Caring People AllainceNon-Profit

Finding No. 2024-001 – Inability to provide certain records to support eligibility ALN(s) 10.561; 93.596; 93.575; 93.667; 93.558 Condition The Organization was unable to provide sufficient documentation for one of the audit selections to support eligibility. Criteria The Organization must maintain complete and accurate records. Cause Due to Early Learning Resource Center Region 18 (“ELRC”) program contract expiration as of June 30, 2024, and transitioning of all the files and records to the new provider, and no longer having access to the state-run PELICAN system, the Organization was not able to provide supporting documentation for one of the audit selections. Effect Caring People Alliance was unable to provide sufficient documentation to support eligibility for one of the audit selections, in order to satisfy that the eligibility requirements were met due to access restrictions at the time contract was given to a subsequent provider as support was only in electronic form although all information was accessible by the award provider. Questioned Costs None. Identification as a Repeat Finding None. Recommendation None. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding No. 2022-001 - Account Reconciliations - Material Weakness in Internal Control Over Financial Reporting Condition Certain asset and liability accounts were not reconciled throughout the year and at year end on a timely basis. This matter was reported as finding #2021-001 in the prior year and is repeated again as the issue continued into fiscal year 2022, while the Organization developed and implemented new processes and procedures to correct the issue. Criteria Internal control over financial management requires that all financial accounts be reviewed and reconciled on a timely basis. Cause Turnover in the finance department and mid-year conversion to the new accounting system led to delays in reconciling all accounts in a timely manner throughout and end of the year. Effect Caring People Alliance was unable to timely produce financial statements and account reconciliations necessary for the audit. Questioned Costs None. Identification as a Repeat Finding Yes, this is a repeat finding, see prior year finding #2021-001. Recommendation As part of the Organization?s internal controls over the financial reporting process, we recommend that all general ledger accounts be reconciled timely on a monthly basis. A monthly financial close checklist should be utilized to identify and track all general ledger account reconciliations. This should reduce the occurrence of unreconciled general ledger accounts and activity that may result in a material misstatement of the financial statements. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding No. 2022-002 Internal Control over Preparation of Schedule of Expenditures of Federal, State, and City Awards (?SEFA?) - Material Weakness in Internal Control over Compliance Condition During procedures performed for reconciliation of the information presented on the Schedule of Expenditures of Federal, State, and City Awards (SEFA) to the underlying records used to prepare the SEFA such as the general ledger, reimbursement requests and grant agreements, auditor noted the following: ? SEFA was not prepared timely, which was the result of the financial statement finding #2022-001. ? Refundable advances and receivables were not properly reflected on SEFA. This matter was reported as finding #2021-002 in the prior year and is repeated again as the issue continued into fiscal year 2022, while the Organization developed and implemented new processes and procedures to correct the issue. Criteria Uniform Guidance, Commonwealth of Pennsylvania Department of Human Services and City of Philadelphia Subrecipient Audit Guides prescribe the required Schedule of Expenditures of Federal, State, and City Awards contents and delineates how or what is deemed to be expenditures for purposes of completing the SEFA. Cause Turnover in the finance department and mid-year conversion to the new accounting system led to delays in the preparation and review of information on the SEFA prior to submittal of the schedule to the auditor. Effect Inaccurate information on the SEFA may lead to improper selection of major programs, incorrect reporting on the Data Collection Form submitted to the Federal Single Audit Clearinghouse, as well as incorrect information submitted to grantor agencies. Questioned Costs None. Identification as a Repeat Finding Yes, this is a repeat finding, see prior year finding #2021-002. Recommendation To ensure adequate internal controls over the preparation of the Schedule of Expenditures of Federal, State, and City Awards, we recommend that the Organization implement financial controls and procedures to ensure that information reported on the Schedule of Expenditures of Federal, State, and City Awards is accurate, complete, agrees to underlying records and is prepared in accordance with Uniform Guidance, Commonwealth of Pennsylvania Department of Human Services and City of Philadelphia Subrecipient Audit Guides, and in a timely manner. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding No. 2021-001 - Account Reconciliations - Material Weakness in Internal Control Over Financial Reporting Condition Certain asset and liability accounts were not reconciled throughout the year and at year end on a timely basis. This matter was reported as finding #2020-001 in the prior year and is repeated again as the issue continued into the fiscal year 2021, while the Organization developed and implemented new processes and procedures to correct the issue. Criteria Internal control over financial management requires that all financial accounts be reviewed and reconciled on a timely basis. Cause Key staff turnover in the finance department and issues related to the COVID-19 pandemic led to delays in reconciling all accounts in a timely manner throughout and end of the year. Effect Caring People Alliance was unable to timely produce financial statements and account reconciliations necessary for the audit. Additionally, financial reports prepared and reviewed by the Board and management on a monthly basis throughout the year were not timely and often inaccurate. Questioned Costs None. Identification as a Repeat Finding Yes, this is a repeat finding, see prior year finding #2020-001. Recommendation As part of the Organization?s internal controls over the financial reporting process, we recommend that all general ledger accounts be reconciled timely on a monthly basis. A monthly financial close checklist should be utilized to identify and track all general ledger account reconciliations. This should reduce the occurrence of unreconciled general ledger accounts and activity that may result in a material misstatement of the financial statements. We further recommend that the Organization develop contingency plans to mitigate significant disruptions in operations caused by key staff turnover. