Northwest Side Housing CenterNon-Profit

Criteria: 2 CFR §200.430(h)(8)(i) requires that amounts of personnel expenses are properly documented and include appropriate controls and documentation to support the distribution of the employee's wages among specific activities if the employee works on more than one award. Condition: Of the testing population, for 3 of the 4 grant awards, the Center was unable to provide timesheets or other documentation to substantiate the application of each individual's time for that period. Cause: Due to inadequate staffing resources, the Center was not able to ensure maintenance of adequate documentation. Effect: The Center isnot able to demonstrate that the personnelexpenses allocated to the grant was proper and ensure avoidance of duplication of funding requests for the same amounts. Questioned Costs: Our sample of 46 items consisted of $53,195 in costs of which $17,698 were identified as known questionedcosts.Duetothelack of timesheetsmaintainedfor3of the4grants,theentirepopulationsforthe3grantsof$136,423 is considered to be likely questioned costs. Recommendation: Management should review and refine its process of tracking payroll costs by grant to ensure that the costs are supported by a system of internal controls which provides reasonable assurance that the charges are accurate, are properly allocated, and reasonably reflect the total activity for which the employee is compensated. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.

The Center is not able to ensure that the expenses submitted for reimbursement tie back to the accounting records to ensure no duplicate or overcharging of expenditures to grants. Condition: The Center was unable to provide general ledger detail to support the amounts included on the monthly vouchers charged to the grants. Cause: Due to limited staffing resources, the Center was not able to ensure maintenance of adequate documentation. Effect: The Center must be able to demonstrate the expenses allocated to the program is properly supported to ensure adequate records that the expenditure has been incurred and not allocated to other programs. Questioned Costs: Unknown Recommendation: Management should review and refine its process of reporting documentation to ensure that documentation of the general ledger activity that supports the amount on the vouchers is maintained and that total expenditures for the year is reconciled back to the general ledger on an annual basis. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.

Criteria: 2 CFR sections §200.212 and §200.318(h); 48 CFR section §52.209-6 outlines that the non-Federal entity must maintain a procurement policy and verify that agencies in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The Center does not have a procurement policy in place nor does it retain the documentation of verification of vendors not suspended or debarred prior to entering into a contract with vendors. Cause: The Center does not have a procurement policy that contains the necessary provisions stated above. Effect: Despite having a written financial purchasing policy, if the Center does not maintain sufficient documentation of procurement evaluations and decisions, the Center's procurement practices will not comply with the Uniform Guidance. Questioned Costs: None Recommendation: The Center should develop a procurement policy in accordance with Uniform Guidance requirements and retain formal documentation with regard to its procurement decisions. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.

Criteria: Grant agreements and applicable federal/state regulations require timely submission of reimbursement vouchers to ensure compliance with funding conditions and to maintain uninterrupted cash flow. Timelyfiling is essential for accurate financial reporting and program continuity. Condition: The Center did not submit monthly reimbursement vouchers within the required timeframe during the audit period.23of the39voucherswerefiledpasttheestablisheddeadlines,resultingindelayedreimbursementsfor22ofthe vouchers and no reimbursement for 1 voucher from granting agencies. Cause: The delays were primarily due to insufficient coordination between program and finance staff, lack of a formal tracking system for voucher deadlines, and competing priorities that diverted attention from timely submission. Effect:Latesubmissionsledtodelaysandlackof receivingreimbursements,whichimpactedtheCenter’sabilitytomeet programmatic obligations and manage cash flow effectively. Repeated delays can also jeopardize future funding or trigger additional oversight from grantor agencies. Questioned Costs: None Recommendation: The Centershould developamorerobust processfor preparingand submittingvoucherstogranting agencies to ensure timely filings. Views of Responsible Officials: Management has indicated that corrective steps are being taken to ensure that monthly reimbursement vouchers are submitted timely in the future; see corrective action plan.

Criteria: 2 CFR §200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA). Condition: On the original SEFA provided for the audit, one grant was inaccurately omitted from the schedule and one grant was inaccurately included in the schedule, resulting in restatements of the SEFA. Cause: The grant agreement received bythe Center indicated that no federal funds were being awarded, but the Illinois Comptrollerhadearmarkedthefundsfrom afederalfund.Thegrantthatwasinaccuratelyincludedintheschedulewasa subcontractor agreement which does not need to be included in the SEFA. Effect: The Center was not in compliance with 2 CFR §200.510(b) and the SEFA was inaccurate and not complete. Questioned Costs: None Recommendation: Management should review grant awards and agreements and verify whether the funds received were from federal funds as well update its understanding of what agreements should be included in the SEFA. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.

Criteria: Under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance, 2 CFR §200.305), non-federal entities must minimize the time between the receipt of federal funds and the disbursement of those funds for program purposes. Reimbursements must be used promptly to pay allowable costs incurred. Condition:Duringtheauditperiod,theCentersubmittedreimbursementrequestsfundsforallowableprogramexpenses andreceivedreimbursementinthesubsequentyear,butdidnotremitpaymenttovendorsinatimelymanner.3of the14 vendor invoices remained unpaid for extended periods despite the Center having received reimbursement for those costs. Cause: The delays in vendor payments were primarily due to weaknesses in internal cash management controls, including lack of reconciliation between reimbursement receipts and outstanding payables, and insufficient oversight of accounts payable processing. Effect: The Center was not in compliance with 2 CFR §200.305. Failure to promptly pay vendors after receiving reimbursement can also result in reputational risk, strained vendor relationships, and potential disallowance of costs by grantor agencies. Questioned Costs: None Recommendation: Management should establish procedures to ensure timely disbursement of funds upon receipt of reimbursements to vendors. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.