TENNESSEE OPPORTUNITY PROGRAMS, INC.

2024-003 Grant Expenditures (Repeat Prior Year Audit Finding 2023-003; Originally Reported as Finding 2020-005) Criteria: Expenditures used to support grant reimbursement requests should agree with amounts recorded in the general ledger accounting system. Condition and Context: In our testing, we noted that the total expenditures recorded in the general ledger accounting system by grant program did not agree in total to the spreadsheets used to support grant reimbursement requests. Cause: Staff use spreadsheets outside of the general ledger accounting system to track expenditures and make grant reimbursement requests. During the June 30, 2024 fiscal year, staff utilized the accounting system to better track grant revenues and expenditures by grant program. However, the breakdown of expenditures used on these spreadsheets did not always match the breakdown used when the expenditures were posted in the general ledger accounting system. Effect or Potential Effect: Expenditures could be duplicated, or eligible expenditures could be omitted from grant reimbursement requests. Recommendation: The coding of expenditures in the general ledger accounting system should reflect the amounts requested under each grant. Additionally, reconciliations should be performed regularly to ensure expenditures are not duplicated or eligible expenditures are not omitted from grant reimbursement requests. Responsible Official's Response: Processes have been put into place to make sure that variances do not occur. Any questions with allowable costs have been referenced in 2 CFR 200 subpart E used for a common procedure for all expenses. The executive director and office manager will review expenditures prior to the distribution of office expenses from among the funds, which will ensure accuracy before the request is made. This will also eliminate the number of entries which need to be adjusted in the expenses. Steps have been implemented since the finding last year to eliminate variances by the review of the Executive Director and Office Manager of expenditure requests, prior to the funding drawdowns.

2024-005 Schedule of Expenditures of Federal Awards (Repeat Partially Resolved Prior Year Audit Finding 2023-004; Originally Reported as Finding 2020-006) Criteria: The information in the Schedule of Expenditures of Federal Awards (SEFA) should be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Condition and Context: The grant expenditures on the SEFA were not reconciled to the general ledger accounting system or other records used to prepare the financial statements. Cause: Revenue accounts and internal funds by grant program have been created for each reimbursement grant program. However, grant receivables were not recorded and revenue accounts for each reimbursement grant program were not reconciled to the underlying expenditures in the accounting and other records used to prepare the financial statements and SEFA. Effect or Potential Effect: The SEFA could be materially misstated if grant expenditures reported on the SEFA are not reconciled to the underlying accounting and other records used to prepare the financial statements. Recommendation: Reimbursement grant revenue accounts should be reconciled to the underlying grant expenditures on the grant request and other reports on a timely basis. Responsible Official's Response: Frequent reconciliations, along with implementation of policy and procedures, has allowed data to be accurate in the accounting system while matching data information on government reports since the finding from prior year. The organizational staff has adequately added and maintained information in the accounting software as requested from previous finding on prior year, which should meet OMB requirements.

2023-003 Grant Expenditures (Repeat Prior Year Audit Finding 2022-004; Originally Reported as Finding 2020-005) Criteria: Expenditures used to support grant reimbursement requests should agree with amounts recorded in the general ledger accounting system. Condition and Context: In our testing, we noted that the total expenditures recorded in the general ledger accounting system by grant program did not agree in total to the spreadsheets used to support grant reimbursement requests. Cause: Staff use spreadsheets outside of the general ledger accounting system to track expenditures and make grant reimbursement requests. During the June 30, 2023 fiscal year, staff utilized the accounting system to better track grant revenues and expenditures by grant program. However, the breakdown of expenditures used on these spreadsheets did not always match the breakdown used when the expenditures were posted in the general ledger accounting system. Effect or Potential Effect: Expenditures could be duplicated, or eligible expenditures could be omitted from grant reimbursement requests. Recommendation: The coding of expenditures in the general ledger accounting system should reflect the amounts requested under each grant. Additionally, reconciliations should be performed regularly to ensure expenditures are not duplicated or eligible expenditures are not omitted from grant reimbursement requests. Responsible Official's Response: Processes have been put into place to make sure that variances do not occur. Any questions with allowable costs have been referenced in 2 CFR 200 subpart E used for a common procedure for all expenses. The executive director and office manager will review expenditures prior to the distribution of office expenses from among the funds, which will ensure accuracy before the request is made. This will also eliminate the number of entries which need to be adjusted in the expenses. Steps have been implemented since the finding last year to eliminate variances by the review of the Executive Director and Office Manager of expenditure requests, prior to the funding drawdowns.

