MercyFirstNon-Profit

Criteria: According to the Uniform Guidance, recipients must submit a data collection form (DCF) that states whether the audit was completed and provide information about the auditee, its federal programs, and the results of the audit submitted within the earlier of 30 days after receipt of the auditor’s report, or nine months after the end of the audit period. Condition: During our audit, we noted that the DCF for the reporting period ended June 30, 2023 was not filed with the Federal Audit Clearinghouse timely. Cause: The late filling was primarily due to significant turnover in the senior management team, including the departure of the Chief Financial Officer (CFO) and several key accounting personnel during the critical period for year-end closing and reporting. This turnover led to a temporary gap in leadership and expertise, causing delays in the finalization and review of the financial statements. Effect: The delay in filling resulted in non-compliance with regulatory requirements, this could impact affect future funding from various agencies. Questioned Costs: None noted. Context: This was a condition noted per review of MercyFirst’s compliance with the reporting requirements. Recommendation: We recommend that the MercyFirst implements a more robust succession and contingency planning process to ensure continuity in its financial reporting and management functions. This could include cross-training of personnel, maintain up-to-date documentation of financial processes, and establishing interim leadership roles to be filled in the event of unexcepted departures. Furthermore, the entity should consider engaging interim financial management support to bridge any gaps during periods of transition. Views of Responsible Officials: MercyFirst agrees with the finding identified. MercyFirst’ response to the finding is described in the accompanying management’s correction action plan.

Criteria: According to the Uniform Guidance, recipients must submit a data collection form (DCF) that states whether the audit was completed and provide information about the auditee, its federal programs, and the results of the audit submitted within the earlier of 30 days after receipt of the auditor’s report, or nine months after the end of the audit period. Condition: During our audit, we noted that the DCF for the reporting period ended June 30, 2022 was not filed with the Federal Audit Clearinghouse timely. Cause: The late filling was primarily due to significant turnover in the senior management team, including the departure of the Chief Financial Officer (CFO) and several key accounting personnel during the critical period for year-end closing and reporting. This turnover led to a temporary gap in leadership and expertise, causing delays in the finalization and review of the financial statements. Effect: The delay in filling resulted in non-compliance with regulatory requirements, this could impact affect future funding from various agencies. Questioned Costs: None noted. Context: This was a condition noted per review of MercyFirst’s compliance with the reporting requirements. Recommendation: We recommend that the entity implements a more robust succession and contingency planning process to ensure continuity in its financial reporting and management functions. This could include cross-training of personnel, maintain up-to-date documentation of financial processes, and establishing interim leadership roles to be filled in the event of unexcepted departures. Furthermore, the entity should consider engaging interim financial management support to bridge any gaps during periods of transition. Views of Responsible Officials: MercyFirst agrees with the finding identified. MercyFirst’ response to the finding is described in the accompanying management’s correction action plan.

2021-001 ? Timecard Approvals ? Significant Deficiency Information on Federal Program(s) - U.S. Department of Health and Human Services ALN: 93.676 ALN Name: Unaccompanied Alien Children Program Criteria ? The Code of Federal Regulations 2 CFR section 200.303 requires that non-Federal entities receiving Federal funds establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Condition ? During our testing of payroll transactions, we noted the following exceptions: ? Seven of the 40 payroll related expenditures sampled did not have necessary supervisor approvals of the timecards related to the time period worked. Cause - Policies and procedures were not appropriately adhered to in certain instances to ensure that supervisory approval of employee time sheets was documented and maintained to evidence that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect or Potential Effect ? Failure to properly review and approve employee timecards could lead to unallowable expenditures being claimed as federal expenditures. Questioned Costs - There are no questioned costs related to this finding. Context ? We tested a sample of 40 items related to payroll expenditures and found seven exceptions as noted in the condition. This is a condition identified per review of MercyFirst?s compliance with specified requirements using a statistically valid sample. Repeat Finding - This is not a repeat finding from prior year. Recommendation - We recommend that MercyFirst ensure its policies and procedures are followed on a consistent basis. Views of Responsible Officials ? Management agrees with the federal award finding identified in the audit. Management?s response to this finding is described in the accompanying management?s corrective action plan.

2021-002 ? Reporting Information on Federal Program(s) - U.S. Department of Health and Human Services ALN: 93.676 ALN Name: Unaccompanied Alien Children Program Criteria ? In accordance with the U.S. Department of Health and Human Services requirements, certain financial reports are required to be filed on a semi-annual and annual basis. Such reports include the quarterly and final SF-425 Federal Financial Report within 90 days after the applicable reporting period. Condition ? In the sample selected for testing, it was found that 2 annual SF-425 Federal Financial Report, reports were not filed within the required time frame. Cause - Management has asserted that the reports were available prior to the submission date, however system problems were encountered which delayed submission beyond the normal due dates. Effect or Potential Effect ? For the year ended June 30, 2021, the Organization is not in compliance with the reporting requirements. Questioned Costs - There are no questioned costs related to this finding. Context ? The late reporting submissions are a condition identified per examination of the submitted reports, in comparison to the required submission deadlines for each applicable report. Repeat Finding - This is not a repeat finding from prior year. Recommendation - We recommend that management implement procedures to ensure timely filing is achieved for these reporting deadlines. Views of Responsible Officials ? Management agrees with the federal award finding identified in the audit. Management?s response to this finding is described in the accompanying management?s corrective action plan.