WESTERN CONNECTICUT AREA AGENCY ON AGING, INC.

Finding No. 2022-001 (Repeat of 2021-004): Identifying Federal Award Information of Pass-Through Funds to Subrecipients Assistance Listing Program Title and Number: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 ? American Rescue Plan Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 - Consolidated Appropriations Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 Nutrition Services Incentive Program 93.053 Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services 93.043 National Family Caregiver Support - Title III, Part E 93.052 Social Services Block Grant 93.667 Coronavirus Relief Fund 21.019 Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Aging and Disability Services Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CFR Section 200.332; (2) all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award; and (3) any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility for the federal award. Condition The audited financial statements of subrecipients reviewed during the audit did not appropriately identify federal subawards passed through by the Agency. Cause The Agency did not properly communicate federal subaward information to subrecipients. Effect The financial statements of the subrecipients did not accurately identify federal subaward information. Questioned Costs None. Context The Agency did not have a formalized process to communicate federal subaward information to subrecipient organizations. Recommendation We recommend that all necessary efforts be taken to identify and communicate the federal subaward information for funds passed through to subrecipients. This includes a recommendation that the Agency verifies that the reported expenditures for funds passed through to subrecipients is in agreement with the federal subaward information as reported on the financial statements of the subrecipients. Views of Responsible Officials In the past, the Agency provided confirmations to subrecipients as requested. Going forward, the source of funding along with the breakout by financial assistance listing number will be clearly communicated to all subrecipients. The Agency will also ensure that reported expenditures by each subrecipient reconciles to the Agency?s advances to that subrecipient during the review of the subrecipient audit reports.

Finding No. 2021-001 (Repeat of 2020-01): Financial Reporting Criteria An accounting system and effective internal control environment should support the preparation of the financial statements in accordance with Generally Accepted Accounting Principles (?GAAP?) and grant reports in accordance with Federal and State compliance requirements. Condition In fiscal year 2021, the Agency?s accounting processes and internal controls over financial reporting did not support generating complete and accurate financial information, in accordance with GAAP. The books and records were maintained on the cash basis of accounting throughout the year and then adjusted at year end to reflect accrual accounting. As a result of this, the books and records were not closed and finalized until many months after year end. In addition, many accounting adjustments were needed before starting the audit process. Grant reports submitted to governmental agencies throughout the year are on the cash basis, even if the accrual basis was required. Due to adjustments to the books and records, grant reports required numerous revisions and resubmissions. Cause Ineffective accounting process and internal controls over financial reporting. Effect Financial and grant reports generated may be incomplete and inaccurate. Questioned Costs None. Context The Agency had ineffective accounting processes and internal controls over financial reporting. Identification of Repeat Finding The finding was first reported as Finding No. 2019-01 for the fiscal year ended September 30, 2019 and Finding No. 2020-01 for the fiscal year ended September 30, 2020. The finding is being repeated in the current year. Recommendation We recommend that the Agency make enhancements to their accounting process and internal controls over financial reporting, in order to effectively generate complete and accurate financial and grant reports on a timely basis. Views of Responsible Officials The Agency has brought on new financial staff and hired a consultant to assist with addressing the accounting software limitations and reporting functionality. The Agency has implemented a new accounting system as of October 1, 2021, which included building a new chart of accounts that merged all accounts into one company, using accrual accounting and building grant reporting in Sage.

Finding No. 2021-002 (Repeat of 2020-02): Journal Entries Criteria Appropriate policies and procedures should be in place regarding the creating, review and approval, and posting of journal entries within the accounting software. The process should be maintained and consistently followed. Condition Numerous individuals within the accounting and finance function have the ability to record journal entries directly to the accounting software, without prior supervisory review and approval. Cause Lack of appropriate procedures and controls over the journal entry process. Effect Journal entries posted to the accounting software are not always complete and accurate and representative of the transaction being recorded. Questioned Costs None. Context The Agency was lacking appropriate procedures and controls over the journal entry process. Identification of Repeat Finding The finding was first reported as Finding No. 2020-02 for the fiscal year ended September 30, 2020. The finding is being repeated in the current year. Recommendation We recommend that the Agency review and make adjustments to their journal entry process to ensure entries are accurate and have been reviewed and approved by a supervisor prior to recording. This may require changes to the financial staffing and processing as to assure adjustments are timely. Accounting and finance staff should understand and adhere to the process. Views of Responsible Officials A new Journal Entry process has been put in place at the Agency. Journal entries will only be entered by the Accounting Assistant after they have been reviewed and approved by the Finance Director. Journal entries completed by the Finance Director will be reviewed by other Finance staff and approved, then entered by the Accounting Assistant.