2023-004 Schedule of Expenditures of Federal Awards (Repeat Partially Resolved Prior Year Audit Finding 2022-005; Originally Reported as Finding 2020-006) Criteria: The information in the Schedule of Expenditures of Federal Awards (SEFA) should be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Condition and Context: The grant expenditures on the SEFA were not reconciled to the general ledger accounting system or other records used to prepare the financial statements. Cause: Revenue accounts and internal funds by grant program have been created for each reimbursement grant program. However, grant receivables were not recorded and revenue accounts for each reimbursement grant program were not reconciled to the underlying expenditures in the accounting and other records used to prepare the financial statements and SEFA. Effect or Potential Effect: The SEFA could be materially misstated if grant expenditures reported on the SEFA are not reconciled to the underlying accounting and other records used to prepare the financial statements. Recommendation: Reimbursement grant revenue accounts should be reconciled to the underlying grant expenditures on the grant request and other reports on a timely basis. Responsible Official's Response: Frequent reconciliations, along with implementation of policy and procedures, has allowed data to be accurate in the accounting system while matching data information on government reports since the finding from prior year. The organizational staff has adequately added and maintained information in the accounting software as requested from previous finding on prior year, which should meet OMB requirements.

Criteria: Expenditures used to support grant reimbursement requests should agree with amounts recorded in the general ledger accounting system. Condition and Context: In our testing of expenditures, we noted eleven expenditures selected from the general ledger accounting system by activity that did not agree to the spreadsheets used to support grant reimbursement requests. Cause: Staff use spreadsheets outside of the general ledger accounting system to track expenditures and make grant reimbursement requests. During the June 30, 2022 fiscal year, staff utilized the accounting system to better track grant revenues and expenditures by grant program. However, the breakdown of expenditures used on these spreadsheets did not always match the breakdown used when the expenditures were posted in the general ledger accounting system. Effect or Potential Effect: Expenditures could be duplicated, or eligible expenditures could be omitted from grant reimbursement requests. Recommendation: The coding of expenditures in the general ledger accounting system should reflect the amounts requested under each grant. Additionally, reconciliations should be performed regularly to ensure expenditures are not duplicated or eligible expenditures are not omitted from grant reimbursement requests. Responsible Official's Response: Processes have been put into place to make sure that variances do not occur. Any questions with allowable costs have been referenced in 2 CFR 200 subpart E used for a common procedure for all expenses. The executive director and office manager will review expenditures prior to the distribution of office expenses from among the funds, which will ensure accuracy before the request is made. This will also eliminate the number of correcting entries which need to be adjusted in the expenses.

Criteria: The information in the Schedule of Expenditures of Federal Awards (SEFA) should be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Condition and Context: The grant expenditures on the SEFA were not reconciled to the general ledger accounting system or other records used to prepare the financial statements. Cause: Revenue accounts were created for each reimbursement grant program beginning October 1, 2020. However, grant receivables were not recorded and revenue accounts for each reimbursement grant program were not reconciled to the underlying expenditures in the accounting and other records used to prepare the financial statements and SEFA. Effect or Potential Effect: The SEFA could be materially misstated if grant expenditures reported on the SEFA are not reconciled to the underlying accounting and other records used to prepare the financial statements. Recommendation: Reimbursement grant revenue accounts should be reconciled to the underlying grant expenditures on the grant request and other reports on a timely basis. Responsible Official's Response: Prior to July 1, 2019, Organization staff did not adequately set up or maintain the accounting software being used. During the year new staff added multiple accounts to ensure that the data in the system matched data showing on government reports. Frequent reconciliations and implementation of policies and procedures will allow data to be accurate in the system and match data that has been submitted to the government from worksheets done in the past.

Criteria: Expenditures used to support grant reimbursement requests should agree with amounts recorded in the general ledger accounting system. Condition and Context: In our testing of expenditures, we noted that the expenditures by grant activity on schedules used to support grant reimbursement requests did not always agree with amounts recorded in the general ledger accounting system by activity. Cause: The general ledger accounting system was not utilized in the June 30, 2019 fiscal year. A staff member was hired in the June 30, 2020 fiscal year and had to develop new methods to document grant reimbursement requests. The staff member developed spreadsheets outside of the general ledger accounting system to track expenditures and make grant reimbursement requests. During the June 30, 2021 fiscal year, staff utilized the accounting system to better track grant revenues and expenditures. However, the breakdown of expenditures used on these spreadsheets did not always match the breakdown used when the expenditures were posted in the general ledger accounting system. Effect or Potential Effect: Expenditures could be duplicated, or eligible expenditures could be omitted from grant reimbursement requests. Recommendation: The coding of expenditures in the general ledger accounting system should reflect the amounts requested under each grant. Additionally, reconciliations should be performed regularly to ensure expenditures are not duplicated or eligible expenditures are not omitted from grant reimbursement requests. Responsible Official's Response: Processes have been put into place to make sure that variances do not occur. Any questions with allowable costs have been referenced in 2 CFR 200 subpart E used for a common procedure for all expenses. The executive director and office manager will review expenditures prior to the distribution of office expenses from among the funds, which will ensure accuracy before the request is made. This will also eliminate the number of correcting entries which need to be adjusted in the expenses.

