Minnesota Indian Women's Sexual Assault Coalition

Finding 2023-002: Significant Deficiency in Internal Control over Compliance: Approval of Executive Director’s Expenditures Information on the Federal Program: Assistance Listing Number 16.557 - Office on Violence Against Women: Tribal Domestic Violence and Sexual Assault Coalitions Program, award numbers: 15JOVW-22-GG-03618-MUMU, 15JOVW-21-GG-02267-MUMU Criteria: 2 CFR 200.3030 of Subpart D, “Post Federal Award Requirements Standards for Financial Program Management,” of the Uniform Guidance requires a nonfederal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award, including Activities Allowed or Unallowed and Allowable Costs and Cost Principles. Condition: Processes and procedures in place to approve expenditures did not include timely approval of expenses initiated by the Executive Director. Cause: The Executive Director or Operations Director approves all expenditures, however a process was not in place for a Circle Keeper (board member) to regularly review expenditures initiated by the Executive Director during 2022 and most of 2023. Effect or Potential Effect: Unallowable costs or activities could be charged to federal grants. Questioned Cost: None Context: As of the date of testing, documented approval was not available for two of forty items selected ($1,730 of $67,177) for assistance listing 16.557. Repeat finding: Yes, 2022-002 Recommendation: We recommend the Organization obtain approval of Executive Director’s expenses by a Circle Keeper (board member) prior to the expenses being charged to a federal grant. Planned Corrective Action: It was determined during the 2022 audit that expenditures initiated by the Executive Director did not have the required approval. At the time of the 2022-002 finding, an update was made to the procedures in the Financial Policies and Procedures manual Part III, Sections 2 and 4 to address the use of MIWSAC credit/debit cards for expenditures. This update was included with the corresponding corrective action plan in August 2023. The Executive Director’s credit/debit card purchases and expense reimbursement requests are now approved by the Keeper of Finances or the Keeper of Traditional Ways. This corrective action was fully implemented November 1, 2023.

Finding 2023-003: Significant Deficiency in Internal Control over Compliance: Approval of Non-Typical Payroll Expenditures Information on the Federal Program: Assistance Listing Number 16.526 - Office on Violence Against Women: Technical Assistance Initiative, award number: 2018-TA-AX-K002 Criteria: 2 CFR 200.3030 of Subpart D, “Post Federal Award Requirements Standards for Financial Program Management,” of the Uniform Guidance requires a nonfederal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award, including Activities Allowed or Unallowed and Allowable Costs and Cost Principles. Condition: Processes and procedures in place to approve expenditures did not include approval of expenses for vacation payouts outside of the vacation policy. Cause: The Organization paid out vacation for a terminated employee. This did not agree with the Organization’s vacation policy and documented approval of the decision was not available. Effect or Potential Effect: Unallowable costs or activities could be charged to federal grants. Questioned Costs: None Context: As of the date of testing, documented approval was not available for one of forty items selected ($5,015 of $106,184 expenses tested). Repeat finding: No. Recommendation: We recommend the Organization follow its policies and document any deviations therefrom. We also recommend documenting approval of all expenses charged to federal grants. Planned Corrective Action: During 2023, vacation was paid out for a terminated employee. This payment did not agree with the organization’s vacation policy and documented approval of the decision was not available. Involuntary terminations at MIWSAC are rare. In the case of the terminated employee, vacation was paid out as though the termination was a voluntary resignation. This error was an oversight during payroll processing. As a result of this finding, the current policies & procedures surrounding payout of earned, unused vacation will be reviewed at an upcoming Circle Keepers meeting. Any approved changes to the policy will be documented in the Employee Handbook and distributed to all employees. This corrective action will be completed no later than September 30, 2024

Material weakness in internal control over financial reporting: Material audit adjustment Criteria: Management is responsible for maintaining its accounting records in accordance with generally accepted accounting principles (GAAP). Condition: Two contributions with donor restrictions were recorded as without donor restriction. Context: Identified by the auditor during testing of revenue in the financial statement audit. Cause: Internal controls did not identify all contributions which included donor restrictions. Effect or Potential Effect: As a result of this condition, $70,000 was reclassified from revenue and net assets without donor restrictions to revenue and net assets with donor restrictions. Recommendation: We recommend the Organization provide review for all grant agreements to ensure amounts restricted by the donor are recorded with donor restriction. Responsible Official’s Response: Agree. Corrective Action will be for the AIOA Controller to consult with and collaborate with the AIOA CFO on the determination of the revenue treatment of grants and contributions received from private foundations to ascertain the existence of conditions and/or donor imposed restrictions.

