POVERELLO CENTER, INC.Non-Profit

2024-001 Evaluation of Suspension and Debarment of Vendors – Significant Deficiency Criteria: Federal grant agreements and contracts require policies and procedures are in place to ensure vendors are not suspended or debarred by the Federal government. Condition: During our testing we found that 24 of the 40 transactions had not been properly checked to ensure that the vendor was not suspended nor debarred prior to making payment. Management has since verified that these vendors are not suspended or debarred. Cause: The Organization does not have written policies to provide guidance over these matters but have procedures in place to check vendors for suspension and debarment, but controls were missed for an instance of evaluation and appears to be an oversight. Effects: The Organization could do business with a vendor which has been suspended or debarred resulting in non-compliance with federal awards and subject federal dollars to possible fraud, waste, or abuse. Recommendation: We recommend that management establishes written policy to guide the procedures over the checks and implements a comprehensive plan to ensure that all vendors are checked for suspension/debarment prior to making payment.

2024-002 Approval of Payroll – Significant Deficiency Criteria: Federal grant agreements and contracts require entities to have an approval process in place for expenditure of federal awards to ensure that activities are allowed under federal agreements. Condition: For 1 of the 40 transactions tested we found that the Organization had allowed for a member of management to self-approve payroll expenditure. Cause: Undetermined. Effects: The Organization could allow payroll expenditures that are not due or allowed as the self-review would allow for activities to pass through. Recommendation: We recommend that management implements a comprehensive plan to ensure payroll transactions are not self-approved.

2023-001 INTERNAL CONTROLS OVER PREPARATION OF SCHEDULE OF FEDERAL AWARDS Criteria: The Organization should have proper controls in place over the preparation of the SEFA to ensure accurate reporting of federal awards. Condition: We found that the SEFA prepared by the Organization included expenditures from the prior year. Cause: The Organization’s procedure for evaluating the proper period of SEFA reporting did not detect this error on the SEFA. Effects: The SEFA initially provided to us over reported expenditures, this matter has been corrected in the accompanying SEFA. Recommendation: We recommend the Organization implement procedures to verify proper period for all expenditure of federal funds.

2023-002 INTERNAL CONTROLS OVER ALLOWABLE COST PRINCIPLES Criteria: Federal grant agreements and contracts require entities to have an approval process in place for expenditure of federal awards to ensure that activities are allowed under federal agreements. Condition: For 1 of the 25 transactions tested we found that the Organization had not followed their policy of obtaining authorization from the appropriate level of management. Cause: The Organization does have controls in place to ensure that this compliance is checked on a daily basis, but the control was deficient on various occasions and appears to be an oversight. Effects: The Organization could allow expenditures that are not allowable in the lines of the federal agreement that could produce the Organization being noncompliant with laws and regulations with the agreement and be subject to penalties or withdraw of federal funding status. Recommendation: We recommend that management implements a comprehensive plan to ensure that all transactions receive proper approval after a thorough review of each transaction.

2023-003 INTERNAL CONTROLS OVER COMPLIANCE OF SUSPENSION AND DEBARMENT Criteria: Federal grant agreements and contracts require ensuring vendors are not suspended or debarred by the Federal government. Condition: During our testing we found that 2 of the 25 transactions had not been properly checked to ensure that the vendor was not suspended nor debarred prior to making payment. Management as since verified that these vendors are not suspended or debarred. Cause: The Organization did have procedures in place to check vendors for suspension and debarment, but controls were missed for an instance of evaluation and appears to be an oversight. Effects: The Organization could do business with a vendor which has been suspended or debarred resulting in non-compliance with federal awards and subject federal dollars to possible fraud, waste, or abuse. Recommendation: We recommend that management implements a comprehensive plan to ensure that all vendors are checked for suspension/debarment prior to making payment.

2021-002 INTERNAL CONTROLS OVER PREPARATION OF SCHEDULE OF FEDERAL AWARDS Criteria: The Organization should have proper controls in place over the preparation of the SEFA to ensure accurate reporting of federal awards. Condition: We found that the SEFA prepared by the Organization included expenditures from the prior year. Cause: The Organization?s procedure for evaluating the proper period of SEFA reporting did not detect this error on the SEFA. Effects: The SEFA provided to us reported the incorrect expenditures of federal awards. Recommendation: We recommend the Organization implement procedures to verify proper period for all expenditure of federal funds.

2021-003 INTERNAL CONTROLS OVER SUSPENSION AND DEBARMENT Criteria: Federal grant agreements and contracts require ensuring vendors are not suspended or debarred by the Federal government. Condition: We noted the Organization had not checked with the System for Award Management to determine if any vendors were suspended or debarred. Cause: The Organization did not have procedures in place to check vendors for suspension and debarment. Effects: The Organization could do business with a vendor which has been suspended or debarred resulting in non-compliance with federal awards and subject federal dollars to possible fraud, waste, or abuse. Recommendation: Upon notification of this finding, the Organization has gone through and checked all vendors used during the year ended December 31, 2021 for suspension and debarment using the System for Award Management noting no vendors were suspended or debarred. We recommend the System for Award Management be used to check every new vendor for suspension or debarment before using them for goods or services.