Elle FoundationNon-Profit

CRITERIA: Federal regulations require the grant recipient to maintain appropriate records and source documentation to support all costs paid with federal grant funding, to ensure adequate. CONDITION: We examined a sample of 30 grant expenditures for the SSVF grant program and noted that 12 transactions totaling $38,840 were incurred that did not have proper supporting documentation. We also noted the transactions were not accurately recorded to the proper grant accounts. CAUSE: The Foundation's record retention administrative procedures were not adequate. EFFECT: We were unable to determine if the grant costs totaling $38,840 were allowable costs for the SSVF grant program. QUESTIONED COSTS: $38,840 RECOMMENDATION: We recommend that management implement proper record retention procedures to assure all grant expenditures are supported by adequate documentation. MANAGEMENT'S RESPONSE: See management's corrective action plan on pages 31-32.

FINDING# 2021-004 – TIMELY SUBMISSION OF FEDERAL AUDIT CLEARINGHOUSE FILING (NONCOMPLIANCE) Title and Assistance Listing Number of Federal Program: 64.033 – VA Supportive Services for Veteran Families Program (SSVF) Federal Award Identification Number: 20-LA-207 Name of Federal Agency: U.S. Department of Veterans Affairs CRITERIA: 2 CFR requires that non-federal entities that expend $750,000 or more in a year in federal awards must submit their audited annual financial reports and the data collection form to the Federal Audit Clearinghouse within thirty (30) days after receipt of the auditor’s report, or nine (9) months of the close of the auditee’s fiscal year. CONDITION: The Organization did not remit the annual audited financial statements and the data collection form to the Federal Audit Clearinghouse within 9 months after year-end as required by the Uniform Guidance. CAUSE: The Organization did not engage its independent auditor on a timely basis. EFFECT: The Organization is not in compliance with applicable federal regulations. QUESTIONED COSTS: Not Applicable RECOMMENDATION: The Organization should implement policies and procedures to ensure the timely filing of any and all required reports. MANAGEMENT’S RESPONSE: See Management’s Corrective Action Plan on pages 31-32.

FINDING# 2021-005 – GRANT PROGRESS REPORTING Title and Assistance Listing Number of Federal Program: 64.033 – VA Supportive Services for Veteran Families Program (SSVF) Federal Award Identification Number: 20-LA-207 Name of Federal Agency: U.S. Department of Veterans Affairs CRITERIA: The grant program requires progress reports to be prepared and submitted to the grantor quarterly. CONDITION: We requested progress reports which are submitted by grantees to the grantor, Department of Veterans Affairs. We were not provided with the requested reports. CAUSE: The Organization’s record retention procedures were not adequate. EFFECT: We were unable to determine if the Organization’s progress related to grant activities met program requirements. QUESTIONED COSTS: Not Applicable RECOMMENDATION: We recommend that the Organization develop and implement improved record retention procedures. MANAGEMENT’S RESPONSE: See Management’s Corrective Action Plan on pages 31-32.

FINDING# 2021-006 – INADEQUATE CASE NOTES Title and Assistance Listing Number of Federal Program: 64.033 – VA Supportive Services for Veteran Families Program (SSVF) Federal Award Identification Number: 20-LA-207 Name of Federal Agency: U.S. Department of Veterans Affairs CRITERIA: The grant program requires participants to meet eligibility requirements for admittance into the federal program. CONDITION: We requested supporting documentation for ten selected participants to verify each selection met the eligibility requirements. We noted two participants did not have proof of income and two other participants did not have a DD-214 or a VA Identification card. We were also unable to verify the residence of four participants to vouch if they received the proper assistance. CAUSE: The Organization’s record retention procedures were not adequate. EFFECT: We were unable to verify if the participants received the proper assistance based on their residential status. QUESTIONED COSTS: Not Applicable RECOMMENDATION: We recommend that the Organization develop and implement improved record retention procedures. MANAGEMENT’S RESPONSE: See Management’s Corrective Action Plan on pages 31-32.