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding No. 2021-002 Internal Control over Preparation of Schedule of Expenditures of Federal, State, and City Awards (?SEFA?) - Material Weakness in Internal Control over Compliance Condition During procedures performed for reconciliation of the information presented on the Schedule of Expenditures of Federal, State, and City Awards (SEFA) to the underlying records used to prepare the SEFA such as the general ledger, reimbursement requests and grant agreements, auditor noted the following: ? CARES Act refundable advance was not properly reflected on SEFA. ? SEFA was not prepared timely, which was the result of the financial statement finding #2021-001. This matter was reported as finding #2020-002 in the prior year and is repeated again as the issue continued into the fiscal year 2021, while the Organization developed and implemented new processes and procedures to correct the issue. Criteria Uniform Guidance, Commonwealth of Pennsylvania Department of Human Services and City of Philadelphia Subrecipient Audit Guides prescribe the required Schedule of Expenditures of Federal, State, and City Awards contents and delineates how or what is deemed to be expenditures for purposes of completing the SEFA. Cause Key staff turnover in the finance department and issues related to the COVID-19 pandemic led to delays in the preparation and review of information on the SEFA prior to submittal of the schedule to the auditor. Effect Inaccurate information on the SEFA may lead to improper selection of major programs, incorrect reporting on the Data Collection Form submitted to the Federal Single Audit Clearinghouse, as well as incorrect information submitted to grantor agencies. Questioned Costs None. Identification as a Repeat Finding Yes, this is a repeat finding, see prior year finding #2020-002. Recommendation To ensure adequate internal controls over the preparation of the Schedule of Expenditures of Federal, State, and City Awards, we recommend that the Organization implement financial controls and procedures to ensure that information reported on the Schedule of Expenditures of Federal, State, and City Awards is accurate, complete, agrees to underlying records and is prepared in accordance with Uniform Guidance, Commonwealth of Pennsylvania Department of Human Services and City of Philadelphia Subrecipient Audit Guides, and in a timely manner. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding No. 2020-001 - Account Reconciliations - Material Weakness in Internal Control Over Financial Reporting Condition Certain asset and liability general accounts were not reconciled on a monthly basis throughout the year and at year-end on a timely basis. Criteria Good financial management requires that all accounts on the statement of financial position be reviewed and reconciled on a monthly basis and at year-end on a timely basis. Cause Key staff turnover in the finance department and issues related to the COVID-19 pandemic led to delays in reconciling all accounts in a timely manner throughout and end of the year. Effect The Organization was unable to timely produce financial statements and account reconciliations needed to commence the audit. Additionally, financial reports prepared and reviewed by the Board and management on a monthly basis throughout the year were not timely and often inaccurate and did not have the proper approval process on recorded journal entries. Questioned Costs None. Recommendation As part of the Organization?s internal controls over the financial reporting process, we recommend that all general ledger accounts be reconciled timely on a monthly basis, and to implement a formal review process over journal entries posted to the general ledger. A monthly financial close checklist should be utilized to identify and track all general ledger account reconciliations. This should reduce the occurrence of unreconciled general accounts and activity that may result in a material misstatement of the financial statements. We further recommend that the Organization develop contingency plans to mitigate significant disruptions in operations caused by key staff turnover. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding No. 2020-002 Internal Control over Preparation of Schedule of Expenditures of Federal, State, and City Awards (?SEFA?) - Material Weakness in Internal Control over Compliance Condition During procedures performed for reconciliation of the information presented on the Schedule of Expenditures of Federal, State, and City Awards (SEFA) to the underlying records used to prepare the SEFA such as the general ledger, reimbursement requests and grant agreements, auditor noted the following: ? CARES Act awards were not properly identified for COVID-19 funding. ? A federal grant program Preschool Development Grant was not properly included in the SEFA due to the improper classification as a state funded program. ? SEFA was not prepared timely, which was the result of the financial statement finding 2020-001. Criteria Uniform Guidance, the Commonwealth of Pennsylvania Department of Human Services and City of Philadelphia Subrecipient Audit Guides prescribe the required Schedule of Expenditures of Federal, State, and City Awards contents and delineates how or what is deemed to be expenditures for purposes of completing the SEFA. Cause Key staff turnover in the finance department and issues related to the COVID-19 pandemic led to delays in the preparation and review of information on the SEFA prior to submittal of the schedule to the auditor. Effect The effect of inaccurate information on the SEFA can lead to improper selection of major programs, incorrect reporting on the Data Collection Form submitted to the Federal Single Audit Clearinghouse, as well as incorrect information submitted to grantor agencies. Questioned Costs None. Recommendation To ensure adequate internal controls over the preparation of the Schedule of Expenditures of Federal, State, and City Awards, we recommend that the Organization implement financial controls and procedures to ensure that information reported on the Schedule of Expenditures of Federal, State, and City Awards is accurate, complete, agrees to underlying records and is prepared in accordance with Uniform Guidance, the Commonwealth of Pennsylvania Department of Human Services and City of Philadelphia Subrecipient Audit Guides, and in a timely manner. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.