Program: ALL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Allowable Costs/Costs Principles (Payroll Costs) Repeat Finding: Yes Condition: Management did not review and approve the time and effort allocation of employees working under federal grants resulting in significant post-close adjustments. Criteria: In accordance with 2 CFR §200.430, the non-federal entity may compensate for personal services including all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the federal award, including but not necessarily limited to wages and salaries. The costs of compensation are allowable to the extent that they satisfy the specific requirements of this part. Additionally, as defined in 2 CFR Ch. II (1-1-18 Edition) §200.430(g), for compensation to members of nonprofit organizations, trustees, directors, associates, officers, or the immediate families thereof, determination must be made that such compensation is reasonable for the actual personal services rendered rather than a distribution of earnings in excess of costs. This may include director’s and executive committee member’s fees, incentive awards, allowances for off-site pay, incentive pay, location allowances, hardship pay, and cost-of-living differentials. Cause: Management did not review and approve the time and effort allocation of employees working under federal grants. Effect: If the time and allocation efforts of employees working under federal grants were not reviewed and approved in compliance with Uniform Guidance, the Foundation would not identify the compensation allocation and billing to the federal grants are reasonable amount. Questioned Costs: Unknown. Recommendation: We recommend that the Foundation review and approve the time and effort allocation of employees working under federal grants to ensure proper tracking and billing for compensation amount allowed per the federal award. Auditee Response and Corrective Action Plan: Refer to management’s corrective action plans. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-002: Significant Deficiency Activities Allowed or Unallowed and Allowable Cost/Cost Principle (Payroll) Responsible Official’s Response and Corrective Action Plan We concur with the finding related to deficiencies in our time tracking Process. Starting in the fourth quarter of fiscal year 2025, a time tracking system using Paychex Time & Attendance was implemented. This system is designed to accurately capture, and record employees’ hours worked by project/grant. Comprehensive training sessions have been conducted for all affected employees to ensure they are proficient in using the new time tracking system. Supervisors have received additional training on monitoring and verifying time entries. Planned Implementation Date of Corrective Action Plan October 2025 Person Responsible for Corrective Action Plan Natésha Johnson, Director of Finance and Administration Dr. Felecia Nave, President and Chief Executive Officer
2023-003
Program: ALL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Procurement and Suspension and Debarment Repeat Finding: Yes Condition: During our audit we noted that procurement documentation was not available to support the selection of a sole source vendor nor able to obtain documentation to support the Foundation entering into contractual agreements with vendors who were not debarred or suspended from doing business with the federal government. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. Per 2 CFR 200.320 General procurement: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Per 2 CFR 200.318 General procurement: (b) The non-federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in this part. Per Uniform Guidance, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Cause: Program personnel were unaware of the requirement included in Uniform Guidance related to procedures required for procurement. Effect: If procurement were not in compliance with Uniform Guidance, the Foundation would not identify the noncompliance timely. Questioned Costs: Unknown. Recommendation: We recommend that management develop and implement written procurement policies and procedures in accordance with Uniform Guidance, provide periodic training to program personnel, and establish a review process to ensure procurement activities comply with applicable federal requirements. We also recommend the Foundation follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document these procedures. Auditee Response and Corrective Action Plan: Refer to management’s corrective action plans. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-003: Significant Deficiency and Noncompliance over Procurement, Suspension, and Debarment Responsible Official’s Response and Corrective Action Plan We concur with the finding. The Foundation has an informal process of reviewing vendors and determining if they have been suspended or debarred. However, there is not a formal process where proper documentation such as screenshots of the search are saved. Due to the transition in the accounting department, we were not aware of these specific criteria at the time. We were notified of these requirements after the end of fiscal year 2024. To address these issues, a comprehensive process was implemented during fiscal year 2025 to ensure proper documentation and compliance with procurement regulations. This process will include: 1. Ensuring that all sole source vendor selections are properly documented and justified. 2. Verifying and maintaining records that confirm vendors are not debarred or suspended from doing business with the Federal Government before entering into contractual agreements. We are committed to improving our procedures and ensuring compliance with all applicable regulations moving forward. Planned Implementation Date of Corrective Action Plan June 2025 Person Responsible for Corrective Action Plan Natésha Johnson, Director of Finance and Administration Dr. Felecia Nave, President and Chief Executive Officer Luwanda Jenkins, Vice President of Partnerships and External Relation
