EIN: 114438161
UEI: GSA_MIGRATION
Audited by: EIDE BAILLY LLP
Oversight agency: 17 [Department of Labor]
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Data as of September 2, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 8, 2021. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 8, 2021 (1820 days ago).
What is a management decision? →Eide Bailly LLP (EB) noted the following internal control issues.? Reintegration of Ex-Offenderso Five out of sixty expenditures tested lacked the required support to show that the hours billedby program employees were allocated in accordance with actual time spent rather thanpredetermined budgets.o There was no evidence of review retained for the indirect costs requested? Adult Education Basic Grants to Stateso Six out of sixty expenditures tested lacked the required support to show that the hours billed byprogram employees were allocated in accordance with actual time spent rather thanpredetermined budgets.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to the Organizationnot following written policies.Effect: Improper expenses may be paid and charged to the federal program or charged at the wrong amount.Questioned Costs: Employees? time charged to the program could be over or understated compared to actualtime worked on the program by an amount that has not been determined.Context/Sampling: For CFDA #17.270, a nonstatistical sample of 60 transactions out of 929 total transactionswere selected for testing, which accounted for $55,191 of $329,686 total federal program expenditures. ForCFDA #84.002A, a nonstatistical sample of 60 transactions out of 2,976 total transactions were selected fortesting, which accounted for $45,408 of $454,021 total federal program expenditures.Repeat Finding from Prior Year: Yes, prior year finding 2019-002.Recommendation: We recommend the Organization?s management implement a process that allows for actual hours for time spent to be billed to the program and ensure that supporting documents are retained.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2020-001 Allowable Costs, Activities AllowedMaterial NoncomplianceAllowable Costs, Activities AllowedMaterial Weakness in Internal Control over ComplianceU.S. Department of LaborReintegration of Ex-Offenders CFDA #17.270; YF-29241-16-60-A-4, YF-32165-18-60-A-4; July 1, 2018 to October 31, 2021U.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2019 to June 30, 2020Criteria: A complete system of internal controls requires all expenditures be properly approved and supportedby appropriate documentation. In addition, all expenditures charged to the federal programs are required to beallowable costs under the program and allocated in accordance with the Organization?s cost allocation plan.Condition: Eide Bailly LLP (EB) noted the following internal control issues.? Reintegration of Ex-Offenderso Five out of sixty expenditures tested lacked the required support to show that the hours billedby program employees were allocated in accordance with actual time spent rather thanpredetermined budgets.o There was no evidence of review retained for the indirect costs requested? Adult Education Basic Grants to Stateso Six out of sixty expenditures tested lacked the required support to show that the hours billed byprogram employees were allocated in accordance with actual time spent rather thanpredetermined budgets.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to the Organizationnot following written policies.Effect: Improper expenses may be paid and charged to the federal program or charged at the wrong amount.Questioned Costs: Employees? time charged to the program could be over or understated compared to actualtime worked on the program by an amount that has not been determined.Context/Sampling: For CFDA #17.270, a nonstatistical sample of 60 transactions out of 929 total transactionswere selected for testing, which accounted for $55,191 of $329,686 total federal program expenditures. ForCFDA #84.002A, a nonstatistical sample of 60 transactions out of 2,976 total transactions were selected fortesting, which accounted for $45,408 of $454,021 total federal program expenditures.Repeat Finding from Prior Year: Yes, prior year finding 2019-002.Recommendation: We recommend the Organization?s management implement a process that allows for actual hours for time spent to be billed to the program and ensure that supporting documents are retained.Views of Responsible Officials: Management agrees with the finding.