Finding No. 2021-003 (Repeat of 2020-04): Annual Audit Submission Assistance Listing Program Title and Number: All Federal Agency: All Pass-through Entity: All Criteria As per the Code of Federal Regulations, Section 200.512 - Report Submission, the audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors? report, or nine months after the end of the audit period. The due date for the submission was June 30, 2022. Condition The audit and reporting package were not submitted by the due date June 30, 2022. Cause The financial statements and federal single audit were not able to be completed by the due date. Effect The audit and federal reporting package were not filed on time. Questioned Costs None. Context The financial statements and federal single audit were not able to be completed by the due date. Identification of Repeat Finding The finding was first reported as Finding No. 2020-04 for the fiscal year ended September 30, 2020. The finding is being repeated in the current year. Recommendation We recommend that all necessary efforts be taken to ensure timely submission of the audit and federal reporting package. This includes a recommendation that the Agency make enhancements to their accounting process and internal controls over financial reporting, in order to effectively generate complete and accurate financial and grant reports on a timely basis. Views of Responsible Officials The Agency has implemented a new accounting system as of October 1, 2021, including changes to their accounting process and internal controls over financial reporting in order to provide complete and accurate financial and grant reports on a timely basis.

Finding No. 2021-004: Identifying Federal Award Information of Pass-Through Funds to Subrecipients Assistance Listing Program Title and Number: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 - Consolidated Appropriations Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 Nutrition Services Incentive Program 93.053 Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services 93.043 Social Services Block Grant 93.997 Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Aging and Disability Services Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CFR Section 200.332; (2) all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award; and (3) any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility for the federal award. Condition The audited financial statements of subrecipients reviewed during the audit did not appropriately identify federal subawards passed through by the Agency. Cause The Agency did not properly communicate federal subaward information to subrecipients. Effect The financial statements of the subrecipients did not accurately identify federal subaward information. Questioned Costs None. Context The Agency did not have a formalized process to communicate federal subaward information to subrecipient organizations. Recommendation We recommend that all necessary efforts be taken to identify and communicate the federal subaward information for funds passed through to subrecipients. This includes a recommendation that the Agency verifies that the reported expenditures for funds passed through to subrecipients is in agreement with the federal subaward information as reported on the financial statements of the subrecipients. Views of Responsible Officials In the past, the Agency provided confirmations to subrecipients as requested. Going forward, the source of funding along with the breakout by financial assistance listing number will be clearly communicated to all subrecipients. The Agency will also ensure that reported expenditures by each subrecipient reconciles to the Agency?s advances to that subrecipient during the review of the subrecipient audit reports.

Financial statement finding - financial reporting Criteria An accounting system and effective internal control environment should support the preparation of the financial statements in accordance with Generally Accepted Accounting Principles (GAAP) and grant reports in accordance with Federal and State compliance requirements. Condition In fiscal year 2020, WCAAA's accounting processes and internal controls over financial reporting did not support generating complete and accurate financial information, in accordance with GAA P. The books and record s were maintained on the cash basis of accounting throughout the year and then adjusted at year end to reflect accrual accounting. As a result of this, the books and records were not closed and finalized until many months after year end. In addition, many accounting adjustments were proposed during the audit process. Grant reports submitted to governmental agencies throughout the year are on the cash basis, . even if the accrual basis was required. Due to adjustments to the books and records, grant reports required numerous revisions and resubmissions. Cause Ineffective accounting process and internal controls over financial report ing. Effect or Potential Effect Financial and grant reports generated may be incomplete and inaccurate. Questioned Costs None. Context The context relates to the preparation of reliable financial and grant reports throughout the year and at year end. Identification of Repeat Fin ding This finding was first reported for the fiscal year ended September 30, 2019. The finding is being repeated in the current year. Recommendation We recommend that WCAAA make enhancements to their accounting process and internal controls over financial reporting, in order to effectively generate complete and accurate financial and grant reports on a timely basis. Views of Responsible Officials There was a change in staff with a lapse in filling the Finance Director position. The new Director started on May 12, 2020. WCAAA has brought on new financial staff and hired a consultant to assist with addressing the accounting software limitations and reporting functionality. WCAAA began building improvements in 2020, which included building a new chart of accounts which merges all accounts into one company, uses accrual accounting and builds grant reporting in SAGE. In the interim, Job reports are being used for grant reporting and financial reports to the Board using SAGE reports.