Program: ALL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Subrecipient Monitoring Repeat Finding: Yes Condition: Management did not verify that its subrecipients were not suspended or debarred or otherwise excluded from participating in the transactions. Criteria: In accordance with 2 CFR §200.303, the non-federal entity must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Pursuant to 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h), a pass-through entity must identify the award and applicable requirements, evaluate risk, monitor, and ensure accountability of subrecipients. Additionally, when entering into subaward transactions, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2CFR 180.300). Cause: Program personnel were unaware of the requirement included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect: If subrecipients were not in compliance with Uniform Guidance, the Foundation would not identify the noncompliance timely. Questioned Costs: Unknown. Recommendation: We recommend that the Foundation implements subrecipient monitoring controls by documenting and implementing procedures in accordance with Uniform Guidance requirements, including providing training to program personnel and developing written policies and checklists to ensure consistent compliance. Auditee Response and Corrective Action Plan: Refer to management’s corrective action plans. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-004: Significant Deficiency and Noncompliance Over Reporting Responsible Official’s Response and Corrective Action Plan We concur with the finding. We acknowledge the importance of adhering to the Federal guidelines for the submission of the reporting package within the mandated nine-month period. This finding is a result of the transition in the accounting team. To address this, the 1890 Universities Foundation will implement the following actions: 1. Policies and Procedures Development: We will create and enforce comprehensive policies and procedures to ensure that audits are initiated and completed promptly. This will include detailed timelines and checkpoints to monitor progress throughout the audit process. In addition, we will adhere to a year end closing process that reconciles all significant accounts. 2. Training for Grant Administration: We will provide training for individuals responsible for administering federal assistance programs within the 1890 Universities Foundation. This training will cover essential aspects of grant administration, ensuring that our team is well-equipped to manage these programs efficiently and in compliance with federal requirements. Planned Implementation Date of Corrective Action Plan December 2025 Person Responsible for Corrective Action Plan Dr. Felecia Nave, Chief Executive Officer & President Natésha Johnson, Director of Finance and Administration
2023-002
ALL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance Over Reporting Repeat Finding: No Condition: The Foundation’s single audit report and the data collection form were not completed within nine months after the end of the audit period. Criteria: Per 2 CFR 200.512: Report Submission. (a) General. (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section 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; and (2) Unless restricted by federal statutes or regulations, the auditee must make copies available for public inspection. Auditees and auditors must ensure that their respective parts of the reporting package do not include protected personally identifiable information. Cause: In 2024, the Foundation did not complete the single audit report and submit the required data collection form within the nine-month timeframe due to delays in compiling necessary financial information and finalizing supporting documentation. Effect: Failure to submit the reporting package and data collection form within the required timeframe results in non-compliance with the Uniform Guidance reporting requirements. Questioned Costs: None. Recommendation: We recommend that the Foundation creates policies and procedures to ensure that audits are started and completed in a timely fashion so the reporting package submission to the federal government can be made in accordance with federal guidelines. We also recommend that individuals responsible for administering federal assistance programs with the Foundation receive training in grant administration. Auditee Response and Corrective Action Plan: Refer to management’s corrective action plans. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-005: Significant Deficiency and Noncompliance over Subrecipient Monitoring Responsible Official’s Response and Corrective Action Plan We concur with the findings and acknowledge the significant deficiency and instance of noncompliance related to subrecipient monitoring. We are committed to strengthening internal controls to ensure full compliance with applicable federal requirements. During 2025, we implemented a corrective action plan that included the development and adoption of a comprehensive subrecipient monitoring policy and the establishment of standardized, documented procedures for the review of financial and performance reports. These actions are designed to create a consistent, risk-based, and fully documented monitoring framework that enhances accountability, reduces compliance risk, and ensures proper stewardship of federal funds. We remain committed to continuously improving our processes and maintaining compliance with all applicable regulations moving forward. Planned Implementation Date of Corrective Action Plan November 2025 Person Responsible for Corrective Action Plan Natésha Johnson, Director of Finance and Administration Dr. Felecia Nave, President and Chief Executive Officer
Significant Deficiency and Noncompliance over Subrecipient Monitoring Repeat Finding: Yes Condition: Management did not verify that its subrecipient’s were not suspended or debarred or otherwise excluded from participating in the transactions. Criteria: In accordance with 2 CFR §200.303, the non-Federal entity must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Pursuant to 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h), a pass-through entity must identify the award and applicable requirements, evaluate risk, monitor, and ensure accountability of subrecipients. Additionally, when entering into subaward transactions, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA). Cause: Program personnel were unaware of the requirement included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect: If subrecipients were not in compliance with Uniform Guidance, the Foundation would not identify the noncompliance timely. Questioned Costs: Unknown. Recommendation: We recommend that the Foundation continue to improve the subrecipient monitoring controls its Federal programs and prepare and maintain a written plan to monitor its subrecipients. Auditee Response and Corrective Action Plan: Refer to management’s corrective action plans. Auditor’s Conclusion: Finding remains as stated.