2020-001 Allowable Costs, Activities Allowed (All Major Programs)Material NoncomplianceAllowable Costs, Activities Allowed (All Major Programs)Material Weakness in Internal Control over ComplianceU.S. Department of LaborReintegration of Ex-Offenders CFDA #17.270; YF-29241-16-60-A-4, YF-32165-18-60-A-4; July 1, 2018 to October31, 2021U.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2019 to June 30, 2020Condition: Eide Bailly LLP (EB) noted the following internal control issues.? Reintegration of Ex-Offenders? Five out of sixty expenditures tested lacked the required support to show that the hours billed byprogram employees were allocated in accordance with actual time spent rather thanpredetermined budgets.? There was no evidence of review retained for the indirect costs requested.? Adult Education Basic Grants to States? Six out of sixty expenditures tested lacked the required support to show that the hours billed byprogram employees were allocated in accordance with actual time spent rather thanpredetermined budgets.Management?s Response and Corrective Action Plan:Training and changes were put in place in January 2020 to allow staff to enter multiple lines on timecards basedon daily hours worked. Staff entered time daily in assigned departments. In March 2020, HR added a process tostreamline the entry since the staff had many department allocations. At that time, staff was intended to updatethose buckets however the budget allocations were not updated and were not caught in the approval process.1. In January 2021, the CEO, HR, Accounting, and staff involved with grants met to determine the bestmethod to complete this task in the payroll system. It was decided to remove the process that was put inplace in March for streamlining entry of time.2. Staff will go back to entering each department daily beginning February 1, 2021 to be approved by theirsupervisor weekly. They are instructed to use actual time worked per department and to monitor thebudget separately.3. HR and Accounting are working with the payroll provider to see if further time tracking tools can be putin place to streamline the process in line with guidance.Contact Person: Stacey Bittner, ControllerAnticipated Completion Date: March 31, 2021
2019-002
Eide Bailly LLP (EB) noted the following internal control issues.? Although the reports were reviewed in accordance with the internal controls, four out of four reportstested were not submitted with accurate informationCause: Based on discussions with personnel, the errors in reports are due to turnover in program personnel.Effect: Inaccurate information may be provided to the funder regarding performance of the Organization.Questioned Costs: None reported.Context/Sampling: A nonstatistical sample of four of twelve reports submitted for the year were selected forreporting testing.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsthat would strengthen the internal controls surrounding the reporting process, record-keeping, and themanagement thereof.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2020-002 ReportingMaterial NoncomplianceReportingMaterial Weakness in Internal Control over ComplianceU.S. Department of LaborReintegration of Ex-Offenders CFDA #17.270; YF-29241-16-60-A-4, YF-32165-18-60-A-4; July 1, 2018 to October 31, 2021Criteria: The Organization is required to submit quarterly performance reports and narrative reports. Reports should be submitted timely in accordance with established requirements and should be reviewed by a supervisory individual prior to submission to ensure accuracy.Condition: Eide Bailly LLP (EB) noted the following internal control issues.? Although the reports were reviewed in accordance with the internal controls, four out of four reportstested were not submitted with accurate informationCause: Based on discussions with personnel, the errors in reports are due to turnover in program personnel.Effect: Inaccurate information may be provided to the funder regarding performance of the Organization.Questioned Costs: None reported.Context/Sampling: A nonstatistical sample of four of twelve reports submitted for the year were selected forreporting testing.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsthat would strengthen the internal controls surrounding the reporting process, record-keeping, and themanagement thereof.Views of Responsible Officials: Management agrees with the finding.
2020-002 ReportingMaterial NoncomplianceReportingMaterial Weakness in Internal Control over ComplianceU.S. Department of LaborReintegration of Ex-Offenders CFDA #17.270; YF-29241-16-60-A-4, YF-32165-18-60-A-4; July 1, 2018 to October31, 2021Condition: Eide Bailly LLP (EB) noted the following internal control issues.? While reviewed, four out of four reports tested were not submitted with accurate information.Management?s Response and Corrective Action Plan:Last year, Friendly House went through administrative changes, a new Vice President of Client Services wasappointed in this area in late October 2019 and the Program Manager resigned in March 2020 at that time a newProgram Leader was hired.The following was changed: The reports are written by the Program Leader and to ensure accuracy the VicePresident of Client Services reviews the reports prior to submission. The first documented time on this processwill be April 15, 2021.The Controller will review the documents quarterly to monitor the processes and make sure the amounts areaccurate.Contact Person: Jose J. Vaquera, Vice President of Client ServicesAnticipated Completion Date: April 15, 2021
The Organization has no documented internal controls for compliance with procurement, suspension,and debarment compliance requirement of Uniform Guidance as noted above. The Organization also does nothave a written policy related to procurement or established procedures in place related to suspension anddebarment.Cause: Based on discussions with personnel, the Organization was not aware of written policy requirements forprocurement.Effect: Inadequate controls could result in a reasonable possibility that the Organization would not have therequired documentation in place and would not be able to detect and correct noncompliance in a timelymanner.Questioned Costs: None reported.Context/Sampling: All costs subject to the requirement were subject to testing.Repeat Finding from Prior Year: No.Recommendation: We recommend implementing a system of internal controls over the procurement,suspension, and debarment compliance requirements.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2020-003 Procurement, Suspension, and DebarmentMaterial NoncomplianceProcurement, Suspension, and DebarmentMaterial Weakness in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationChild Nutrition Cluster CFDA #10.553, #10.555, #10.559; 07-86-11-000; July 1, 2019 to June 30, 2020Criteria: The Organization must establish procedures for procurement of equipment, real property, and otherservices funded by federal funds. The procurement records and files for purchases in excess of the micropurchase threshold shall include at the minimum the basis for contractor selection, justification for lack ofcompetition when competitive bids are not obtained, and basis for award cost or price. In addition, awardrecipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the centralcontractor registry.Condition: The Organization has no documented internal controls for compliance with procurement, suspension,and debarment compliance requirement of Uniform Guidance as noted above. The Organization also does nothave a written policy related to procurement or established procedures in place related to suspension anddebarment.Cause: Based on discussions with personnel, the Organization was not aware of written policy requirements forprocurement.Effect: Inadequate controls could result in a reasonable possibility that the Organization would not have therequired documentation in place and would not be able to detect and correct noncompliance in a timelymanner.Questioned Costs: None reported.Context/Sampling: All costs subject to the requirement were subject to testing.Repeat Finding from Prior Year: No.Recommendation: We recommend implementing a system of internal controls over the procurement,suspension, and debarment compliance requirements.Views of Responsible Officials: Management agrees with the finding.
