LAS VEGAS-CLARK COUNTY URBAN LEAGUENon-Profit

Criteria: Per 2 CFR 200.302(a) and 2 CFR 200.303, non-Federal entities must maintain adequate records supporting Federal program transactions and implement internal controls to ensure compliance. The OMB Compliance Supplement (2025), Part 4 – HHS, for the CCDF program requires documentation supporting eligibility determinations, including documentation to support applicable health and safety standards, and maintain compliance to remain eligible for payment. Condition: During testing, the Organization was unable to provide required eligibility documentation for four children, representing two unique families. In addition, two providers were noted who were deficient in meeting the health and safety requirements of the Program and were subsequently terminated as participating providers. Despite the termination status, these providers later received additional program payments. The Organization was unable to provide documentation demonstrating that the providers corrected deficiencies or were re-approved prior to receiving subsequent payments. Because supporting documentation was not retained, we could not determine whether the providers met requirements to resume participation. The Organization explained that eligibility and health and safety documentation historically resided within a system of record that has been transferred entirely to the State following a transition of the program’s administration to the State. The Organization no longer retains access to that system or copies of all documentation contained therein. Cause: As part of the transition of program responsibilities back to the State, the Organization returned program records and no longer retained access to the State-managed system that housed eligibility information. The Organization did not maintain its own copies of all eligibility or health and safety documentation needed to support future audits. Effect: The Organization cannot demonstrate compliance with Federal eligibility documentation requirements for the affected participants. In addition, the Organization could not demonstrate that payments totaling $34,018 were made to providers who met health and safety requirements of the Program at the time services were delivered. These costs are considered questioned due to lack of supporting documentation. Questioned Costs: $34,018 Recommendations: The Organization should establish procedures to ensure eligibility documentation is retained by the Organization, even when a third-party system serves as the primary repository. Future programs should include a documented record-retention plan ensuring audit-ready records remain accessible.

Finding: 2019-001 Criteria: The Organization?s internal control and accounting systems should identify when expenses are incurred and ensure expenses and any related revenues are recorded in the correct period. Condition: The Organization?s financial close and reporting process did not require expenses that were received for vendor invoices after year end but incurred before year end to be recorded to correct period for the Child Care & Development Block Grant. Because this is a cost reimbursement grant, these expenditures would have been considered reimbursable and therefore, revenues should have also been recognized. Cause: The Organization was matching revenues and expenditures based on the grant period instead of when those revenues and expenditures were earned and incurred. Effect: Control deficiencies and misunderstandings noted above resulted in adjustments to the financial statements and expenditures and related revenues were recorded in the subsequent fiscal year. The adjustments had no net effect on net income but affected the revenues presented on the Schedule of Expenditures of Federal Awards. Recommendation: The Organization should determine when to record expenditures and related revenues to federal grants based upon when expenses become obligated instead of when grant expenditures are reimbursable. Management should be reviewing the obligation dates to validate which year expenditures and related revenues belong in. We recommend that expenses be recorded when they are incurred, and the related receivable and revenues be recorded in the same period to match those expenditures.

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