THE SALVATION ARMY, SYRACUSE AREA SERVICES

Statement of Condition: The reporting package and data collection form for the year ended September 30, 2023, was not filed by the deadline of June 30, 2024, to the Federal Audit Clearinghouse. Criteria: In accordance with 2 CFR Section 200.512(a), 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, adjusted for any extensions permitted by the Office of Management and Budget. Effect of Condition: The reporting package and data collection form for the year ended September 30, 2023, was not accessible on the Federal Audit Clearinghouse in a timely manner. Cause of Condition: The portion of the Single Audit Reporting Package relating to the grant award testing and Schedule of Expenditures of Federal Awards (SEFA), and preparation and submission of the Data Collection Form was not completed in sufficient time due to turnover in the organization’s finance department which caused delays in completing the audit and testing of the SEFA. Further, some additional grant testing procedures were required to be performed by the audit team that occurred after the required due date. Recommendation: We recommend the organization work closely with the audit firm to ensure that the single audit reporting package is issued by the deadline or within a federally approved extended date along with submitting the required data collection form with the Federal Audit Clearinghouse. Views of Responsible Officials: The organization agrees with the finding. Please refer to corrective action plan on page 48.

Statement of Condition: The organization prepared the schedule of expenditures of federal awards (SEFA) for fiscal year ended 2023. Based on our review of the SEFA, we noted that certain pass-through contract numbers were not accurate on the schedule of federal expenditures of federal awards. We also noted that certain Assistance Listing Numbers (ALN) were not correct and/or identified as federal funds, instead of county and state funds. Criteria: The Uniform Guidance requires the auditee to prepare a SEFA for the period covered by the auditee's financial statements that includes certain required elements, including total federal awards expended for each individual federal program. The Uniform Guidance requires the auditor to determine whether the auditee's SEFA is fairly stated, in all material respects, in relation to the audited entity's financial statements as a whole. In addition, the Uniform Guidance places the responsibility for identifying major programs on the auditor, and the SEFA serves as the primary basis for the auditor's major program determination. Therefore, appropriate major program determination by the auditor is dependent on the accuracy and completeness of the information in SEFA. Effect of Condition: The Uniform Guidance requires the auditor to determine whether the auditee's SEFA is fairly stated, in all material respects, in relation to the audited entity's financial statements as a whole. Due to incorrect classification of federal and state funded contracts, the SEFA may not be accurate and complete. Cause of Condition: The organization had turnover in the person preparing the SEFA and did not have someone independently review the SEFA to identify proper ALN’s and state funding included in the grant documents. Recommendation: We recommend that the organization provide proper training in compiling and preparing the SEFA which includes identifying the correct ALN’s and pass-through contract numbers, and identifying those contracts that are state funded.

Statement of Condition: The Single Audit reporting package and data collection form for the year ended September 30, 2022, was not filed by the deadline of June 30, 2023, to the Federal Audit Clearinghouse. Criteria: In accordance with 2 CFR Section 200.512(a), 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, adjusted for any extensions permitted by the Office of Management and Budget. Effect of Condition: The reporting package and data collection form for the year ended September 30, 2022, was not accessible on the Federal Audit Clearinghouse in a timely manner. Cause of Condition: The portion of the Single Audit Reporting Package relating to the grant award testing and Schedule of Expenditures of Federal Awards (SEFA), and preparation and submission of the Data Collection Form was not completed in sufficient time due to turnover in the organization’s finance department which caused delays in completing the audit and testing of the SEFA. Further, some additional grant testing procedures were required to be performed by the audit team that occurred after the required due date. Recommendation: We recommend the organization work closely with the audit firm to ensure that the single audit reporting package is issued by the deadline or within a federally approved extended date along with submitting the required data collection form with the Federal Audit Clearinghouse. Views of Responsible Officials: The organization agrees with the finding. Please refer to corrective action plan on page 46.