2020-003 Procurement, Suspension, and DebarmentMaterial NoncomplianceProcurement, Suspension, and DebarmentMaterial Weakness in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationChild Nutrition Cluster CFDA #10.553, #10.555, #10.559; 07-86-11-000; July 1, 2019 to June 30, 2020Condition: The Organization has no documented internal controls for compliance with procurement, suspension,and debarment compliance requirement of Uniform Guidance as noted above. The Organization also does nothave a written policy related to procurement or established procedures in place related to suspension anddebarment.Management?s Response and Corrective Action Plan:Management is aware of this issue and in August of 2020 began working on this process to document internalcontrols and gather necessary information to build a procurement policy. Due to short staffing and minimaladministrative assistance, it is still in progress.1. Information was gathered on purchasing needs for the school and formulated into an action plan.2. Methods of procurement, potential vendors, and specified food needs were identified.3. The next steps are to design, document and implement a formal procurement plan and internal controlswith respect to the procurement, suspension, and debarment compliance requirements under the UniformGuidance. The Vice President of Elementary Education, Operations Manager and Controller will meetregarding the design, documentation, and implementation of this plan started in January 2021.Contact Person: Frank Lomeli, Vice President of Elementary EducationAnticipated Completion Date: April 1, 2021
Eide Bailly LLP (EB) noted that three out of forty files tested were missing review by programpersonnel. Of these, two were also missing required completed verification of eligibility forms.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to the Organizationnot following their control procedures with the remote environment caused by the COVID-19 pandemic.Effect: Ineligible individuals may receive service under the federal program without adequate documentation orapproval.Questioned Costs: None reported.Context/Sampling: A nonstatistical sample of 40 participants out of 568 total participants were selected foreligibility testing.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsto or implementation of policies and procedures that would strengthen internal controls surrounding theeligibility process, record-keeping and the management thereof.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2020-004 EligibilityNoncomplianceEligibilitySignificant Deficiency in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2019 to June 30, 2020Criteria: In order to be eligible for the program, the participants must meet certain age and other requirements,including U.S. residency or citizenship. Part of the Organization?s documentation to determine eligibility includesa component that all participants? eligibility is reviewed.Condition: Eide Bailly LLP (EB) noted that three out of forty files tested were missing review by programpersonnel. Of these, two were also missing required completed verification of eligibility forms.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to the Organizationnot following their control procedures with the remote environment caused by the COVID-19 pandemic.Effect: Ineligible individuals may receive service under the federal program without adequate documentation orapproval.Questioned Costs: None reported.Context/Sampling: A nonstatistical sample of 40 participants out of 568 total participants were selected foreligibility testing.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsto or implementation of policies and procedures that would strengthen internal controls surrounding theeligibility process, record-keeping and the management thereof.Views of Responsible Officials: Management agrees with the finding.
2020-004 EligibilityNoncomplianceEligibilitySignificant Deficiency in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2019 to June 30, 2020Condition: Eide Bailly LLP (EB) noted that three out of forty files tested were missing review by programpersonnel. Of these, two were also missing required completed verification of eligibility forms.Management?s Response and Corrective Action Plan:Last year, Friendly House went through administrative changes and a reorganization of staff responsibility. Duringthe reorganization of staff some file logs were mishandled regarding confirmation of student eligibility, thus whenfiles were reviewed and lacked notation and signatures. The new Program Manager?s adminis trativeresponsibilities, now, include the review of student file management and eligibility.1. On October 30, 2020, the Program Manager implemented a revised ?Internal Data Verification Checklist?form to be added on all our files to ensure all program participants meet the eligibility criteria.2. Beginning on January 11, 2021, a quarterly review process has been implemented to review files foraccuracy and compliance regarding several data points, including a staff member signature confirmingstudent eligibility.3. On January 20, 2021, the Program Manager will facilitate training on the new process and expectations ofcompliance. Staff will meet after each quarterly review to discuss findings, identify potential gaps ininternal processes, and implement solutions due to identified deficiencies.4. The Controller will review the reporting and monitor the processes each quarter.5. The next review of files will be completed by February 26, 2021.6. Beginning March 5, 2021, the Program Manager will meet with Vice President of Client Services to reportissues, success, and guidance after file reviews.Contact Person: Jose J. Vaquera, Vice President of Client ServicesAnticipated Completion Date: March 5, 2021
Eide Bailly LLP (EB) noted no documentation of the review for the number of automatically verifiedstudents submitted to the funder was retained.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to the Organizationnot following their control procedures.Effect: Inaccurate amounts could be requested by and provided to the Organization.Questioned Costs: None reported.Context/Sampling: All components subject to the requirement were subject to testing.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsto or implementation of policies and procedures that would strengthen internal controls surrounding theeligibility process, record-keeping and the management thereof.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2020-005 EligibilitySignificant Deficiency in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationChild Nutrition Cluster CFDA #10.553, #10.555, #10.559; 07-86-11-000; July 1, 2019 to June 30, 2020Criteria: While the Organization has received approval for the Community Eligibility Provision, the Organizationsubmits documentation to the funder yearly for the number of automatically verified students as a percentageof the total enrollment.Condition: Eide Bailly LLP (EB) noted no documentation of the review for the number of automatically verifiedstudents submitted to the funder was retained.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to the Organizationnot following their control procedures.Effect: Inaccurate amounts could be requested by and provided to the Organization.Questioned Costs: None reported.Context/Sampling: All components subject to the requirement were subject to testing.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsto or implementation of policies and procedures that would strengthen internal controls surrounding theeligibility process, record-keeping and the management thereof.Views of Responsible Officials: Management agrees with the finding.
