THE COMMUNITY COORDINATED CHILD CARE (4C'S) COMMITTEE FOR JOHNSON COUNTYNon-Profit

Significant Deficiency in Internal Control Over Financial Reporting and Significant Deficiency in Internal Control Over Compliance: Auditing Finding 2024-002 - Transactions Recorded from Bank Statement Criteria: Transactions should be recorded in the accounting system based on the dates they occur. Condition: The Organization works with an outsourced provider to maintain its accounting system and record transactions. We noted a number of transactions were recorded from the bank statement with some inconsistencies in dates and classification. Some of these inconsistencies were present in documentation reviewed during testing of the major program. Cause: Internal controls are not designed to ensure recorded transactions are accurately entered into the accounting system and correctly classified. No formal review of the entries made occurs, besides high-level review by the Executive Director and Board of Directors in scheduled meetings. Effect: Misstatements could occur and not be detected. Recommendation: We suggest the Organization implement a more detailed review of recorded transactions and the reports generated at month-end to ensure accuracy, completeness, and proper classification of transactions. Views of responsible officials: Management agrees with the finding. Procedures will be discussed to provide information to third-party accountant to reconcile transactions based on source documentation instead of recording from the bank statement, and management will perform a more detailed review on recorded transaction.

Noncompliance/Material Weakness in Internal Control Over Compliance Auditing Finding 2024-003 - Preparation of Schedule of Expenditures of Federal Awards Criteria: The Organization should have procedures in place to prepare an accurate Schedule of Expenditures of Federal Awards, capturing proper amounts of expenditures during the year, and reporting the correct CFDA catalog numbers. Condition: As discussed in Finding 2024-001, material audit adjustments were necessary to report the correct federal expenditures, and federal award program information was not available from management at the time of the audit. Management reviewed and took responsibility for the Schedule after the adjustments had been made. Cause: Internal controls are not designed to facilitate an accurate and complete presentation of the Schedule of Expenditures of Federal Awards. Effect: Adjustments were necessary to report the Schedule of Expenditures of Federal Awards on an accrual basis and in compliance with the Uniform Guidance. Questioned Costs: $0 Recommendation: We suggest the Organization evaluate its procedures for accumulating its federal awards and reconcile on an accrual basis to properly determine whether Single Audit thresholds are met, and whether the Schedule is prepared in accordance with the requirements of the Uniform Guidance. Views of responsible officials: Management agrees with the finding. An accrual basis Schedule of Expenditures of Federal Awards will be prepared in the future as part of year-end close procedures.

Noncompliance/Material Weakness in Internal Control Over Compliance Auditing Finding 2024-004 – Late Audit Reporting Identification of the federal program: All federal funds included on the Schedule of Expenditures of Federal Awards Criteria: Under 2 CFR Part 200.512, the Uniform Guidance requires that audits are submitted by the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: The Organization did not complete and submit their audit for the year ended June 30, 2024 to the federal clearing house until after the March 31, 2025 deadline. Cause: Delays stemming from limitations on staffing and availability of information pertaining to the schedule of federal expenditures required audit procedures and ultimate completion date to extend beyond the regulatory deadline. Effect or potential effect: The late filing could potentially impact future funding from government agencies. Questioned costs: None Context: The June 30, 2024 single audit reporting package was filed late with the Federal Audit Clearinghouse. Recommendation: We recommend management implement processes and controls that will ensure future audits are completed and submitted timely. View of responsible officials and planned corrective actions: Management agrees with the finding. See attached letter.

Significant Deficiency in Internal Control Over Financial Reporting and Significant Deficiency in Internal Control Over Compliance: Auditing Finding 2023-002 - Transactions Recorded from Bank Statement Criteria: Transactions should be recorded in the accounting system based on the dates they occur. Condition: The Organization works with an outsourced provider to maintain its accounting system and record transactions. We noted a number of transactions were recorded from the bank statement with some inconsistencies in dates and classification. Some of these inconsistencies were present in documentation reviewed during testing of the major program. Cause: Internal controls are not designed to ensure recorded transactions are accurately entered into the accounting system and correctly classified. No formal review of the entries made occurs, besides high-level review by the Executive Director and Board of Directors in scheduled meetings. Effect: Misstatements could occur and not be detected. Recommendation: We suggest the Organization implement a more detailed review of recorded transactions and the reports generated at month-end to ensure accuracy, completeness, and proper classification of transactions. Views of responsible officials: Management agrees with the finding. Procedures will be discussed to provide information to third-party accountant to reconcile transactions based on source documentation instead of recording from the bank statement, and management will perform a more detailed review on recorded transaction.