Financial statement finding - journal entries - Criteria Appropriate policies and procedures should be in place regarding the creating, review and approval, and posting of journal entries within the accounting software. The process should be maintained and consistently followed. Condition Numerous individuals within the accounting and finance function have the ability to record journal entries directly to the accounting software, without prior supervisory review and approval. Cause Lack of appropriate procedures and controls over the journal entry process. Effect or Potential Effect Journal entries posted to the accounting software are not always complete and accurate and representative of the transaction being recorded. Questioned Costs None. Context The context relates to deficiencies in the journal entry process. Recommendation We recommend that WCAAA review and make adjustments to their journal entry process to ensure entries are accurate and have been reviewed and approved by a supervisor prior to recording. This may require changes to the financial staffing and processing as to assure adjustments are timely. Accounting and finance staff should understand and adhere to the process. Views of Responsible Officials With the hiring of new staff this year, changes were needed to the Journal Entry procedure and process. The Journal Entry process has been put in place at WCAAA. Going forward, journal entries will only be entered by the Accounting Assistant after they have been reviewed and approved by the Finance Director. Journals completed by the Finance Director will be reviewed by other Finance staff and approved, then entered by the Accounting Assistant. Since SAGE does not assign journal numbers, journals will be given a unique identifier by the Accounting Assistant and kept by Unique Identifier in a file.

Federal Program Information Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department on Aging and Disability Services CFDA Numbers: 93.044 - COVID-19 - CARES Act for Supportive Services Under Title III-B of the Older Americans Act; 93.045 - COVID-19 - Title III-C-2 Home Delivered Meals - CARES Act for Nutrition Services Under Title III-C of the Older Americans Act, COVID-19 - Title III-C-1 Congregate Meals (FFCRA), COVID-19 - Title III-C-2 Home Delivered Meals (FFCRA) Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CRF Section 200.332; (2) all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award; and (3) any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility for the federal award. Condition WCAAA was awarded Federal COVID-19 funding through the CARES Act and FFCRA, of which the Organization passed through a portion to their existing subrecipients. WCAAA did not amend their existing subaward contracts nor create new contracts to cover the subawards of such COVID-19 funds. Due to the timing of receipt of the funds and distribution, the communication of this additional funding and related requirements was done through a verbal process between the Organization and their subrecipients. The intended use of the funds was similar to the contracts that were already in place with the subrecipients. Cause Management was unaware of the requirement to have the additional Federal COVID-19 funding covered by a contract. Effect or Potential Effect The CARES Act and FFCRA funds that WCAAA received and passed through to subrecipients were not covered under an executed contract. Questioned Costs None. Context The finding is applicable to all CARES Act and FFCRA funds that were passed through to subrecipients . Recommendation We recommend that WCAAA have executed contracts for all subawards made, which include all of the required information as prescribed in 2 CRF Section 200.332. Views of Responsible Officials WCAAA received COVID emergency funding to address emergent community needs, nutrition providers were notified by email of the rate increase. The funding was disbursed to our nutrition provider subrecipients and an amendment for a new rate to their current contracts was not completed to reflect the additional emergency funding. This oversight has not occurred in the past and has been addressed internally. WCAAA has clarified that no payments are to be made without a fully executed contract/amendment.