2020-005 EligibilitySignificant Deficiency in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationChild Nutrition Cluster CFDA #10.553, #10.555, #10.559; 07-86-11-000; July 1, 2019 to June 30, 2020Condition: Eide Bailly LLP (EB) noted no documentation of the review for the number of automatically verifiedstudents submitted to the funder was retained.Management?s Response and Corrective Action Plan:The Operations Manager will have the Controller will review the documentation of the automatically verifiedstudents prior to submission upload to the CNP Direct Certification area of the Arizona Department of Educationwebsite.The Operations Manager and the Controller will review the current policies and procedures for the eligibilityprocess, record-keeping, management review, and documentation retention for the child nutrition program.During the review, the Operations Manager and Controller will discuss ways to strengthen our current internalcontrol. Management will, on an annual basis, review and consider any needed modifications to orimplementation of new policies and procedures that would strengthen internal controls surrounding theeligibility process, record-keeping, and the management thereof.Contact Person: Stacey Bittner, ControllerAnticipated Completion Date: April 15, 2021
Eide Bailly LLP (EB) noted that four out of four cash requests did not have documentation supportingthe review of the request.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to significantturnover in the Organization.Effect: Draw requests could be incorrect.Questioned Costs: None reported.Context/Sampling: A nonstatistical sample of four cash requests out of 14 total cash requests were selected fortesting.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsto or implementation of policies and procedures that would strengthen internal controls surrounding theapproval and submission process of cash request forms.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2020-006 Cash ManagementMaterial Weakness in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2019 to June 30, 2020Criteria: For non-Federal entities other than states, payment methods must minimize the time elapsing betweenthe transfer of funds from the pass-through entity and the disbursement by the non-Federal entity whether thepayment is made by electronic funds transfer, or issuance of redemption of checks, warrants, or payment byother means. Per review of the draw requests for the programs and the Organization?s internal controlprocesses, all draw requests require approval by someone authorized to sign the cash requests and that thedraw requests should be adequately supported.Condition: Eide Bailly LLP (EB) noted that four out of four cash requests did not have documentation supportingthe review of the request.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to significantturnover in the Organization.Effect: Draw requests could be incorrect.Questioned Costs: None reported.Context/Sampling: A nonstatistical sample of four cash requests out of 14 total cash requests were selected fortesting.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsto or implementation of policies and procedures that would strengthen internal controls surrounding theapproval and submission process of cash request forms.Views of Responsible Officials: Management agrees with the finding.
2020-006 Cash ManagementMaterial Weakness in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2019 to June 30, 2020Condition: Eide Bailly LLP (EB) noted that four out of four cash requests did not have documentation supportingthe review of the request.Management?s Response and Corrective Action Plan:Draw request calculations are approved monthly through a multi-level approver process in the ADE Grant systemand meet budget criteria. Due to a limited staff the reviews were not noted on the calculation spreadsheetsbefore funding was requested. The following process has been put in place to add another layer of approval priorto the request being made in the Grant system.1. One layer of additional staff was added to the process in March 2020 to prepare the funding request. Asupervisor then reviews the calculation.2. A process was set up in September to have the reviewer note on the calculation sheet review andapproval date of the calculation.3. After this review and documentation process the draw is requested and follows the same multi-levelapprover processes in the ADE Grant system.Contact Person: Stacey Bittner, ControllerAnticipated Completion Date: October 31, 2020
It was found that the matching calculation showed no evidence of review.Cause: The Organization does not have a formal system in place to ensure that the matching calculation andrequirements are reviewed.Effect: The Organization did not review their matching requirement. The matching requirement is not monitoredfor noncompliance.Questioned Costs: None reported.Context/Sampling: All of the costs subject to the matching requirement were subject to testing.Repeat Finding from Prior Year: Yes, prior year finding 2019-006.Recommendation: We recommend that management continually review and consider modifications that wouldstrengthen the internal controls surrounding the matching process.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2020-007 MatchingMaterial Weakness in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2019 to June 30, 2020Criteria: For the Adult Education programs, in accordance with provisions of the funding agreement, theOrganization is required to provide a minimum 25% local match for the grant award in cash or in-kindcontribution. Federal funds and earned income may not be used for matching.Condition: It was found that the matching calculation showed no evidence of review.Cause: The Organization does not have a formal system in place to ensure that the matching calculation andrequirements are reviewed.Effect: The Organization did not review their matching requirement. The matching requirement is not monitoredfor noncompliance.Questioned Costs: None reported.Context/Sampling: All of the costs subject to the matching requirement were subject to testing.Repeat Finding from Prior Year: Yes, prior year finding 2019-006.Recommendation: We recommend that management continually review and consider modifications that wouldstrengthen the internal controls surrounding the matching process.Views of Responsible Officials: Management agrees with the finding.
