Potential Effect: Non-transfers of program funds to the program checking account can result in non-compliant use of program funds. Recommendation: We recommend that management immediately transfer program funds to program restricted accounts and retain any unspent funds in the restricted accounts. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan. Corrective Action Planned: June 27, 2023. NEFWC entered into a repayment agreement with the Commonwealth of MA on June 27, 2023. Anticipated Completion Date: September 30, 2023.

2022-007 (Repeat Finding): ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: Management drawdowns of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year. Cause: There are two causes. First, management's routine grant drawdowns include more funds than needed for the LIHEAP program for incidentals and anticipated future costs. Therefore some of these LIHEAP drawdowns were not completely disbursed and $1,915,052 remains in deferred revenue at June 30, 2022. Second, a substantial portion of the COVID-19 LIHEAP ARPA grant was for Supplemental Benefits to prior year program participants. A drawdown of $11,675,500 was deposited to NEFWC's deposit account by Massachusetts DHCD in advance of the calculation and payment of client benefits related to these funds. The cash request was prepared and submitted by NEFWC on September 29, 2021 and approved by Massachusetts DHCD on September 29, 2021, and the receipt of funds by NEFWC was dated October 7, 2021. The calculation of the benefit amounts and recipients was subsequently performed by Massachusetts DHCD and NEFWC's payment of the client benefits, totaling $9,567,374, was paid on a check run dated November 1, 2021. As a result, the check run was $2,108,126 less than the advance cash receipt resulting in excess LIHEAP funds on- hand (deferred revenue). The total of these two causes is a deferred LIHEAP revenue balance at June 30, 2022 of $3,815,684. Criteria: Grant drawdowns should be made on a cost reimbursement basis and disbursed in accordance with cash management principles. Effect of Potential Effect: Management did not comply with cash management principles and as a result has deferred LIHEAP revenue of $3,815,684 at June 30, 2022. Recommendation: We recommend that management follow cash management principles and only draw down funds sufficient to reimburse actual expenditures. If excess funds are received they should be returned or accounted for in a subsequent funds request. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan. Corrective Action Planned: June 27, 2023. NEFWC entered into a repayment agreement with the Commonwealth of MA on June 27, 2023. Anticipated Completion Date: September 30, 2023.

2021-003

2022-008: ALN 93.568 LIHEAP/COVID-19 LIHEAP - Activities Allowed or Unallowed, Passthrough from Massachusetts Department of Housing and Community Development Condition: Receipts of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year, and LIHEAP restricted cash was deficient by $1,849,775 when comparing the June 30, 2022 LIHEAP restricted cash balance of $1,965,909 to the LIHEAP deferred revenue of $3,815,684, indicating unallowable use of LIHEAP program funds. The Activities Allowed or Unallowed compliance requirement is identified as not being subject to audit in the Compliance Supplement and auditors are not expected to test requirements. However, we became aware of the material cash deficiency and determined non-compliance with the general requirements of the Activities Allowed or Unallowed compliance requirement clearly exists. Cause: LIHEAP program funds, including those identified in Finding 2022-007, were not immediately transferred to and held in the LIHEAP program checking account. Because the funds were not transferred they were utilized for non-LIHEAP programs resulting in unallowable activities related to the LIHEAP funds. Criteria: LIHEAP grant funds should only be utilized for allowable LIHEAP program activities. Effect of Potential Effect: Management did not comply with allowable activities compliance requirements for the LIHEAP program and has a LIHEAP cash deficiency of $1,849,775 at June 30, 2022. Recommendation: We recommend that management follow the compliance requirements for the LIHEAP program and only utilize LIHEAP program cash for allowable program activities. Additionally, we recommend that management correct the cash deficiency. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan. Corrective Action Planned: June 27, 2023. NEFWC entered into a repayment agreement with the Commonwealth of MA on June 27, 2023. Anticipated Completion Date: September 30, 2023.