Finding 2023-002 Program: AL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Subrecipient Monitoring Corrective Action Plan for Significant Deficiency and Noncompliance over Reporting The Foundation developed a matrix for subrecipient monitoring and Single Audit reports/findings is a key attribute in our assessment of risk. Our subrecipient monitoring policy and procedure was completed on November 30, 2023. Additionally, we hired a Program Coordinator in June 2023. The Program Coordinator focuses on the interface work required by our organization to support our grants administration role including subrecipient monitoring The Foundation requires quarterly progress and financial reports from our subrecipients, and our current process is to increase scrutiny of reports and supporting documents, when risk is medium or high. The Foundation performed reviews of subrecipients in 2023, however, the time stamp was not effectively documented. The Foundation has implemented procedures to effectively time stamp the verification process using Sam.gov going forward. Contact Person: Calece Hilliard, CFAO 1890 Universities Foundation Completion Date: September 30, 2024
2022-002
Significant Deficiency and Noncompliance over Allowable Costs/Costs Principles Repeat Finding: No Condition: Management did not review and approve the time and effort allocation of employees working under Federal grants. Criteria: In accordance with 2 CFR §200.430, the non-Federal entity may compensate for personal services including all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. The costs of compensation are allowable to the extent that they satisfy the specific requirements of this part. Additionally, as defined in 2 CFR Ch. II (1-1-18 Edition) §200.430(g), for compensation to members of nonprofit organizations, trustees, directors, associates, officers, or the immediate families thereof, determination must be made that such compensation is reasonable for the actual personal services rendered rather than a distribution of earnings in excess of costs. This may include director’s and executive committee member’s fees, incentive awards, allowances for offsite pay, incentive pay, location allowances, hardship pay, and cost-of-living differentials. Cause: Management did not review and approve the time and effort allocation of employees working under federal grants. Effect: If the time and allocation efforts of employees working under federal grants were not reviewed and approved in compliance with Uniform Guidance, the Foundation would not identify the compensation allocation and billing to the federal grants for a reasonable amount. Questioned Costs: Unknown. Recommendation: We recommend that the Foundation review and approve the time and effort allocation of employees working under federal grants to ensure proper tracking and billing for compensation amount allowed per the federal award. Auditee Response and Corrective Action Plan: Refer to management’s corrective action plans. Auditor’s Conclusion: Finding remains as stated.
Program: AL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Allowable Costs/Costs Principles Corrective Action Plan for Significant Deficiency and Noncompliance over Reporting Foundation employees’ time and effort reports are submitted monthly to the Director of Finance. The Director of Finance reviews time and effort reports and compiles the data to allocate personnel expenditures, however, the time stamp of approvals was not effectively documented during 2023. The Foundation has implemented procedures to effectively time stamp the review and approval process, each month. Contact Person: Calece Hilliard, CFAO 1890 Universities Foundation Completion Date: September 30, 2024
Finding 2022-001 Programs: All Material Weakness and Noncompliance over Financial Reporting Repeat Finding: Yes Condition: During our audit, it came to our attention that the 2022 opening net assets did not reconcile to the 2021 independent audited amounts. There were several changes to the prior year balances after the end of the audit. Additionally, there is no supervisory review of journal entries and general ledger activity on a monthly basis. Criteria: In accordance with Uniform Guidance, the Foundation must maintain an adequate system of internal control over financial reporting to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles. Additionally, ? 200.510 requires the auditee to prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. Cause: Accounting personnel made changes to the general ledger accounts after the independent audit was finalized, which changed the reporting of certain prior year balances and account activity. Effect: A detailed review of journal entries and other financial analysis for the financial statement accounts could allow for misstatements, errors, and irregularities to go undetected. Also, accurate financial information may not have been available to make management decisions. Questioned Costs: Unknown. Recommendation: We recommend the Foundation develop formal written procedures for the monthly and year-end financial reporting procedures and checklists to assist in the close and preparation of financial its statements. These policies should ensure reconciliations and other account analyses are completed and reviewed by appropriate supervisory personnel. Auditee Response and Corrective Action Plan: Refer to management?s corrective action plans. Auditor?s Conclusion: Finding remains as stated.
