EIN: 232619395
UEI: UZZKQGZKHAG2
Audited by: Bertz, Hess & Co., LLP
Oversight agency: 98 [U.S. Agency for International Development]
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Data as of September 2, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 23, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by December 23, 2025 (255 days ago).
What is a management decision? →The Nazareth Project, Inc. (the "Organization"), applied in August 2024 for reimbursement of expenses incurred under the ASHA grant. The Organization recorded grant revenue and a related grant receivable for the amount incurred during the year ended June 30, 2024, but failed to recognize the matching expense and the related liability in the amount of $741,559. Context: We conducted a search for unrecorded liabilities by examining a sample of The Nazareth Project, Inc.'s cash disbursements subsequent to the end of the fiscal year and investigated whether disbursements for expenses incurred during the fiscal year were included in the the expenses for that year on the Nazareth Project, Inc.'s statement of activities and other changes in net assets. Potential Effect of Condition: There is a risk that the failure to record expenses when incurred will cause the financial statements and the schedule of expenditures of federal awards to be materially misstated. Recommendation: The Organization should record all expenditures presented for reimbursement under a federal grant sorted by the period in which those expenditures are incurred, and verify that grant revenues and expenditures and the related receivables and liabilities all equal the total expenditures incurred for the period. Questioned Costs: None
Show full finding ▾Hide full finding ▴Criteria: Grant expenditures under the American Schools and Hospitals Abroad (ASHA) program are recognized in the period incurred as required under the accrual basis of accounting. Condition: The Nazareth Project, Inc. (the "Organization"), applied in August 2024 for reimbursement of expenses incurred under the ASHA grant. The Organization recorded grant revenue and a related grant receivable for the amount incurred during the year ended June 30, 2024, but failed to recognize the matching expense and the related liability in the amount of $741,559. Context: We conducted a search for unrecorded liabilities by examining a sample of The Nazareth Project, Inc.'s cash disbursements subsequent to the end of the fiscal year and investigated whether disbursements for expenses incurred during the fiscal year were included in the the expenses for that year on the Nazareth Project, Inc.'s statement of activities and other changes in net assets. Potential Effect of Condition: There is a risk that the failure to record expenses when incurred will cause the financial statements and the schedule of expenditures of federal awards to be materially misstated. Recommendation: The Organization should record all expenditures presented for reimbursement under a federal grant sorted by the period in which those expenditures are incurred, and verify that grant revenues and expenditures and the related receivables and liabilities all equal the total expenditures incurred for the period. Questioned Costs: None
Management's Response and Corrective Action Plan: On July 8, 2024, NPI received a reimbursement from ASHA of $741,559 for invoices that NPI received from Nazareth Hospital prior to June 30, 2024. NPI submitted these invoices for reimbursement on June 29, 2024, and recorded the revenue and the receivable, but did not record the expense until the funds were remitted to Nazareth Hospital on July 9, 2024. NPI should have recorded the expense and accrued a liability on June 29, 2024, during the same period in which the revenue was recognized. We acknowledge our failure to properly match the grant expense to the grant revenue in the proper accounting period and affirm that our cash basis of accounting was not appropriate to account for this grant. We have implemented a process to reconcile all grant revenues and expenses at the end of each accounting period to ensure proper recording. Further, the Treasurer of the Organization will take a more active role in reviewing the accounting for grants.
The Organization received a grant reimbursement on September 15, 2023, but remitted those funds to the subrecipient on September 26, 2023. Cause of Condition: The Organization's Executive Director was not monitoring the bank account where the Organization receives its federal award funds because he expected a longer lag time between application for reimbursement and receipt of the funds. Potential Effect of Condition: Noncompliance with the Cash Management requirements of the program. Recommendation: The Organization should monitor its bank account daily after application for reimbursement under the federal award program until funds are received to ensure timely remittance. Questioned Costs: None
Show full finding ▾Hide full finding ▴Criteria: Grant funds reimbursed to The Nazareth Project, Inc. (the "Organization") under the Foreign Assistance to American Schools and Hospitals Abroad program are remitted to the Nazareth Hospital (the subrecipient) within two business days. Condition: The Organization received a grant reimbursement on September 15, 2023, but remitted those funds to the subrecipient on September 26, 2023. Cause of Condition: The Organization's Executive Director was not monitoring the bank account where the Organization receives its federal award funds because he expected a longer lag time between application for reimbursement and receipt of the funds. Potential Effect of Condition: Noncompliance with the Cash Management requirements of the program. Recommendation: The Organization should monitor its bank account daily after application for reimbursement under the federal award program until funds are received to ensure timely remittance. Questioned Costs: None
Management's Response and Corrective Action Plan: In past experience with USAID reimbursement requests, payment was received 10-14 days after the request for reimbursement was submitted to the office of CFO.CMP Electronic Invoices (USAID). For example, on October 11, 2022, we submitted a request for $308,942.22. Payment was received on October 28, 2022 – 17 days after the request for reimbursement. In the specific case of reimbursement received on September 15, 2023, NPI submitted the request for reimbursement on September 13. In this specific case reimbursement was received within only two days. We acknowledge our failure to remit grant funds to the Nazareth Hospital on a timely basis. For future grant reimbursement requests, we have implemented a plan to be more diligent in monitoring the receipt of grant reimbursements to ensure that we can immediately disburse them to the recipient.
FAC accepted this audit on August 1, 2023 — management decision was due February 1, 2024.
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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