Finding No. 2020-04: Annual Audit Submission Federal Program: All Federal Agency: All Federal Award Identification Numbers: All Pass-through Entity: All Criteria As per the Code of Federal Regulations, Section 200.512 - Report Submi ssion, the audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor ' s report, or nine months after the end of the audit period. The Office of Management and Budget (0MB) provided an additional extension for six months beyond the normal due date for auditees that had not filed their single audits with the Federal Audit Clearinghouse as of the date of the issuance of 0MB Memo M-21 -20, which was dated March 19, 2021. The normal due date for submission was June 30, 2021 and the extended due date was December 30, 2021. Condition The audit and reporting package were not submitted within the allowable extension period. Cause The fiscal year 2020 financial statements and federal single audit were not able to be completed by the extended due date granted by the 0 MB. Effect or Potential Effect The audit and federal reporting package were not filed on time. Questioned Costs None. Context The finding relates to the requirements of the annual report submission of the audit and federal reporting package. Recommendation We recommend that all necessary efforts be taken to ensure timely submission of the audit and federal reporting package. This includes a recommendation that WCAAA make enhancements to their accounting process and internal controls over financial reporting, in order to effectively generate complete and accurate financial and grant reports on a timely basis. Views of Responsible Officials The audit being late will not happen again due to new systems and controls.

Finding No. 2019-001: Financial Reporting Criteria An accounting system and effective internal control environment should support the preparation of the financial statements in accordance with generally accepted accounting principles and grant reports in accordance with Federal and State compliance requirements. Condition The Organization?s current accounting system and financial close and reporting process does not support generating complete and accurate financial information. The current process is manual in nature and requires numerous and significant adjustments post close and during the audit process. As a result of this, complete and accurate internal financial reports may not be generated throughout the year for management and the board?s review. In addition, grant reports require revisions and resubmissions. Cause Ineffective accounting system and manual reporting processes. Effect Financial and grant reports generated may be incomplete and inaccurate. Business decisions may not be based on complete and accurate financial information. Questioned Costs None. Context The condition relates to the preparation of reliable financial and grant reports throughout the year and at year end. Recommendation We recommend that the Organization make enhancements to their financial close and reporting process to effectively generate complete and accurate financial and grant reports on a timely basis. Furthermore, manual processes should be reviewed for more efficient and appropriate alternatives. Views of Responsible Officials WCAAA has brought on new financial staff and hired a consultant to assist with addressing the accounting software limitations and reporting functionality. WCAAA is building a new accounting system and processes to eliminate manual adjustments post close and to generate accurate internal and external financial reports.

Finding No. 2019-002: Management of Governmental Grant Funds Federal Program Information Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Rehabilitation Services CFDA Number: 93.052 - National Family Caregiver Support Program Criteria Organizations receiving governmental grant funds should have the necessary procedures in place in order to effectively budget for and expend funds in accordance with the contracts. Condition During the fiscal year, the Organization did not effectively manage program budgets for the Statewide Respite Care and National Family Caregiver Support programs to ensure the maximization of services provided to eligible clients and, in turn, expending of program funds allocated and available to them. Cause Ineffective monitoring of program budgets and clients served. Effect Governmental grant funds may not be utilized to the maximum extent to provide the services in which they are intended for. Questioned Costs None. Context The revenue received from Federal and State governmental grants and contracts accounts for approximately 90% of the Organization?s total revenue. Recommendation We recommend that the Organization enhance procedures to effectively monitor their governmental grant funded programs to ensure funds are utilized in the most effective and appropriate way, in accordance with the contracts and in order to maximize services provided. Views of Responsible Officials This issue has been addressed in 2020 with increasing referrals to State Respite Program and tighter controls of monthly budget and spending/reporting by Program Coordinators to Financial Director and Executive Director on both National Family Caregiver and Statewide Respite Programs so this minimal carryover funding. However, due to COVID-19 restrictions on external provider agencies, it has been increasingly difficult to spend both funding sources since March 2020 due to caregivers and clients refusing in-home and community-based respite services.

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