Criteria: The information in the Schedule of Expenditures of Federal Awards (SEFA) should be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Condition and Context: The grant expenditures on the SEFA were not reconciled to the general ledger accounting system or other records used to prepare the financial statements. Cause: For the first quarter of fiscal year June 30, 2021, all grant revenue was recorded in one account in the general ledger accounting system without identification as to which specific grant the revenues related to within the general ledger itself or in other supporting information. Separate revenue accounts were created for grants beginning October 1, 2020. However, grant receivables were not recorded and revenue accounts were not reconciled to the underlying accounting and other records used to prepare the financial statements. Effect or Potential Effect: The SEFA could be materially misstated if grant expenditures reported on the SEFA are not reconciled to the underlying accounting and other records used to prepare the financial statements. Recommendation: Grant income accounts should be reconciled with grant request and other reports on a timely basis. Responsible Official's Response: Prior to July 1, 2019, Organization staff did not adequately set up or maintain the accounting software being used. During the year new staff added multiple accounts to ensure that the data in the system matched data showing on government reports. Frequent reconciliations and implementation of policies and procedures will allow data to be accurate in the system and match data that has been submitted to the government from worksheets done in the past.

Criteria: Expenditures used to support grant reimbursement requests should agree with amounts recorded in the general ledger accounting system. Condition and Context: In our testing of expenditures, we noted that the expenditures by grant activity on schedules used to support grant reimbursement requests did not always agree with amounts recorded in the general ledger accounting system by activity. Cause: The general ledger accounting system was not utilized in the prior year. A staff member was hired in the current fiscal year and had to develop new methods to document grant reimbursement requests. The staff member developed spreadsheets outside of the general ledger accounting system to track expenditures and make grant reimbursement requests. However, the breakdown of expenditures used on these spreadsheets did not always match the breakdown used when the expenditures were posted in the general ledger accounting system. Effect or Potential Effect: Expenditures could be duplicated, or eligible expenditures could be omitted from grant reimbursement requests. Recommendation: The coding of expenditures in the general ledger accounting system should reflect the amounts requested under each grant. Additionally, reconciliations should be performed regularly to ensure expenditures are not duplicated or eligible expenditures are not omitted from grant reimbursement requests. Responsible Official's Response: Incoming staff created worksheets to track expenses but some of the expenses listed in the general ledger did not match expenses listed on the worksheets. Processes have been put into place to make sure that variances do not occur. The Executive Director is required to review, approve and authorize a request for reimbursement of funds in advance of the reimbursement. Any discrepancy or variance is discussed before the reimbursement is received. This will ensure that distribution of expenses among the funds is consistent and accurate before the request is made. It will also eliminate the number of correcting entries that need to be made to adjust the expense. Expenses must also be recorded in the accounting system on a regular basis. If there is a question about allowable costs, 2 CFR 200 Subpart E is used to reference procedures for the expense.

Criteria: The information in the Schedule of Expenditures of Federal Awards (SEFA) should be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Condition and Context: The grant expenditures on the SEFA were not supported or reconciled to the general ledger accounting system or other records used to prepare the financial statements. Cause: All grant revenue was recorded in one account in the general ledger accounting system without identification as to which specific grant the revenues related to within the general ledger itself or in other supporting information. Effect or Potential Effect: The SEFA could be materially misstated if grant expenditures reported on the SEFA are not reconciled to the underlying accounting and other records used to prepare the financial statements. Recommendation: Grant income should be segregated by specific grant either within the general ledger accounting system or within a subsidiary ledger. These accounts should be reconciled with grant request and other reports on a timely basis. Responsible Official's Response: Prior to July 1, 2019, Organization staff did not adequately set up or maintain the accounting software being used. During the year new staff added multiple accounts to ensure that the data in the system matched data showing on government reports. Frequent reconciliations and implementation of policies and procedures will allow data to be accurate in the system and match data that has been submitted to the government form worksheets done in the past.

Criteria: The Uniform Guidance requires entities that expend federal grant funds to have written policies for determining allowability of costs and procurement procedures. Condition and Context: The Organization did not have written procedures for determining allowability of costs, in accordance with 2 CFR 200 Subpart E ? Cost Principles. Additionally, the Organization?s procurement policies and procedures do not conform to the procurement standards found at 2 CFR 200.318-326. Cause: The Organization?s financial management system does not meet the requirements prescribed at 2 CFR 200.302 and 2 CFR 200.318-326. Effect or Potential Effect: Without written policies regarding allowability of costs and procurement, employees do not have a documented system of controls to follow for federal grant expenditures. Recommendation: The Organization should develop written procedures for determining allowability of costs, in accordance with 2 CFR 200 Subpart D ? Post Federal Award Requirements and Subpart E ? Cost Principles. Responsible Official's Response: The Organization currently abides by 2 CFR 200 Subpart E as a reference in determining allowability of costs and procurement procedures. The Organization has created a written set of procedures for procurement to include a purchase order system, multiple authorizations and signatory approvals by management and supervisors. There must be a purchase order, an invoice, any associated documents such as bill of lading or shipping receipts and appropriate approvals and signatures for any purchases that are made.