Statement of Condition: The organization prepared the schedule of expenditures of federal awards (SEFA) for fiscal year ended 2022. Based on our review of the SEFA, we noted that certain pass-through contract numbers were not accurate on the SEFA. We also noted that certain Assistance Listing Numbers (ALN) were not correct and/or identified as federal funds, instead of county and state funds. Criteria: The Uniform Guidance requires the auditee to prepare a SEFA for the period covered by the auditee's financial statements that includes certain required elements, including total federal awards expended for each individual federal program. The Uniform Guidance requires the auditor to determine whether the auditee's SEFA is fairly stated, in all material respects, in relation to the audited entity's financial statements as a whole. In addition, the Uniform Guidance places the responsibility for identifying major programs on the auditor, and the SEFA serves as the primary basis for the auditor's major program determination. Therefore, appropriate major program determination by the auditor is dependent on the accuracy and completeness of the information in SEFA. Effect of Condition: The Uniform Guidance requires the auditor to determine whether the auditee's SEFA is fairly stated, in all material respects, in relation to the audited entity's financial statements as a whole. Due to incorrect classification of federal and state funded contracts, the SEFA may not be accurate and complete. Cause of Condition: The organization had turnover in the person preparing the SEFA and did not have someone independently review the SEFA to identify proper ALN’s and state funding included in the grant documents. Recommendation: We recommend that the organization provide proper training in compiling and preparing the SEFA which includes identifying the correct ALN’s and pass-through contract numbers, and identifying those contracts that are state funded.

Statement of Condition: The organization prepared the schedule of expenditures of federal awards (SEFA) for fiscal year ended 2021. Based on our review of the schedule of expenditures of federal awards, we noted that certain pass-through contract numbers were not accurate on the SEFA. We also noted that certain Assistance Listing Numbers (ALN) were not correct and/or identified as federal funds, instead of county and state funds. Criteria: The Uniform Guidance requires the auditee to prepare a SEFA for the period covered by the auditee's financial statements that includes certain required elements, including total federal awards expended for each individual federal program. The Uniform Guidance requires the auditor to determine whether the auditee's SEFA is fairly stated, in all material respects, in relation to the audited entity's financial statements as a whole. In addition, the Uniform Guidance places the responsibility for identifying major programs on the auditor, and the SEFA serves as the primary basis for the auditor's major program determination. Therefore, appropriate major program determination by the auditor is dependent on the accuracy and completeness of the information in the SEFA. Effect of Condition: The Uniform Guidance requires the auditor to determine whether the auditee's SEFA is fairly stated, in all material respects, in relation to the audited entity's financial statements as a whole. Due to incorrect classification of federal and state funded contracts, the SEFA may not be accurate and complete. Cause of Condition: The organization had turnover in the person preparing the SEFA and did not have someone independently review the SEFA to identify proper ALN’s and state funding included in the grant documents. Recommendation: We recommend that the organization provide proper training in compiling and preparing the SEFA which includes identifying the correct ALN’s and pass-through contract numbers, and identifying those contracts that are state funded. Views of Responsible Officials: The organization agrees with this finding. Refer to corrective action plan on page 43.

Statement of Condition: The Single Audit reporting package and data collection form for the year ended September 30, 2021, was not filed by the deadline of June 30, 2022, to the Federal Audit Clearinghouse. Criteria: In accordance with 2 CFR Section 200.512(a), 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, adjusted for any extensions permitted by the Office of Management and Budget. Effect of Condition: The Single Audit reporting package and data collection form for the year ended September 30, 2021, was not accessible on the Federal Audit Clearinghouse in a timely manner. Cause of Condition: The portion of the Single Audit Reporting Package relating to the grant award testing and the schedule of expenditures of federal awards (SEFA), and preparation and submission of the Data Collection Form was not completed in sufficient time due to turnover in the organization’s finance department as well as COVID-related issues which caused delays in completing the audit and testing of the SEFA. Further, some additional grant testing procedures were required to be performed by the audit team that occurred after the required or extended due date. Recommendation: We recommend the organization work closely with the audit firm to ensure that the single audit reporting package is issued by the deadline or within a federally approved extended date along with submitting the required data collection form with the Federal Audit Clearinghouse. Views of Responsible Officials: The organization agrees with the finding. Please refer to corrective action plan on page 44.

