REFUGEE & IMMIGRANT SELF-EMPOWERMENT, INC.Non-Profit

Criteria - The grant agreements through Ethiopian Community Development Council, Inc. requires monthly reports to be submitted by the 15th day of the following month. Condition - The Organization did not submit 10 of the 60 monthly reports tested by the 15th day of the following month during the year ended September 30, 2023. Cause - Resulted from a lack of internal controls over financial reporting. Effect - The Organization is not in compliance with Uniform Guidance. Questioned Costs - None identified. Recommendation - We recommend that the Organization further develop internal controls in order to ensure that the Organization tracks the reporting requirement of the grant agreements to ensure they submit timely. Management’s Response - (a) Comments on the finding and recommendation: Refugee & Immigrant Self-Empowerment, Inc. acknowledges the need for enhanced internal controls to track grant reporting requirements. (b) Actions Taken: RISE has introduced a bookkeeper position within our finance department to alleviate the workload of the Finance Director and ensure timely submission of required grant reports. The Executive Director will oversee the submission of grant financial reports, ensuring they meet contracting deadlines. (c) Anticipated Completion Date: The position is already added and recruited on April 22, 2024.

Criteria - The grant agreement contains a matching requirement for the Organization of $55,000 with a minimum of $5,000 being cash. Condition - The Organization did not meet the non-cash requirement for the year ended September 30, 2023. Cause - Resulted from a lack of internal controls over financial reporting. Effect - The Organization is not in compliance with Uniform Guidance. Questioned Costs - None identified. Repeat Funding - This is a repeat finding of item 2022-003 as reported in the year ended September 30, 2022. Recommendation - We recommend that the Organization further develop internal controls in order to ensure that the Organization properly tracks the matching requirement of this grant agreement to ensure they meet the requirement. Management’s Response - (a) Comments on the finding and recommendation: Refugee & Immigrant Self-Empowerment, Inc. acknowledges improvement in the process of recognizing the allowable matching requirements is needed. (b) Actions Taken: Refugee & Immigrant Self-Empowerment, Inc. will ensure training for relevant program staff and implement robust procedures to accurately monitor and fulfill matching requirements stipulated in grant agreements. This will involve establishing clear guidelines for tracking and documenting matching contributions, assigning responsibility for oversight, implementing regular reviews, and conducting internal audits to ensure compliance. (c) Anticipated Completion Date: August 31, 2024

Criteria - Internal controls require that the Organization must receive approval for purchases made. Condition - Several invoices and receipts had no noted review or approval for the payment. Out of 40 expenditures examined, 17 were missing approvals. Cause - Resulted from a lack of internal controls over financial reporting. Effect - The Organization is not following proper internal control procedures. Questioned Costs - None identified. Recommendation - We recommend that the Organization further develop internal controls in order to ensure that the Organization maintains documented review and approvals for expenditures. Management’s Response - (a) Comments on the finding and recommendation: Refugee & Immigrant Self-Empowerment, Inc. acknowledges the need for the approval of purchases within the organization. (b) Actions Taken: Refugee & Immigrant Self-Empowerment, Inc. will conduct a thorough review of current expenditure review and approval processes to identify gaps and weaknesses. Clear documentation standards and procedures will be developed, outlining roles, responsibilities, and methods for maintaining expenditure review and approval records. Staff members will receive comprehensive training on these new standards, and compliance will be regularly monitored. (c) Anticipated Completion Date: August 31, 2024

Criteria - Internal controls require the Organization to define authorization level and responsibilities for credit card usage in order to prevent unauthorized use. Condition - Employees have been noted using credit cards assigned to other employees with no supporting documentation to verify the identity of the user or purpose of the transaction leading to a heightened risk of fraudulent activity or misappropriation of funds. Cause - Resulted from a lack of internal controls over financial reporting. Effect - The Organization is not following proper internal control procedures. Questioned Costs - None identified. Recommendation - We recommend that the Organization further develops its internal control policies to establish a formal approval and review process for credit card transactions that establishes the purpose and approval for the purchase. Management’s Response - (a) Comments on the finding and recommendation: Refugee & Immigrant Self-Empowerment, Inc. acknowledges the need for documenting credit card usage. (b) Actions Taken: Refugee & Immigrant Self-Empowerment, Inc. will establish a clear process requiring verification of identity and purpose for each transaction. We will implement strict controls, such as mandatory receipts, detailed transaction logs, and periodic audits. Additionally, we will provide comprehensive training to all employees on the proper use and accountability of credit cards, emphasizing the importance of adherence to established protocols. We will regularly review and update these procedures to adapt to evolving risks and maintain effective internal controls. (c) Anticipated Completion Date: August 31, 2024

Criteria - The grant agreement contains a matching requirement for the Organization of $10,000. Condition - The Organization did not meet this requirement for the year ended September 30, 2022. Cause - Resulted from a lack of internal controls over financial reporting. Effect - The Organization is not in compliance with Uniform Guidance. Questioned Costs - None identified. Recommendation - We recommend that the Organization further develop internal controls in order to ensure that the Organization tracks the matching requirement of this grant agreement to ensure they meet the requirement. Management?s Response - (a) Comments on the finding and recommendation: Duly noted. (b) Actions Taken: The finance team is working on the financial requirements of the grants and in addition to that we are adding monthly grant reports to the pipeline for the finance department. The reports are going to be designed in a way to show the approved budget for all the lines, their relevant expenditures up to the month ended and remaining balances, all included with required matches approved in the individual grant budgets. (c) Anticipated Completion Date: May 31, 2023.

Criteria - Internal controls require that the Organization must receive approval for purchases made. Condition - The Organization?s current internal control process does not include an approval process by the Board of Directors for purchases made by the Executive Director. The Executive Director made purchases with grant funding from both programs tested without an authorization procedure in place as is done for other employees. Cause - Resulted from a lack of internal controls over financial reporting. Effect - The Organization is not following proper internal control procedures. Questioned Costs - None identified. Recommendation - We recommend that the Organization further develop internal controls in order to ensure that the Organization receive approval from the Board of Directors for any expenditures made by the Executive Director. Management?s Response - (a) Comments on the finding and recommendation: Approval process has been developed subsequent to September 30, 2022. (b) Actions Taken: We are working with an HR consultant to update our staff handbook, update payroll processing system, review, and update time management, and reassure all the HR procedures and guidelines are up to date and meet the state and federal requirements. We are also looking for some resources and non-profit financial management professionals to update our administrative and financial manuals and guidelines to put more controls in place to mitigate all financial risks. (c) Anticipated Completion Date: July 31, 2023.

Criteria - Internal controls require the Organization to make all its personnel service payments through the payroll system. Condition - Payments were made to employees for time worked and recorded but not entered in the payroll system. Short-term employees received payments outside of the payroll system for their contracted period of employment. Cause - Resulted from a lack of internal controls over financial reporting. Effect - The Organization is not following proper internal control procedures. Questioned Costs - None identified. Recommendation - We recommend that the Organization further develops its internal control policies to pay all employees through the payroll system. The Organization should work to improve the review and approval process to properly differentiate between employees and subcontractors and to ensure all employees are paid through the payroll system. Management?s Response - (a) Comments on the finding and recommendation: Duly noted. (b) Actions Taken: As mentioned above for audit finding 2022-004, we are going to have some specific guidance regarding this process once the HR consultant completes his project. We have already started putting short term contractors in the ADP (payroll system). (c) Anticipated Completion Date: July 31, 2023.