VILLA OF HOPE

FINDING 2023-002 - Block Grants for Prevention and Treatment of Substance Abuse - Assistance Listing No. 93.959; Grant Period - For the year ended June 30, 2023 Condition: The internal controls over the expense approval process were not operating as designed. As a result, we were unable to review approval on specific expenses for a selection of transactions claimed as part of the Block Grants for Prevention and Treatment of Substance Abuse. Criteria: The Organization's policy is to have dual signature approval from the purchaser and a supervisor of the appropriate level for all expenses with the exception of certain recurring expenses. Proper functioning internal controls would result in the Organization having consistent control procedures in place for expense approval. Cause: The system of controls over the Block Grants for Prevention and Treatment of Substance Abuse did not operate properly to allow for the Organization to provide evidence of specific expense approval or documentation to confirm the expense was considered recurring for 18 of 40 items selected for testing as part of the allowable cost testwork performed. Effect: While overall vendor contracts were provided, the Organization was unable to provide documentation to verify that the specific expense transactions were approved in accordance with the purchasing policy. Recommendation: The Organization's internal control system over the invoice approval process should be re-evaluated, all recurring expenses should be documented and all employees involved should be trained on the process. Views of Responsible Officials and Planned Corrective Actions: The Organization has reviewed its invoice approval process, and has notified staff of the requirement to approve and code invoices for payment. The Accounts Payable Specialist is monitoring compliance, and forwarding invoices for approval where necessary. Invoices pertaining to recurring expenses are approved either via the credit card expense report or invoice approval processes.

FINDING 2023-003 - Block Grants for Prevention and Treatment of Substance Abuse - Assistance Listing No. 93.959; Grant Period - For the year ended June 30, 2023 Condition: The Organization does not have a formal system of approval over the payroll process when exceptions to the standard payroll transactions occur. In addition the Organization does not have consistent procedures in place to require employees to report additional payroll occurrences outside of the normal hourly commitment on the weekly timecards. Criteria: The Organization has multiple instances of additional payments to employees above and beyond the standard hourly or salary commitment. In addition, the Organization requires all non-exempt employees to enter hours worked into the timecard entry system. A formal payroll approval process would provide verification that these exceptions to the employee's payroll is documented and approved. In addition, complete timecard entry for all hours worked would provide documentation of authorization to the specific employee for additional payments. Cause: The system of controls over the payroll process did not operate properly to allow for the Organization to provide timecards and/or authorization of extra payroll payments in addition to approved hourly or salary rates for 19 of 267 items selected for testing as part of the payroll testwork performed. Effect: The Organization's did not have the controls in place to provide verification of payroll exceptions for various employees. Recommendation: The Organization's internal control system over the payroll process should be modified to include formal approval of any payroll payments outside of the standard hourly or salary commitment. The Organization should modify the internal control system over payroll to require all hours worked by non-exempt employees to be entered into the time card entry system. All employees should be adequately trained on these internal control procedures over the payroll process. Views of Responsible Officials and Planned Corrective Actions: The Organization has established procedures to require formal approval of any payroll payments outside of the standard hourly or salary commitments. Documentation to support such payments shall be retained with the bi-weekly payroll files. All hours worked by non-exempt employees shall be entered into the time card entry system and approved by the employee’s supervisor.

FINDING 2023-004 - Block Grants for Prevention and Treatment of Substance Abuse - Assistance Listing No. 93.959; Grant Period - For the year ended June 30, 2023 Condition: The internal controls over the check signing process were not operating as designed. As a result, we were unable to review dual signature on certain checks written over $10,000 claimed as part of the Block Grants for Prevention and Treatment of Substance Abuse. Criteria: The Organization's policy is to have dual signatures on any checks written over $10,000. Proper functioning internal controls would result in the Organization having dual signatures on all required checks. Cause: Of the 40 expenses selected for testing, 4 of the payments selected required dual signature based on the Organization's policy. The system of controls over the Block Grants for Prevention and Treatment of Substance Abuse did not operate properly to allow for the Organization to provide for the required dual signature on 2 of 4 items requiring dual signature that were selected for testing as part of the allowable cost testwork performed. Effect: The Organization did not obtain proper dual signature on certain checks over $10,000. Recommendation: The Organization's internal control system over the check signing process should be consistently followed for all checks that apply. Views of Responsible Officials and Planned Corrective Actions: The Organization has established a list of authorized signers for checks drawn on its bank accounts. Checks shall be reviewed prior to mailing to ensure dual signatures are present on checks over $10,000.

2022-001 - Emergency Rental Assistance Program Condition: Three rental assistance payments out of a sample of forty did not agree with the Rental Assistance Agreements for the recipient in the SimpliGov Platform. Two of the recipients had an additional month paid. The other has a minor ($10) difference). In discussion with the County, they indicated that if a Rental Assistance Agreement modification is necessary, it must be amended by the Organization to include the changes. In all three of these instances, the amounts paid by the Organization were approved by County personnel overseeing the program. Criteria: The Organization should have procedures in place to ensure all required documentation is maintained for all Federal funds expended. Cause: The cause of the missing documentation has not been determined. Effect: Rental Assistance payments did not have all required documentation to support federal dollars expended. Recommendation: We recommend the Organization review its current procedures over expending federal funds to ensure that all required documentation required to support federal expenditures is retained for periods required by the program. We also recommend a post program review be implemented specifically to review program documentation at the conclusion of the program. We recommend any changes be strictly followed going forward and that all parties involved in federal programs be trained on the documentation requirements of the program. This review should be systematic and fully documented in order to substantiate the steps taken. Views of Responsible Officials and Planned Corrective Actions: We are in agreement with the finding. We will review our current procedures to ensure all documentation related to the support of federal funds is maintained in the appropriate file.