Noncompliance/Material Weakness in Internal Control Over Compliance Auditing Finding 2023-003 - Preparation of Schedule of Expenditures of Federal Awards Criteria: The Organization should have procedures in place to prepare an accurate Schedule of Expenditures of Federal Awards, capturing proper amounts of expenditures during the year, and reporting the correct CFDA catalog numbers. Condition: As discussed in Finding 2023-001, material audit adjustments were necessary to report the correct federal expenditures, and federal award program information was not available from management at the time of the audit. Management reviewed and took responsibility for the Schedule after the adjustments had been made. Cause: Internal controls are not designed to facilitate an accurate and complete presentation of the Schedule of Expenditures of Federal Awards. Effect: Adjustments were necessary to report the Schedule of Expenditures of Federal Awards on an accrual basis and in compliance with the Uniform Guidance. Questioned Costs: $0 Recommendation: We suggest the Organization evaluate its procedures for accumulating its federal awards and reconcile on an accrual basis to properly determine whether Single Audit thresholds are met, and whether the Schedule is prepared in accordance with the requirements of the Uniform Guidance. Views of responsible officials: Management agrees with the finding. An accrual basis Schedule of Expenditures of Federal Awards will be prepared in the future as part of year-end close procedures.

Noncompliance/Material Weakness in Internal Control Over Compliance Auditing Finding 2023-004 – Late Audit Reporting Identification of the federal program: All federal funds included on the Schedule of Expenditures of Federal Awards Criteria: Under 45 CFR Part 75.512, the Uniform Guidance requires that audits are submitted by the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: The Organization did not complete and submit their audit for the year ended June 30, 2023 to the federal clearing house until after the March 31, 2024 deadline. Cause: Delays stemming from limitations on staffing and availability of information pertaining to the schedule of federal expenditures required audit procedures and ultimate completion date to extend beyond the regulatory deadline. Effect or potential effect: The late filing could potentially impact future funding from government agencies. Questioned costs: None Context: The June 30, 2023 single audit reporting package was filed late with the Federal Audit Clearinghouse. Recommendation: We recommend management implement processes and controls that will ensure future audits are completed and submitted timely. View of responsible officials and planned corrective actions: Management agrees with the finding. See attached letter.

Significant Deficiency in Internal Control Over Financial Reporting and Significant Deficiency in Internal Control Over Compliance: Auditing Finding 2022-002 - Transactions Recorded from Bank Statement Criteria: Transactions should be recorded in the accounting system based on the dates they occur. Condition: The Organization works with an outsourced provider to maintain its accounting system and record transactions. We noted a number of transactions were recorded from the bank statement with some inconsistencies in dates and classification. Some of these inconsistencies were present in documentation reviewed during testing of the major program. Cause: Internal controls are not designed to ensure recorded transactions are accurately entered into the accounting system and correctly classified. No formal review of the entries made occurs, besides high-level review by the Executive Director and Board of Directors in scheduled meetings. Effect: Misstatements could occur and not be detected. Recommendation: We suggest the Organization implement a more detailed review of recorded transactions and the reports generated at month-end to ensure accuracy, completeness, and proper classification of transactions. Views of responsible officials: Management agrees with the finding. Procedures will be discussed to provide information to third-party accountant to reconcile transactions based on source documentation instead of recording from the bank statement, and management will perform a more detailed review on recorded transaction.

Material Weakness in Internal Control Over Compliance Auditing Finding 2022-003 - Preparation of Schedule of Expenditures of Federal Awards Criteria: The Organization should have procedures in place to prepare an accurate Schedule of Expenditures of Federal Awards, capturing proper amounts of expenditures during the year, and reporting the correct CFDA catalog numbers. Condition: As discussed in Finding 2022-001, material audit adjustments were necessary to report the correct federal expenditures, and federal award program information was not available from management at the time of the audit. Management reviewed and took responsibility for the Schedule after the adjustments had been made. Cause: Internal controls are not designed to facilitate an accurate and complete presentation of the Schedule of Expenditures of Federal Awards. Effect: Adjustments were necessary to report the Schedule of Expenditures of Federal Awards on an accrual basis and in compliance with the Uniform Guidance. Questioned Costs: $0 Recommendation: We suggest the Organization evaluate its procedures for accumulating its federal awards and reconcile on an accrual basis to properly determine whether Single Audit thresholds are met, and whether the Schedule is prepared in accordance with the requirements of the Uniform Guidance. Views of responsible officials: Management agrees with the finding. An accrual basis Schedule of Expenditures of Federal Awards will be prepared in the future as part of year-end close procedures.