Finding 2022-001 SB Finding: During our audit, it came to our attention that the 2022 opening net assets did not reconcile to the 2021 independent audited amounts. There were several changes to prior year balances after the end of the audit. Additionally, there is no supervisory review of journal entries and general ledger activity on a monthly basis. Foundation?s Response: The Foundation does not concur. The auditor advised the Foundation that the material weakness finding was due to the ?additional time and effort needed to reconcile opening balances.? During the 2021 audit, the Foundation advised the auditor that general ledger account names would change in 2022, as part of the corrective action plan to clear the 2021 finding. The auditor acknowledged observing differences during the 2022 entrance conference, however there was no coordination to map account name changes prior to uploading the Foundation?s financial statements into the auditor?s system. As a result, multiple accounts did not map correctly to the 2021 account names and dozens of variances were created. Account name changes fell into two categories. First, we added clarifying language to distinguish expenditure accounts as G&A or Program. For example, the account name Travel: Reimbursements was changed to Company Travel: Reimbursements to clearly identify the account as a G&A expenditure. The purpose of which was to improve the effectiveness of account reconciliations, and reduce our risk of erroneous financial statement presentation, and our risk of erroneously charging an unallowable cost to federal funds. The Foundation updated 12 general ledger account names, and when posted into the auditor?s system, they were added as new accounts. This initially resulted in 24 account balance variances, however once the accounts were mapped, the variances were resolved. A second category of account changes involved the Foundation?s revenue accounts. The Foundation provided the auditor with a detailed accounting treatment plan during the 2021 audit as advance notice for 2022. We added primary accounts to clearly distinguish a funding source as Federal, Federal pass-through, non-Federal, Corporate and Private Donor, for the purpose of standardizing year-end accrual procedures and to ensure greater accuracy in the carry forward of net assets. Thirteen revenue accounts were moved under the new primary accounts, and this resulted in 18 variances in the SB system. Again, once the accounts were mapped, the variances were resolved. The Foundation does not expect mis-matched accounts to occur in the future. During our variance reconciliation, the Foundation added SB?s numerical codes to our account names to allow SB?s system to match records numerically, rather than by name. The Foundation did adjust two year-end accrual balances to correct items missed in 2021. During the 2022 audit the Foundation requested guidance on restating the 2021 statements for the adjustments, however, because the amount was immaterial, the auditor recommended the adjustment be made in 2022. Foundation removed the 2021 post-audit adjustments and posted them to 2022. The total amount of the adjustments was $126,031. The auditor?s corrective action was completed after the 2021 audit. Reconciliations are completed monthly, quarterly, and/or annually. Additionally, we engaged a bookkeeper that is credentialed as a certified professional advisor for our accounting software. The bookkeeper?s beginning task was to perform a ?health check? of the accrual accounts set up during the 2021 audit, and we were assured of the effectiveness of our accounts. On a monthly basis, the bookkeeper performs monthly account reconciliations, financial statement preparation, and variance identification, when applicable. The reconciliations are overseen by Foundation?s Director of Finance, a certified public accountant.
2021-001
Finding 2022-002 Program: AL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Subrecipient Monitoring Repeat Finding: Yes Condition: Management did not verify that its subrecipient?s were not suspended or debarred or otherwise excluded from participating in the transactions. Criteria: In accordance with 2 CFR ?200.303, the non-Federal entity must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Pursuant to 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h), a pass-through entity must identify the award and applicable requirements, evaluate risk, monitor, and ensure accountability of subrecipients. Additionally, when entering into subaward transactions, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management(SAM)Exclusions maintained by the General Services Administration(GSA). Cause: Program personnel were unaware of the requirement included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect: If subrecipients were not in compliance with Uniform Guidance, the Foundation would not identify the noncompliance timely. Questioned Costs: Unknown. Recommendation: We recommend that the Foundation continue to improve the subrecipient monitoring controls its Federal programs and prepare and maintain a written plan to monitor its subrecipients. Auditee Response and Corrective Action Plan: Refer to management?s corrective action plans. Auditor?s Conclusion: Finding remains as stated.