CRITERIA: Federal regulations require the grant recipient to maintain appropriate records and source documentation to support all costs paid with federal grant funding, to ensure adequate. CONDITION: We examined a sample of27 grant expenditures for the SSVF grant program and noted that 16 transactions totaling $70,976 were incurred that did not have proper supporting documentation. We also noted the transactions were not accurately recorded to the proper grant accounts. CAUSE: The Foundation's record retention administrative procedures were not adequate. EFFECT: We were unable to determine if the grant costs totaling $70,976 were allowable costs for the SSVF grant program. QUESTIONED COSTS: $70,976 RECOMMENDATION: We recommend that management implement proper record retention procedures to assure all grant expenditures are supported by adequate documentation. MANAGEMENT'S RESPONSE: See management's corrective action plan on pages 30-31.

CRITERIA: 2 CFR requires that non-federal entities that expend $750,000 or more in a year in federal awards must submit their audited annual financial reports and the data collection form to the Federal Audit Clearinghouse within thirty (30) days after receipt of the auditor's report, or nine (9) months of the close of the auditee's fiscal year. CONDITION: The Organization did not remit the annual audited financial statements and the data collection form to the Federal Audit Clearinghouse within 9 months after year-end as required by the Uniform Guidance. CAUSE: The Organization did not engage its independent auditor on a timely basis. EFFECT: The Organization is not in compliance with applicable federal regulations. QUESTIONED COSTS: Not Applicable RECOMMENDATION: The Organization should implement policies and procedures to ensure the timely filing of any and all required reports. MANAGEMENT'S RESPONSE: See Management's Corrective Action Plan on pages 30-31.

CRITERIA: The grant program requires progress reports to be prepared and submitted to the grantor quarterly. CONDITION: We requested progress reports which are submitted by grantees to the grantor, Department of Veterans Affairs. We were not provided with the requested reports. CAUSE: The Organization's record retention procedures were not adequate. EFFECT: We were unable to determine if the Organization's progress related to grant activities met program requirements. QUESTIONED COSTS: Not Applicable RECOMMENDATION: We recommend that the Organization develop and implement improved record retention procedures. MANAGEMENT'S RESPONSE: See Management's Corrective Action Plan on pages 30-31.

CRITERIA: The grant program requires participants to meet eligibility requirements for admittance into the federal program. CONDITION: We requested supporting documentation for ten selected participants to verify each selection met the eligibility requirements. We noted two participants did not have proof of income and two other participants did not have a required DD-214 or a VA Identification card. We were also unable to verify the residence of four participants to determine if they received the proper assistance. CAUSE: The Organization's record retention procedures were not adequate. EFFECT: We were unable to verify if the participants received the proper assistance based on their residential status. QUESTIONED COSTS: Not Applicable RECOMMENDATION: We recommend that the Organization develop and implement improved record retention procedures. MANAGEMENT'S RESPONSE: See Management's Corrective Action Plan on pages 30-31.

Item 19-01 a. CONDITION: Bank reconciliations were not timely and accurately prepared. This is a repeat finding. Prior year findings:15-01, 16-01, 17-01, 18-01. b. CRITERIA Bank reconciliations must be accurately and monthly prepared to avoid erroneous transactions recorded in the general ledger and to provide reliable financial reports on a timely basis. c. CAUSE OF CONDITION: Lack of controls and oversight over the automated accounting system. d. POTENTIAL EFFECT OF CONDITION: There exist the risks that misappropriation of assets could occur by not recording all actual transactions thereby limiting the use of financial reports. e. RECOMMENDATION: It is recommended that management implement review and approval controls and oversight over the automated accounting to ensure bank reconciliations are performed and internal financial statements are generated on a timely basis. CLIENT RESPONSE Elle Foundation will include in its policies review and approval controls over the automated accounting system.

Item 19-02 a. CONDITION: The audit was not submitted to the Federal Clearing House by September 30, 2020. This is a repeat finding. Prior year findings: 14-01, 15-02, 16-02, 17-02, 18-02 b. CRITERIA Criteria or Specific Requirement: Elle Foundation is required to submit an audit of its annual financial statements to the Federal Clearing House within nine months of its year-end which is December 31, 2019. c. CAUSE OF CONDITION: The CPA was not engaged until September 24, 2020. d. EFFECT OF CONDITION: Noncompliance with Federal requirements financial reporting. e. RECOMMENDATION: I recommend Elle update its administrative procedures to include timely engagement of their independent auditor and assure submission of the audit report. CLIENT RESPONSE Corrective Action Procedures will be implemented to assure compliance with this requirement for each year going forward.

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