Finding No. 2020-001: Material Weakness-Books and Records Reconciliation a. Statement of Condition: During 2020, the books and records of the Organization required significant adjustments to certain balance sheet accounts, including several affecting certain prior year financial statements balances which resulted in delays in issuing the financial statements. Further, certain of these financial statement balances are only recorded at the end of the fiscal year and they were not reviewed to insure that they were accurately stated. b. Criteria: Reconciliations of general ledger accounts need to be performed on a regular basis in order to insure the quality of the books and records of an organization and timely financial reporting. Further, reconciliations need to be prepared by someone independent of the preparer. c. Effect of Condition: The books and records of the Organization for the current year and prior year required significant adjustments in order to be fairly stated. d. Cause of Condition: Lack of review and completion of reconciliations of certain accounts resulted, which also contributed to significant delays in the completion of the audit. e. Recommendation: Improvements, including timely reconciliations of accounts balances and financial reporting, should be made to the reconciliation process. Further, certain transactions that occur within the capital asset funds should be reviewed and reconciled throughout the year. f. Views of Responsible Officials: The organization agrees with the finding. Please refer to corrective action plan on page 40.

Finding No. 2020-002: Significant Deficiency-Financial Statement Closing Process a. Statement of Condition: The general ledger did not contain all of the audit adjustments from the prior year and certain general ledger journal entries were posted out of period by Salvation Army Territorial Headquarters personnel without the Director of Finance knowledge. The Director of Finance did not detect this prior to the financial statement closing process. b. Criteria: General ledger and the financial statements should be properly reconciled to the external financial statements and general ledger entries should be properly reviewed and approved. c. Effect of Condition: Internal financial statements and year-end financial statements did not accurately reflect the financial position of the Organization. d. Cause of Condition: Reconciliation and review of certain general ledger accounts was not performed prior to the closing of the books. Further, the closing process of the financial records did not allow for audit adjustments to be recorded in the proper period. e. Recommendation: We recommend that the Organization review its procedures relating to the financial statement close process to insure that opening net assets and any audit entries recorded are properly reflected in the general ledger in the post-closing period. Further, monthly procedures should be established that require that any general ledger entries recorded by Territorial Headquarters personnel are tagged and reviewed by the Organization?s finance personnel to insure that they are accurate, properly recorded, approved and documented within the Organization supporting records. f. Views of Responsible Officials: The organization agrees with the finding. Please refer to corrective action plan on pages 40-41.

"Finding No. 2019-001: Material Weakness ? Books and Records a. Statement of Condition: During 2019, the books and records of the Organization required significant adjustments in order to be fairly stated in accordance with generally accepted accounting principles. Also in 2019 the finance department was unable to provide a trial balance for audit in a timely manner, which caused significant delays in the completion of the audit. b. Criteria: Reconciliations need to be performed on a regular basis in order to ensure the quality of the books and records of an organization and timely financial reporting. c. Effect of Condition: The books and records of the Organization needed significant adjustments in order to be fairly stated. d. Cause of Condition: There was a change in the accounting software in 2019. Due to this, the finance department was unable to provide a trial balance for audit in a timely manner, which caused significant delays in the completion of the audit. e. Recommendation: Improvements, including timely reconciliations of account balances and timely financial reporting, should be made to the monthly reconciliation process surrounding the books and records of the Organization. All activity of the Organization must be disclosed to management in a timely manner and properly reported in the financial statements. f. Views of Responsible Officials: The Organization agrees with the finding. Refer to corrective action plan on following page. "

"Finding No. 2019-002: U.S. Department of Agriculture, Child and Adult Care Food Program, CFDA No. 10.558 a. Statement of Condition: In two of the forty files selected for income testing, the category that the client was charged to was a different eligibility category than what the client?s income eligibility was calculated to be. b. Criteria: The client?s meal eligibility is calculated and documented on the income eligibility form. c. Cause of Condition: Procedures are in place to calculate meal eligibility based on documentation of income and allowances. However, in this instance the documentation provided was inconsistent in the calculation of eligibility, and the reviewer did not compare the documentation to the eligibility calculation while reviewing the client?s file. d. Effect of Condition: The difference in the cost of the meals may be disallowed. e. Recommendation: The Organization should review its procedures for verifying the accuracy of the calculation of income eligibility from the calculation to the system. Reviewers should review the documentation to ensure it agrees. f. Views of Responsible Officials: The Organization agrees with the finding. Refer to corrective action plan on following page."

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