2020-007 MatchingMaterial Weakness in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2019 to June 30, 2020Criteria: For the Adult Education programs, in accordance with provisions of the funding agreement, theOrganization is required to provide a minimum 25% local match for the grant award in cash or in-kindcontribution. Federal funds and earned income may not be used for matching.Condition: It was found that the matching calculation showed no evidence of review.Management?s Response and Corrective Action Plan:Due to limited staffing, there were no resources available to implement a dual approval system. The processgoing forward is as follows:1. Program director prepares documents for grant awards and potential matching funds.2. The program director meets with the Controller to determine the appropriate matching amount and toensure the funds are used appropriately.3. The accounting consultants will do a final review of the request prior to submission.4. Once documented and reviewed the form is submitted.Starting March 1, 2021, the program director will meet with the Controller and Community Relations Specialist todetermine the appropriate matching amount and to ensure the funds are used appropriately.Contact Person: Stacey Bittner, ControllerAnticipated Completion Date: March 1, 2021
2019-006
FAC accepted this audit on April 8, 2020 — management decision was due October 8, 2020.
Eide Bailly LLP (EB) noted the following internal control issues.? Reintegration of Ex-Offenderso Four out of 60 expenditures tested did not have support for amounts charged to the programthat agreed to the hours recorded by program employees.? Adult Education Basic Grants to Stateso 15 out of 60 expenditures tested did not have support for amounts charged to the program thatagreed to the hours recorded by program employees.Questioned Costs: Employees? time charged to the program was overstated compared to actual time worked onthe program by $69,379 for CFDA #17.270 and by $40,688 for CFDA #84.002A.Context/Sampling: For CFDA #17.270, a nonstatistical sample of 60 transactions out of 1,188 total transactionswere selected for testing, which accounted for $49,735 of $440,549 total federal program expenditures. ForCFDA #84.002A, a nonstatistical sample of 60 transactions out of 2,957 total transactions were selected fortesting, which accounted for $30,706 of $631,398 total federal program expenditures.Cause: Based on discussions with personnel, discrepancies in supporting documentation occurred due to errorsin the payroll system.Effect: Improper expenses were paid and charged to the federal program or charged at the wrong amount.Repeat Finding from Prior Year: Yes, prior year finding 2018-001.Recommendation: We recommend the Organization?s management implement a process that allows for actualhours for time spent to be billed to the program and ensure that supporting documents are retained.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2019-002 Allowable Costs, Activities Allowed (All Major Programs)Material NoncomplianceAllowable Costs, Activities Allowed (All Major Programs)Material Weakness in Internal Control over ComplianceU.S. Department of LaborReintegration of Ex-Offenders CFDA #17.270; YF-29241-16-60-A-4, YF-32165-18-60-A-4; July 1, 2018 to October31, 2021U.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2018 to June 30, 2019Criteria: A good system of internal controls requires all expenditures be properly approved and supported byappropriate documentation. In addition, all expenditures charged to the federal programs are required to beallowable costs under the program and allocated in accordance with the Organization?s cost allocation plan.Condition: Eide Bailly LLP (EB) noted the following internal control issues.? Reintegration of Ex-Offenderso Four out of 60 expenditures tested did not have support for amounts charged to the programthat agreed to the hours recorded by program employees.? Adult Education Basic Grants to Stateso 15 out of 60 expenditures tested did not have support for amounts charged to the program thatagreed to the hours recorded by program employees.Questioned Costs: Employees? time charged to the program was overstated compared to actual time worked onthe program by $69,379 for CFDA #17.270 and by $40,688 for CFDA #84.002A.Context/Sampling: For CFDA #17.270, a nonstatistical sample of 60 transactions out of 1,188 total transactionswere selected for testing, which accounted for $49,735 of $440,549 total federal program expenditures. ForCFDA #84.002A, a nonstatistical sample of 60 transactions out of 2,957 total transactions were selected fortesting, which accounted for $30,706 of $631,398 total federal program expenditures.Cause: Based on discussions with personnel, discrepancies in supporting documentation occurred due to errorsin the payroll system.Effect: Improper expenses were paid and charged to the federal program or charged at the wrong amount.Repeat Finding from Prior Year: Yes, prior year finding 2018-001.Recommendation: We recommend the Organization?s management implement a process that allows for actualhours for time spent to be billed to the program and ensure that supporting documents are retained.Views of Responsible Officials: Management agrees with the finding.
