Catalyst CT, Inc.

Finding 2024-001: Significant Deficiency - Internal Control Over Compliance Grantor: Corporation for National and Community Service Federal Assistance Listing Number: 94.006 Federal Program Name: AmeriCorps State and National Pass-Through Entity: State of Connecticut Office of Higher Education Pass-Through Entity Identifying Number: 12060-DHE66530-20333-81001-174364 Criteria: Management is responsible for the design, implementation and operation of controls over compliance including those related to reporting requirements. Reporting requirements are determined by the grantors and specified within each grant document. Condition/Context: The Organization has various contracts with the pass-through entity, each of which includes various programmatic and financial reporting requirements. Among these requirements is a monthly Period Expense Report (PER) that must be submitted within 15 days after month-end. During our audit, we identified two PERs out of a sample of 6 reports, for the month of September 2024, that were submitted 25 days and 17 days after month-end, respectively. The sample was not a statistically valid sample. Cause: Financial information necessary to complete the PERs was not available in time to meet the filing deadlines. Effect: Two PERs for the month of September 2024 were filed late. Questioned Costs: None. Recommendation: We recommend that Management stress to its staff the importance of timely reporting and encourage them to utilize all notification / reminder tools available to them to ensure that filing deadlines are being actively tracked, managed and met. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the above finding. Effective January 2025, the Organization has transferred all accounting and finance responsibilities to an in-house finance/accounting department. As a result of this transition, reporting is handled by a central group with consistent reporting processes and procedures as well as improved internal notification tools to help track and manage financial reporting.

Effective January 2025, Catalyst CT, Inc. transferred all accounting and finance functions in-house after terminating a contract with a third-party accounting firm. The in-house transition process was completed in phases, commencing in October 2023 with the hiring of a VP of Finance (CFO equivalent) who reviewed the in-place accounting/finance model. Based on the review, an in-house Controller was hired in March 2024, and a Staff Accountant was hired in December 2024. Transitioning of financial report preparation in-house began in the March 31, 2024 reporting period with a goal of having all reporting transferred in-house by year-end. As a result of this transition, reporting is handled by a central group of finance/accounting associates with consistent processes as well as improved internal notifications, including a Grant Cover Sheet, a Grant Cover Sheet Budgets spreadsheet and regular spend rate meetings with relevant senior program directors. Regarding this particular finding, until the end of year 2024, many past reports were a few days to a few weeks overdue because monthly/quarterly books weren’t typically closed by the third-party accountants until at least the third week of the following month. This is not atypical, a monthly closing date within 15 days is usually an exception rather than a rule. Furthermore, most of our grantors were not flummoxed by this. Those who had issues with reporting past the 15th would usually communicate this to us and we would arrange to provide estimated figures by the 15th. Given the nature of our grants, the newly formed in-house accounting group, as of January 1, 2025 has expedited the closing process to occur before the 15th of each month, allowing Catalyst CT, Inc. to meet reporting deadlines with that deadline to be more easily met.

2023-002 Significant Deficiency Grantor U.S. Department of Health and Human Services Federal Assistance Listing Number 93.788 Federal Program Name Opioid STR Pass-Through Entity State of Connecticut Department of Mental Health and Addiction Services Award Number 23MHA1041-1 Compliance Requirements Reporting Requirements Type of Finding Significant Deficiency Criteria The Department of Mental Health and Addiction Services (DMHAS) requires monthly reporting on mini-grant performance by the 10th of each month and naloxone training and kit distribution by the 8th of each month. Condition Of the required 12 monthly reports on mini-grant performance, filed between January 2023 and December 2023, two reports were filed late by two days. Of the required 12 monthly reports on naloxone training and kit distribution, filed between January 2023 and December 2023, four reports were filed late between one and four days. Cause RYASAP was not able to finalize the information needed for the required monthly reports in time to meet the filing deadlines. Effect or Potential Effect Late reporting to DMHAS. Questioned Costs None. Context Out of 24 required monthly reports due between January 2023 and December 2023, six reports were filed late between one and four days of the required due dates. Recommendation We recommend that RYASAP focus on the dates that required reports are due to the grantor and make every possible effort to file the required reports within the due dates. Views of Responsible Official and Planned Corrective Actions RYASAP concurs with the above finding. Corrective Action: Effective January 2025, RYASAP has transferred all accounting and finance responsibilities to an in-house finance/accounting department. The process of transitioning to this model commenced in October 2023 with the hiring of a Vice President of Finance (a CFO equivalent) who reviewed the current accounting/finance reporting model. Shortly thereafter, based on the VP of Finance’s recommendation, a Controller was hired (March 2024). Later in the year, an additional Staff Accountant was hired (December 2024). Transitioning of financial report preparation began in very early 2024 with almost all reporting being transitioned for the March 31, 2024 reporting period. As a result of this transition, reporting is handled by a central group with consistent reporting processes and procedures as well as improved internal notification tools, including a Grant Cover Sheet in which the program directors, the Director of Development, and the finance/accounting team review at or prior to contract receipt and a Grant Cover Sheet Budgets Report which helps the Finance/Accounting team track and manage financial reporting. See RYASAP’s Corrective Action Plan for further responses to the above finding.

Effective January 2025, RYASAP has transferred all accounting and finance responsibilities to an in-house finance/accounting department. The process of transitioning to this model commenced in October 2023 with the hiring of a Vice President of Finance (a CFO equivalent) who reviewed the current accounting/finance reporting model. Shortly thereafter, based on the VP of Finance’s recommendation, a Controller was hired (March 2024). Later in the year, an additional Staff Accountant was hired (December 2024). Transitioning of financial report preparation began in very early 2024 with almost all reporting being transitioned for the March 31, 2024 reporting period. As a result of this transition, reporting is handled by a central group with consistent reporting processes and procedures as well as improved internal notification tools, including a Grant Cover Sheet in which the program directors, the Director of Development, and the finance/accounting team review at or prior to contract receipt a7nd a Grant Cover Sheet Budgets Report which helps the Finance/Accounting team track and manage financial reporting.