Corrective Action Plan for Current Year Findings Fiscal Year Ended June 30, 2021 June 30, 2022 New England Farm Workers? Council, Inc. respectfully submits the following Corrective Action Plan for the fiscal year ended June 30, 2021. The audit findings from the Schedule of Findings and Questions Costs for the year ended June 30, 2021, are discussed below. The findings are numbered consistently with the number assigned in the schedule provided by the independent accounting firm Maletta & Company, CPAs, 43 Enterprise Drive, Bristol, Connecticut, 06010. Financial Statement Findings 2021-001 (Repeat Finding) Condition: Cash receipts for the LIHEAP and CCRR programs are not adequately segregated from NEFWC?s general operating accounts. Cause: NEFWC has centralized deposit account to receive all Commonwealth of Massachusetts electronic program payments, including LIHEAP and CCRR. Electronic payments received for LIHEAP and CCRR are then transferred to the respective LIHEAP and CCRR checking accounts to be available for the programs? disbursements. We noted that transfers to the LIHEAP and CCRR accounts are made, but not in the exact amount when the cash is received. Some LIHEAP and CCRR cash receipts remain in the centralized deposit account and are transferred when program disbursements are made. Criteria: The LIHEAP and CCRR program grant receipts should be immediately deposited directly into their respective checking accounts upon receipt. Effect or Possible Effect: Cash from the LIHEAP and CCRR program could be utilized for NEFWC?s other programs because it is not transferred from the centralized deposit account upon initial receipt. Recommendation: We recommend that management transfer the LIHEAP and CCRR deposits immediately into the respective program?s checking accounts or investigate the ability to have LIHEAP and CCRR electronic payments made directly into the respective program checking accounts. Views of Responsible Officials: Management agrees with the finding. Name of Contact Person Responsible for Corrective Action: Andrew Hryniewicz, CFO Corrective Action Planned: During FY 2022, Management has implemented a process to transfer LIHEAP funds received to the restricted bank account. No program funds will reside in the centralized deposit fund. Additionally, as of June 30, 2021, New England Farm Workers? Council, Inc. no longer operated the CCRR program and has no CCRR funds. Anticipated Completion Date: Completed. 2021-002 (Repeat Finding) Condition: Funds in the restricted cash accounts at June 30, 2021 of $1,806,782 are deficient to program deferred, revenue funds of $2,075,239 by $268,457 on June 30, 2021. Cause: Management?s drawdowns for program funds were retained in the centralized deposit account and not transferred to the program checking accounts, therefore aggregation of bank accounts including negative cash balances reflect negatively on restricted cash accounts. Criteria: Restricted bank accounts should be equal to program funds on hand. Effect of Potential Effect: Non transfer of program funds to program checking accounts could result in temporary non-compliant use of program funds. Recommendation: We recommend that management immediately transfer program funds to program restricted accounts and retain any unspent funds in restricted accounts. Views of Responsible Officials: Management agrees with the finding. Name of Contact Person Responsible for Corrective Action: Andrew Hryniewicz, CFO Corrective Action Planned: During FY 2022, Management has implemented a process to transfer LIHEAP funds received to the restricted bank account. No program funds will reside in the centralized deposit fund. Additionally, as of June 30, 2021, New England Farm Workers? Council, Inc. no longer operated the CCRR program and has no CCRR funds. Anticipated Completion Date: Completed. Federal Awards Finding 2021-003 Cash Management Condition: Management drawdowns of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year. Cause: Management drawdowns were for more funds than needed for the LIHEAP program. Some LIHEAP drawdowns were not disbursed and remain in deferred revenue at 6/30/2021. Criteria: Grant drawdowns should be made on a cost reimbursement basis and disbursed in accordance with cash management principles. Effect of Potential Effect: Management did not comply with cash management principles and as a result has deferred LIHEAP revenue of $2,052,979 at 6/30/2021. Recommendation: We recommend that management follow cash management principles and only draw down funds sufficient to reimburse actual expenditures. Views of Responsible Officials: Management agrees with the finding. Name of Contract Person Responsible for Corrective Action: Andrew Hryniewicz, CFO Corrective Action Planned: Management has ensured the program drawdowns were spent by the end of the program year (September 30, 2021) and after the annual program reconciliation any remaining unspent funds were returned. During FY 2022, Management has implemented new procedures to only request benefit funds equal to the assistance benefit amounts that will be paid out by each month?s end. Anticipated Completion Date: Completed. With respect to this document, for further information, please contact Daniel Knapik, Executive Director.

2020-007

2020-006 Cash Management Condition: Management drawdowns were more than DOL NFJP grant expenses at year end. Cause: Management drawdowns of excess funds were due to concerns with COVID-19, and the ability to reprogram unspent funds. These excess drawdowns occurred in late June 2020. DOL NFJP funds remained in deferred revenue at 6/30/2020. Criteria: Grant drawdowns should be made on a cost reimbursement basis and disbursed in accordance with cash management principles. Effect of Potential Effect: Management did not comply with cash management principles and as a result has deferred DOL NFJP revenue of $304,351 at 6/30/2020. Recommendation: We recommend that management follow cash management principles and only draw down funds sufficient to reimburse actual expenditures or receive written authorization to deviate from compliance regulations. Views of Responsible Officials: Management agrees with the finding. Name of Contact Person Responsible for Corrective Action: John D. Motto, CFO Corrective Action Planned: Due to the COVID-19 pandemic and no Federal budget, management drew down fund in excess of cash needed to ensure program continuity due to uncertainty at the time. All funds on hand as of June 30, 2020 were expended by September 30, 2020. Management is aware of the compliance requirement and will not draw down funds in excess of program expenses in the future, unless given appropriate authorization. Anticipated Completion Date: Completed.

2020-007 Cash Management Condition: Management drawdowns of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year. Cause: Management drawdowns were for more funds than needed for the LIHEAP program. Some LIHEAP drawdowns were not disbursed and remain in deferred revenue at 6/30/2020. Criteria: Grant drawdowns should be made on a cost reimbursement basis and disbursed in accordance with cash management principles. Effect of Potential Effect: Management did not comply with cash management principles and as a result has deferred LIHEAP revenue of $2,052,979 at 6/30/2020. Recommendation: We recommend that management follow cash management principles and only draw down funds sufficient to reimburse actual expenditures. Views of Responsible Officials: Management agrees with the finding. Name of Contact Person Responsible for Corrective Action: John D. Motto, CFO Corrective Action Planned: Management has ensured the program drawdowns were spent by the end of the program year (September 30, 2020). Management has implemented new procedures to only request benefit funds equal to the assistance benefit amounts that will be paid out by each month's end. Anticipated Completion Date: Completed.