2019-002 Allowable Costs, Activities Allowed (All Major Programs)Material NoncomplianceAllowable Costs, Activities Allowed (All Major Programs)Material Weakness in Internal Control over ComplianceU.S. Department of LaborReintegration of Ex-Offenders CFDA #17.270; YF-29241-16-60-A-4, YF-32165-18-60-A-4; July 1, 2018 toOctober 31, 2021U.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2018 to June 30, 2019Condition: Eide Bailly LLP (EB) noted the following internal control issues:? Reintegration of Ex-Offenders? Four out of 60 expenditures tested did not have support for amounts charged to theprogram that agreed with the hours recorded by program employees.? Adult Education Basic Grants to States? 15 out of 60 expenditures tested did not have support for amounts charged to theprogram that agreed with the hours recorded by program employees.Management's Response and Corrective Action Plan:Previous management in charge of these grants did not have a clear understanding of recording timeand effort in accordance with federal guidelines. Friendly House made significant personnel changes inthe management of these programs to ensure proper use of funds going forward. New management isin place as of 11/1/2019.1. Our consultants have met and educated Program Directors on appropriate methods to recordtime worked and has submitted forms to each area to complete for job related responsibilitiesand allocations.2. Accounting and HR met to identify issues with this information flowing through the PR systemand the system was changed so that staff could accurately record their time. Supervisors wereadvised of the importance of timecard review.3. In January, a review of timecard to labor distribution hours was performed to see how theprocess was working and results were discussed with individual cost centers to improve anyneeded processes in their areas. During the review, corrections were noted and updated in thesystem. Accounting ran new reports and updated any journal entries so that the financialswould be accurate for fiscal year ending June 30, 2020.4. Starting in January a comparison report between timecard hours and labor distribution hoursand labor distribution dollars to general ledger dollars by cost center are reviewed andreconciled.Contact Person: Jerry Mendoza, President/CEOAnticipated Completion Date: 1/31/2020
2018-001
Eide Bailly LLP (EB) noted the following internal control issues.? Reintegration of Ex-Offenderso Three out of 60 expenditures tested lacked evidence of review in accordance with theOrganization?s control policies.o One out of 60 expenditures was charged to the program for less than the allowed amount.o Indirect costs were billed at differing rates.? Adult Education Basic Grants to Stateso Four out of 60 expenditures tested lacked evidence of review in accordance with theOrganization?s control policies.o One out of 60 expenditures was charged to the program for less than the allowed amount.Questioned Costs: None reported.Context/Sampling: For CFDA #17.270, a nonstatistical sample of 60 transactions out of 1,188 total transactionswere selected for testing, which accounted for $49,735 of $440,549 total federal program expenditures. ForCFDA #84.002A, a nonstatistical sample of 60 transactions out of 2,957 total transactions were selected fortesting, which accounted for $30,706 of $631,398 total federal program expenditures.Cause: Based on discussions with personnel, the above occurred due to significant turnover in the Organization.Effect: Improper expenses may be paid and charged to the federal program or charged at the wrong amount.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsthat would strengthen the internal controls surrounding allowable costs and activities allowed.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2019-003 Allowable Costs, Activities Allowed (All Major Programs)Material Weakness in Internal Control over ComplianceU.S. Department of LaborReintegration of Ex-Offenders CFDA #17.270; YF-29241-16-60-A-4, YF-32165-18-60-A-4; July 1, 2018 to October31, 2021U.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2018 to June 30, 2019Criteria: A good system of internal controls requires all expenditures be properly approved and supported byappropriate documentation. In addition, all expenditures charged to the federal programs are required to beallowable costs under the program and allocated in accordance with the Organization?s cost allocation plan.Condition: Eide Bailly LLP (EB) noted the following internal control issues.? Reintegration of Ex-Offenderso Three out of 60 expenditures tested lacked evidence of review in accordance with theOrganization?s control policies.o One out of 60 expenditures was charged to the program for less than the allowed amount.o Indirect costs were billed at differing rates.? Adult Education Basic Grants to Stateso Four out of 60 expenditures tested lacked evidence of review in accordance with theOrganization?s control policies.o One out of 60 expenditures was charged to the program for less than the allowed amount.Questioned Costs: None reported.Context/Sampling: For CFDA #17.270, a nonstatistical sample of 60 transactions out of 1,188 total transactionswere selected for testing, which accounted for $49,735 of $440,549 total federal program expenditures. ForCFDA #84.002A, a nonstatistical sample of 60 transactions out of 2,957 total transactions were selected fortesting, which accounted for $30,706 of $631,398 total federal program expenditures.Cause: Based on discussions with personnel, the above occurred due to significant turnover in the Organization.Effect: Improper expenses may be paid and charged to the federal program or charged at the wrong amount.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsthat would strengthen the internal controls surrounding allowable costs and activities allowed.Views of Responsible Officials: Management agrees with the finding.