Significant Deficiency in Internal Control over Compliance: Approval of Executive Director’s Expenditures. Information on the Federal Program: Assistance Listing Number 16.526 ‐ Office on Violence Against Women: Training and Technical Assistance Initiative and 16.557 Office on Violence Against Women: Tribal Domestic Violence and Sexual Assault Coalitions Program Award Numbers: 15JOVW‐21‐GG‐02267‐MUMU, 2018‐TA‐AX‐K002 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over compliance. Criteria: 2 CFR 200.3030 of Subpart D, “Post Federal Award Requirements Standards for Financial Program Management,” of the Uniform Guidance requires a nonfederal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award, including Activities Allowed or Unallowed and Allowable Costs and Cost Principles. Condition: Processes and procedures in place to approve expenditures did not include timely approval of expenses initiated by the Executive Director. Cause: The Executive Director or Operations Director approves all expenditures, however a process was not in place for a Circle Keeper (board member) to regularly review expenditures initiated by the Executive Director during 2022. Effect or Potential Effect: Unallowable costs or activities could be charged to federal grants. Questioned Cost: None Context: One of eleven items selected ($252 of $23,074 direct expenses tested) for assistance listing 16.526 and one of twenty‐four items selected ($377 of $21,809 direct expenses tested) for assistance listing 16.557 had not been approved as of the date of testing. Recommendation: We recommend the Organization provide evidence of the Executive Director’s expenses to a Circle Keeper for approval on a regular basis.Responsible Official’s Response: Agree. The two expenditures initiated by the Executive Director that did not have the required approval of the Keeper of Finances was an oversight and not in line with the Financial Policies and Procedures. We have determined an update is necessary to the procedures in the Financial Policies and Procedures manual to address the use of MIWSAC credit/debit cards for expenditures. We have updated Part III, Sections 2 and 4, which is included with the corrective action. Further, we will request the Circle Keepers to adopt these changes to the Financial Policies and Procedures at their next scheduled meeting. And, we will advise staff of the expense approval oversights revealed by the audit along with the updated procedures added to the Financial Policies and Procedures manual. This communication will be provided in writing as a memo to all staff.

Finding 2021-002: Material Weakness in Internal Control over Compliance: Internal Control over Schedule of Expenditures of Federal Awards Preparation Criteria: Pursuant to the guidance found in the Office of Management and Budget (OMB) 2 CFR Part 200, Appendix XI, the Organization has responsibility to: - Identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal program and award identification shall include, as applicable, the CFDA title and number, award number and year, name of the Federal agency, and name of the pass-through entity. - Prepare appropriate financial statements, including the schedule of expenditures of Federal awards. Condition: The SEFA prepared by the Organization did not include amounts received as a subrecipient. Cause: Lack of review of the classification of revenue and completeness of single audit reporting requirements on the SEFA. The Organization?s contract accountants prepared the SEFA for 2021 and were not aware that funding historically classified as program fees was received as a subrecipient. Effect or Potential Effect: Failure to report expenditures by grant ID exposes the Organization to be flagged by the awarding Federal agency. Questioned Cost: None Context: The draft SEFA prepared by the Organization for audit did not include $54,424 of expenditures of funds amounts received from a pass-through agency for 2021. Recommendation: We recommend the Organization enhance grant award tracking procedures to include a note as to whether the originating funder of an award is a Federal agency. Responsible Official?s Response: Our outsourced accounting services firm has prepared a workbook reflecting activities for each federal award, updated on a monthly basis. This workbook will reflect all award details by grant, including grant ID numbers, CFDA numbers, sub-recipient ID, original award amounts, award dates, monthly expenditures and remaining funds available. This worksheet will serve as the basis for creating the annual SEFA report.

Finding 2021-003: Material Weakness in Internal Control over Compliance: Filing of Single Audit Report Criteria: Pursuant to the Office of Management and Budget (OMB) 2 CFR section 200.512(a) Report submission, ?The audit must be completed and the data collection form ...must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day?? Condition: The Organization has not timely submitted the Single Audit Reporting Package for the fiscal year ended December 31, 2020; within nine months after the end of audit period. Cause: Lack of review of the classification of revenue and completeness of single audit reporting requirements on the SEFA. The Organization?s analysis for 2020 indicated they were not required to have a single audit performed. Effect or Potential Effect: Failure to file the required Single Audit Reporting Package timely could result in the loss of Federal funding. Questioned Cost: None Context: During the 2021 financial statement audit, the Organization identified an adjustment was needed to correct revenue in both 2021 and 2020 and additionally identified the pass-through funding referenced in finding 2021-002. Adding the 2020 pass through amounts to the 2020 SEFA caused the organization to exceed the $750,000 single audit threshold for 2020. Recommendation: We recommend the organization have a single audit performed for 2020 and submitted to the Federal Audit Clearinghouse as soon as possible. Responsible Official?s Response: We will ensure an annual, accurate SEFA report is prepared to determine if we meet the threshold for a single audit within 30 days of our fiscal year end. Our determination of necessity of a single audit will be discussed with our independent auditors in the audit planning discussion each year.

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