Finding 2022-002 Condition: Management did not verify that its subrecipient?s were not suspended or debarred or otherwise excluded from participating in the transactions. Foundation?s Response: The Foundation does not concur. 2 CFR Part 180 provides OMB guidance ?only to Federal agencies? (2CFR ? 180.5). As a pass-through entity, the Foundation falls under Uniform Guidance requirements at 2 CFR 200.332. Verification that subrecipients are not suspended, debarred or otherwise excluded is not a requirement of 200.332. However, the Foundation is committed to diligence in our stewardship of Federal funds, therefore we took the auditor?s comment into consideration, and incorporated an annual review of the Do Not Pay list into our subrecipient pre-award risk assessments.
2021-002
Finding 2021-001 Programs: All Material Weakness and Noncompliance over Financial Reporting Repeat Finding: Yes Condition: During our audit, it came to our attention that several key accounts (cash, receivables, unearned revenue, payables, etc.) had not been reviewed as of year-end. The Foundation had material post year-end adjustments to present its financial statements in accordance with generally accepted accounting principles. Such adjustments related to errors in revenue recognition and the completeness of liabilities (both material and immaterial) that were undiscovered throughout the fiscal year. Criteria: In accordance with Uniform Guidance, the Foundation must maintain an adequate system of internal control over financial reporting to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles. Additionally, ? 200.510 requires the auditee to prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. Cause: The Foundation had not been required to prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with ? 200.510 prior to January 1, 2020, as Federal awards did not exceed $750,000. There was additional time and effort required by the Foundation?s personnel to prepare for the Uniform Grant Guidance audit. Effect: The delay in completing account analysis for the financial statement accounts could allow for misstatements, errors, and irregularities to go undetected. Also, accurate financial information may not have been available to make management decisions. Questioned Costs: Unknown. Recommendation: We strongly recommend the Foundation develop a formal written procedure to develop monthly and year-end financial reporting procedures and checklists to assist in the preparation of financial statements. These policies should ensure reconciliations and other account analyses are completed and reviewed by appropriate supervisory personnel. Finding 2021-001 (continued) Auditee Response and Corrective Action Plan: Refer to management?s corrective action plans. Auditor?s Conclusion: Finding remains as stated.
Finding 2021-001 Programs: All Material Weakness and Noncompliance over Financial Reporting Corrective Action Plan for Material Weakness and Noncompliance over Financial Reporting The Foundation concurs with the finding, and auditor recommendations. Prior to the audit, the Foundation?s financial statements were maintained on a cash basis so key general ledger accounts and accounting procedures required for accrual-based financial statements did not exist. Key accounts have now been added. For post year-end adjustments, most were necessary to recognize assets and liability in the proper accounting period. Adjustments to cash were also necessary due to erroneous and/or mismatched accounts payable and receivable entries. These errors occurred because accounting records were not reconciled to our bank statements for an extended period of time, and when the reconciliations did occur the Foundation was unable to resolve the errors in the records. We believe the errors minimally impacted financial statement users because our prior statements were issued on a cash rather than accrual basis. Accounts payable and receivable balances were not considered in our reports. The Foundation is finalizing new/additional reconciliation processes in consultation with the auditors, and these procedures will include a checklist, and monthly, quarterly and year-end reconciliations. Yearend procedures will be fully implemented for 2022 audit testing.
2020-001
Finding 2021-002 Programs: All Significant Deficiency and Noncompliance over Reporting Repeat Finding: Yes Condition: The Foundation?s audited financial statements were not completed, within nine months after the end of the audit period. Criteria: In accordance with 2 CFR ? 200.512, 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. Cause: The Foundation had not been required to prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with ? 200.510 prior to January 1, 2020.. Effect: The Foundation was not in compliance with Uniform Guidance. Questioned Costs: None. Recommendation: We strongly recommend the Foundation develop a formal written procedure to develop monthly and year-end financial reporting procedures and checklists to assist in preparation of financial statements. Auditee Response and Corrective Action Plan: Refer to management?s corrective action plans. Auditor?s Conclusion: Finding remains as stated.