2019-003 Allowable Costs, Activities Allowed (All Major Programs)Material Weakness in Internal Control over ComplianceU.S. Department of LaborReintegration of Ex-Offenders CFDA #17.270; VF-29241-16-60-A-4, VF-32165-18-60-A-4; July 1, 2018 toOctober 31, 2021U.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2018 to June 30, 2019Condition: Eide Bailly LLP (EB) noted the following internal control issues.? Reintegration of Ex-Offenders? Three out of 60 expenditures tested lacked evidence of review in accordance with theOrganization's control policies.? One out of 60 expenditures were charged to the program for less than the allowedamount.? Indirect costs were billed at differing rates.? Adult Education Basic Grants to States? Four out of 60 expenditures tested lacked evidence of review in accordance with theOrganization's control policies.? One out of 60 expenditures were charged to the program for less than the allowedamount.Management's Response and Corrective Action Plan :These issues came to management's attention in May 2019. However, at that point there was noopportunity to go back and correct the issues. The indirect cost rates were in question early in the yearand staff used different rates because they received conflicting information from grantors.Our consultants worked with each grantor to clarify indirect rates by program. At the end of fiscal yearJune 30, 2019, the YTD totals were adjusted to the approved rate by program.Corrective actions taken to ensure the fidelity and accuracy of information on a prospective basisinclude:1. Invoice coding and training has occurred with Arizona Department of Education (ADE) andDepartment of Labor (DOL) staff to ensure that proper account codes are present, approvalsignature are present, and the proper documentation is attached. All July-December DOLinvoices were reviewed before the funding requests were made in February. In addition, theconsultants reviewed expenditures in detail as cost reimbursement requests are made to ADE.Proper audit trail documentation has been retained for audit purposes.2. The CEO is approving invoices before payment and before positive pay file is submitted to thebank.3. Indirect cost rates are being applied by month to each program according to the approvedprogram indirect rate.Contact Person: Jerry Mendoza, President/CEOAnticipated Completion Date: 2/15/2020
Eide Bailly LLP (EB) noted that seven out of eight cash requests did not have supportingdocumentation that agreed to the draw requests at the time of the draw. However, at the end of the programyear, we noted there were no overdraws of program funds in total.Questioned Costs: None reported.Context/Sampling: A nonstatistical sample of eight cash requests out of 56 total cash requests were selected fortesting.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to significantturnover in the Organization.Effect: Draw requests could be incorrect.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsto or implementation of policies and procedures that would strengthen internal controls surrounding theapproval and submission process of cash request forms.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2019-004 Cash ManagementMaterial Weakness in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2018 to June 30, 2019Criteria: For non-Federal entities other than states, payment methods must minimize the time elapsing betweenthe transfer of funds from the pass-through entity and the disbursement by the non-Federal entity whether thepayment is made by electronic funds transfer, or issuance of redemption of checks, warrants, or payment byother means. Per review of the draw requests for the programs and the Organization?s internal controlprocesses, all draw requests require approval by someone authorized to sign the cash requests and that thedraw requests should be adequately supported.Condition: Eide Bailly LLP (EB) noted that seven out of eight cash requests did not have supportingdocumentation that agreed to the draw requests at the time of the draw. However, at the end of the programyear, we noted there were no overdraws of program funds in total.Questioned Costs: None reported.Context/Sampling: A nonstatistical sample of eight cash requests out of 56 total cash requests were selected fortesting.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to significantturnover in the Organization.Effect: Draw requests could be incorrect.Repeat Finding from Prior Year: No.Recommendation: We recommend the Organization?s management routinely review and consider modificationsto or implementation of policies and procedures that would strengthen internal controls surrounding theapproval and submission process of cash request forms.Views of Responsible Officials: Management agrees with the finding.
2019-004 Cash ManagementMaterial Weakness in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2018 to June 30, 2019Condition: Eide Bailly LLP (EB) noted that seven out of eight cash requests did not have supportingdocumentation that agreed to the draw requests at the time of the draw. However, at the end of theprogram year, we noted there were no overdraws of program funds in total.Management's Response and Corrective Action Plan:The Organization became aware of this issue in May 2019. Since then, with the help of our consultants,the Organization has implemented the following corrective actions:1. Our consultants developed a COA (Chart of Accounts) map to systematically convert FriendlyHouse COA to ADE object and function codes. In cooperation with the ADE, our consultantsdeveloped reports that comply with the ADE specifications and requirements.2. These reports are prepared and reviewed for accuracy before any funds are requested.3. Necessary budget modifications are entered into the Grant Management System to ensurecompliance.4. Funds are requested and a multi-level approval process is used.5. Copies of all supporting documentation related to these requests as well as subsequent bankdeposit detail is kept on file to support the funding.6. Beginning in December 2019, funding requests were submitted for the July 1- December 31,2019 grant period. Going forward, monthly or bi-monthly reimbursement requests will occurfor all ADE grants.Contact Person: Jerry Mendoza, President/CEOAnticipated Completion Date: 12/31/2019
Eide Bailly LLP (EB) noted that two out of 12 files tested were missing approval by the case manageron the enrollment application.Questioned Costs: None reported.Context/Sampling: A nonstatistical sample of 12 participants out of 74 total participants were selected foreligibility testing.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to the Organizationnot following their control procedures.Effect: Ineligible individuals may receive service under the federal program without adequate documentation orapproval.Repeat Finding from Prior Year: Yes, prior year finding 2018-002.Recommendation: We recommend the Organization?s management routinely review and consider modificationsto or implementation of policies and procedures that would strengthen internal controls surrounding theeligibility process, record-keeping and the management thereof.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2019-005 EligibilityMaterial Weakness in Internal Control over ComplianceU.S. Department of LaborReintegration of Ex-Offenders CFDA #17.270; YF-29241-16-60-A-4, YF-32165-18-60-A-4; July 1, 2018 to October31, 2021Criteria: In order to be eligible for the program, the participants must meet certain age and other requirements.Part of the Organization?s documentation to determine eligibility includes a component that the programdirector approves all participants? eligibility determinations.Condition: Eide Bailly LLP (EB) noted that two out of 12 files tested were missing approval by the case manageron the enrollment application.Questioned Costs: None reported.Context/Sampling: A nonstatistical sample of 12 participants out of 74 total participants were selected foreligibility testing.Cause: Based on discussions with personnel, lack of supporting documentation occurred due to the Organizationnot following their control procedures.Effect: Ineligible individuals may receive service under the federal program without adequate documentation orapproval.Repeat Finding from Prior Year: Yes, prior year finding 2018-002.Recommendation: We recommend the Organization?s management routinely review and consider modificationsto or implementation of policies and procedures that would strengthen internal controls surrounding theeligibility process, record-keeping and the management thereof.Views of Responsible Officials: Management agrees with the finding.