Finding 2021-002 Programs: All Significant Deficiency and Noncompliance over Reporting Corrective Action Plan for Significant Deficiency and Noncompliance over Reporting The Foundation concurs with the finding, and auditor recommendations. For 2022 and beyond, the Foundation will incorporate additional procedures to allow for our financial statements to be prepared and presented annually, and on an accrual basis. We are finalizing new/additional reconciliation processes in consultation with the auditors, and these procedures will include a checklist, and monthly, quarterly and year-end reconciliations. Year-end procedures will be fully implemented for 2022 audit testing.
2020-002
Finding 2021-003 Programs: All AL No. 10.229 EXCITE: Extension Collaborative on Immunization, Teaching and Engagement Significant Deficiency and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: Management was unaware of the requirement to perform subrecipient monitoring. Criteria: In accordance with 2 CFR ?200.303, the non-Federal entity must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Pursuant to 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h), a pass-through entity must identify the award and applicable requirements, evaluate risk, monitor, and ensure accountability of subrecipients. Cause: Program personnel were unaware of the requirement included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect: If subrecipient was not in compliance with Uniform Guidance, the Foundation would not identify the noncompliance timely. Questioned Costs: Unknown. Recommendation: We recommend that the Foundation establish and implement controls for the program and prepare and maintain a written plan to monitor its subrecipients. Additionally, we recommend training on the Uniform Guidance requirements related to subrecipient monitoring. Auditee Response and Corrective Action Plan: Refer to management?s corrective action plans. Auditor?s Conclusion: Finding remains as stated.
Finding 2021-003 Programs: EXCITE: Extension Collaborative on Immunization, Teaching and Engagement Significant Deficiency and Noncompliance over Subrecipient Monitoring Corrective Action Plan for Significant Deficiency and Noncompliance over Subrecipient Monitoring The Foundation partially concurs with the finding, and fully concurs with the recommendations. Management was unaware of 2 CFR 200.332 (b)(2) which required us to evaluate subrecipients risk of noncompliance through the review of Single Audit reports. The Foundation was aware of 2 CFR 200.332 (d)(1), and we included quarterly progress and financial report requirements into the terms and conditions of our subrecipient award agreements. Monitoring efforts were not always effective however when reports were delinquent, due to staffing constraints. The condition was improved with the addition of new staff, the development of tracking mechanisms, and more effective communication channels for pursuing delinquent reports. To address the 2 CFR 200.332 (b)(2) noncompliance, the Foundation implemented a new procedure in October 2022, to track and review subrecipient Single Audit reports posted to the Federal Audit Clearinghouse. During our review we looked at Single Audit reports from both 2020 and 2021 to cover all years that funds were sub awarded by the Foundation. The new procedure additionally requires noncompliance findings, when reported, to be remediated appropriately. Last, the Foundation?s Director of Finance and Grants Management Policy completed 40 training hours related to Federal post-award requirements and financial administration for pass-through entities in 2022.
2020-003
Finding 2020-001 Programs: All Material Weakness and Noncompliance over Financial Reporting Repeat Finding: N/A Condition: During our audit, it came to our attention that several key accounts (cash, receivables, unearned revenue, payables, etc.) had not been reviewed as of year-end. The Foundation had material post year-end adjustments to present its financial statements in accordance with generally accepted accounting principles. Such adjustments related to errors in revenue recognition and the completeness of liabilities (both material and immaterial) that were undiscovered throughout the fiscal year. Criteria: In accordance with Uniform Guidance, the Foundation must maintain an adequate system of internal controls over financial reporting to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles. Additionally, ? 200.510 requires the auditee to prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. Cause: The Foundation had not been required to prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with ? 200.510 prior to January 1, 2020. The Foundation did not have adequate internal controls over financial reporting in place to ensure the review and analysis of its financial statements on a timely basis. Effect: The delay in completing account analysis for the financial statement accounts could allow for misstatements, errors, and irregularities to go undetected. Also, accurate financial information may not have been available to make management decisions. Questioned Costs: None. Recommendation: We recommend the Foundation develop formal written procedures for the monthly and year-end financial reporting procedures and checklists to assist in the close and preparation of financial statements. Management should develop closing of its books and the preparation of GAAP financial statements timely These policies should ensure reconciliations and other account analyses are completed and reviewed by appropriate supervisory personnel. Finding 2020-001 (continued) Auditee Response and Corrective Action Plan: Refer to management?s corrective action plans. Auditor?s Conclusion: Finding remains as stated.
Finding 2020-001 Programs: All Material Weakness and Noncompliance over Financial Reporting Corrective Action Plan for Material Weakness and Noncompliance over Financial Reporting The Foundation concurs with the finding and the auditor recommendations. Through 2021, the Foundation performed financial reporting procedures that aligned with grantor reporting requirements, and we reconciled/reported results on a cumulative basis through the life of the grant, rather than annually. For 2022 and beyond, the Foundation will incorporate additional procedures to allow for our financial statements to be prepared and presented annually, and on an accrual basis. We are finalizing new/additional reconciliation processes in consultation with the auditors, and these procedures will include a checklist, and monthly, quarterly and year-end reconciliations. Yearend procedures will be fully implemented for 2022 audit testing.
Finding 2020-002 Programs: All Significant Deficiency and Noncompliance over Reporting Repeat Finding: N/A Condition: The Foundation?s audited financial statements and the data collection form were not completed within nine months after the end of the audit period. Criteria: In accordance with 2 CFR ? 200.512, 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. Cause: The Foundation had not been required to prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with ? 200.510 prior to January 1, 2020. Effect: The Foundation could not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We strongly recommend the Foundation develop a formal written procedure to develop monthly and year-end financial reporting procedures and checklists to assist in preparation of financial statements. Auditee Response and Corrective Action Plan: Refer to management?s corrective action plans. Auditor?s Conclusion: Finding remains as stated.
Finding 2020-002 Programs: All Significant Deficiency and Noncompliance over Reporting Corrective Action Plan for Significant Deficiency and Noncompliance over Reporting The Foundation concurs with the finding, and auditor recommendations. For 2022 and beyond, the Foundation will incorporate additional procedures to allow for our financial statements to be prepared and presented annually, and on an accrual basis. We are finalizing new/additional reconciliation processes in consultation with the auditors, these procedures will include a checklist, and monthly, quarterly and year-end reconciliations. Year-end procedures will be fully implemented for 2022 audit testing.
Finding 2020-003 U.S. Department of Agriculture AL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Subrecipient Monitoring Repeat Finding: N/A Condition: Management was unaware of the requirement to perform subrecipient monitoring. Criteria: In accordance with 2 CFR ?200.303, the non-Federal entity must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Pursuant to 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h), a pass-through entity must identify the award and applicable requirements, evaluate risk, monitor, and ensure accountability of subrecipients. Cause: Program personnel were unaware of the requirement included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect: If subrecipient was not in compliance with Uniform Guidance, the Foundation would not identify the noncompliance timely. Questioned Costs: Unknown. Recommendation: We recommend that the Foundation establish and implement controls for the program and prepare and maintain a written plan to monitor its subrecipients. Additionally, we recommend training on the Uniform Guidance requirements related to subrecipient monitoring. Auditee Response and Corrective Action Plan: Refer to management?s corrective action plans. Auditor?s Conclusion: Finding remains as stated.
Finding 2020-003 Programs: Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Subrecipient Monitoring Corrective Action Plan for Significant Deficiency and Noncompliance over Subrecipient Monitoring The Foundation partially concurs with the finding, and fully concurs with the recommendations. Management was unaware of 2 CFR 200.332 (b)(2) which required us to evaluate subrecipients risk of noncompliance through the review of Single Audit reports. The Foundation was aware of 2 CFR 200.332 (d)(1), and we included quarterly progress and financial report requirements into the terms and conditions of our subrecipient award agreements. Monitoring efforts were not always effective however when reports were delinquent, due to staffing constraints. The condition was improved with the addition of new staff, the development of tracking mechanisms, and more effective communication channels for pursuing delinquent reports. To address the 2 CFR 200.332 (b)(2) noncompliance, the Foundation implemented a new procedure in October 2022, to track and review subrecipient Single Audit reports posted to the Federal Audit Clearinghouse. During our review we looked at Single Audit reports from both 2020 and 2021 to cover all years that funds were sub awarded by the Foundation. The new procedure additionally requires noncompliance findings, when reported, to be remediated appropriately. Last, the Foundation?s Director of Finance and Grants Management Policy completed 40 training hours related to Federal post-award requirements and financial administration for pass-through entities in 2022.
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