2019-005 EligibilityMaterial Weakness in Internal Control over ComplianceU.S. Department of LaborReintegration of Ex-Offenders CFDA #17.270; YF-29241-16-60-A-4, YF-32165-18-60-A-4; July 1, 2018 toOctober 31, 2021Condition: Eide Bailly LLP (EB) noted that two out of 12 files tested were missing approval by the casemanager on the enrollment application.Management's Response and Corrective Action Plan : Updated policies and procedures are currentlybeing successfully applied on other DOL grants. These same policies and procedures will beimplemented on all existing and future DOL awards. These policies and procedures help to ensure thefidelity of the eligibility process, record-keeping and the management thereof. These changes have hadpositive control outcomes and include procedures such as spot checks for proper documentation andsignatures by assigned staff members. The file checks will happen on a biweekly basis and will be arandom overview of 10% of the total case files.Contact Person: Mariana Torres, Program Manager and Jose Vaquera, VP of Client ServicesAnticipated Completion Date: 11/1/2019
2018-002
It was found that the matching calculation showed no evidence of review.Questioned Costs: None reported.Context/Sampling: All of the costs subject to the matching requirement were subject to testing.Cause: The Organization does not have a formal system in place to ensure that the matching calculation andrequirements are reviewed.Effect: The Organization did not review their matching requirement. The matching requirement is not monitoredfor noncompliance.Repeat Finding from Prior Year: Yes, prior year finding 2018-003.Recommendation: We recommend that management continually review and consider modifications that wouldstrengthen the internal controls surrounding the matching process.Views of Responsible Officials: Management agrees with the finding.
Show full finding ▾Hide full finding ▴2019-006 MatchingMaterial Weakness in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2018 to June 30, 2019Criteria: For the Adult Education programs, in accordance with provisions of the funding agreement, theOrganization is required to provide a minimum 25% local match for the grant award in cash or in-kindcontribution. Federal funds and earned income may not be used for matching.Condition: It was found that the matching calculation showed no evidence of review.Questioned Costs: None reported.Context/Sampling: All of the costs subject to the matching requirement were subject to testing.Cause: The Organization does not have a formal system in place to ensure that the matching calculation andrequirements are reviewed.Effect: The Organization did not review their matching requirement. The matching requirement is not monitoredfor noncompliance.Repeat Finding from Prior Year: Yes, prior year finding 2018-003.Recommendation: We recommend that management continually review and consider modifications that wouldstrengthen the internal controls surrounding the matching process.Views of Responsible Officials: Management agrees with the finding.
2019-006 MatchingMaterial Weakness in Internal Control over ComplianceU.S. Department of EducationPassed-through the Arizona Department of EducationAdult Education Basic Grants to States CFDA #84.002A; Various Grants; July 1, 2018 to June 30, 2019Condition: It was found that the matching calculation showed no evidence of review.Management's Response and Corrective Action Plan :Friendly House's required matching documents are created by the LEA Business Manager & reviewed byVP of Client Services before being submitted to ADE through the online GME system. The documents arethen reviewed and approved by two levels of ADE personnel. Email and/or physical signaturedocumentation of the VP of Client Services review is saved electronically in Friendly House's shared filestructure along with documentation of the value of in-kind donations being used.Contact Person: Jerry Mendoza, President/CEOAnticipated Completion Date: 12/31/2019
2018-003
FAC accepted this audit on March 27, 2019 — management decision was due September 27, 2019.
GSA_MIGRATION
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2017-001
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2017-002
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GSA_MIGRATION
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GSA_MIGRATION
Show full finding ▾Hide full finding ▴FAC accepted this audit on December 11, 2017 — management decision was due June 11, 2018.
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GSA_MIGRATION
2016-001
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2016-002
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2016-003
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GSA_MIGRATION
FAC accepted this audit on March 18, 2017 — management decision was due September 18, 2017.
GSA_MIGRATION
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2015-001
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