Tennessee Alliance of Boys & Girls Clubs, Inc.

Program Information: 84.287C Twenty-First Century Community Learning Centers; Lottery for Education: Afterschool Programs (LEAP) Criteria: (CFR) Section 200.332 requires a pass-through entity (PTE) to clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). Condition: The Organization did not execute awards with its subrecipients until after funds were disbursed to the subrecipient. Cause: Lack of administrative oversight with respect to subrecipient monitoring requirements. Effect: The Organization was not in compliance with subrecipient monitoring requirements. Questioned Costs: None Context: The Organization did not execute awards with its subrecipients until April 2024. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its policies and procedures over subrecipient monitoring to ensure subaward agreements are executed at the time of the subaward. Views of Responsible Officials: The Alliance will implement additional administrative oversight to execute subaward agreements in a timely manner.

The Alliance team will enhance its procedures to execute subaward agreements in advance of awarding funds.

Program Information: 21st Century Community Learning Centers (ALN #93.575) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Federal Compliance Requirement: M. Subrecipient Monitoring- All accounting records must be supported by source documentation and retained in order to show for what purpose funds were spent per the grant agreement. Condition: The Organization is not in compliance with certain subrecipient monitoring conditions as required. Monthly subrecipient invoice did not agree to accounting records. Cause: Administrative oversight with respect to subrecipient monitoring requirements. Effect or Potential Effect: The Organization was not in compliance with subrecipient monitoring requirements. Questioned Costs: Below reporting threshold. Context: For 1 of 15 monthly invoices selected for testing, the Organization did not properly verify that the underlying expenditures incurred matched the invoice amounts requested for reimbursement from the State. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its policies and procedures over subrecipient monitoring to ensure accurate invoicing. Views of Responsible Officials and Planned Corrective Actions: Management will update subrecipient monitoring procedures to ensure compliance with subrecipient monitoring requirements.

Individual Responsible for Corrective Action Plan: Whitney Holliday, Director of Club Financial Services Corrective Action: Previous Process: The previous process was created prior to the current admin becoming the dedicated Financial Services leader on the Boys & Girls Clubs in TN/TN Alliance admin team. All changes took place over the 2022/2023 grant cycles. Current Process: The previous process was overhauled to our current process in Q1 of 2022. Training and updates to the process were performed with 20 organizations throughout the year. We also implemented better direct communication with admin/staff 1:1s and a quarterly financial update call to continue training and best practice sharing. Process Update: A process update will be implemented beginning with July 2023 reimbursement requests/submissions to funders. These updates will be shared with individual Clubs with an expectation of full implementation by the end of Q3 2023. The admin will enhance its policies and procedures over sub-recipient monitoring to ensure accurate invoicing. -All reimbursement requests due from the Clubs by the 15th of each month o Previous Process: ? Requests were either loaded in the shared drive or emailed directly to the admin. Requests were consistently late and admin would communicate with each Club to see if they submitted something but it was missed. o Current Process: ? Calendar reminders are disbursed to all financial contacts with the deadlines clearly defined ? All submissions must be made in the shared drive. No email reimbursement requests are allowed. ? Admin no longer reached out to Clubs if nothing is loaded in the shared drive to process by the deadline ? Direct communication opened and established between Club financial leaders and admin financial leader to ensure all deadlines are met o Process Update: ? No update is needed ? Reimbursement Request/Cover Sheet o Previous Process: ? Submissions were processed based on a spreadsheet that the Clubs tracked in the shared drive. ? Manual verification of lines requested o Current Process: ? A cover sheet detailing the calculations of each line in the reimbursement request is required with each submission. Acknowledgment by Clubs that they have included/not included (timesheets signed in 3 places, receipts with no sales tax or other unallowable expenses, request submitted by the 15th of each month) via check boxes prior to authorized signature and date. ? All salary and benefit calculations must be completely detailed in the supporting documentation. This has remained difficult with all 20 organizations having different pay structures, paycheck layouts, benefit providers, etc. ? All supporting documentation must be present at the time of processing or line item requests are removed from overall submission. ? All submissions are compiled and sent to funders by their deadline on a monthly basis o Process Update: ? Additional calculation details will now be required for all submissions. We will add a separate box for the percentage breakdown to be charged to each grant to match supporting documentation exactly. ? All communication of errors will be in writing and detailed notes will be kept. No more phone conversations about corrections unless also documented in writing. ? If there are any unclear calculations in the request, it will be sent back to the Club to submit the following month. This will take the liability for the error off the admin and place it back with the Club. ? We will no longer allow miscellaneous benefits (other than payroll taxes) as an allowable expense for reimbursement as they are difficult to verify. ? 1:1 training will be conducted with each Club prior to their first reimbursement request for new grant cycles. With turnover and task sharing in our organization, this will ensure direct training and increase compliance. ? Quarterly financial update calls will be longer/more specific. ? We will no longer allow Clubs to combine requests over multiple months. This inconsistency tends to lead to errors. ? Additional admin support has been added to decrease the number of requests being processed by one individual per month. We have hired an additional staff member. ? Status of Funds o Previous Process: ? Clubs kept up with their budgets/available balances themselves o Current Process: ? Admin updates a running spreadsheet in the shared drive after each month's submission to ensure Clubs are aware of their available balances for each grant o Process Update: No update is needed Anticipated Completion Date: September 30, 2023

Federal Program Information: Child Care and Development Block Grant (CDFA #93.575) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Subrecipient Monitoring (2 CFR 200.332(d)(2),(3)) ? Pass-through entity monitoring of the subrecipient must include: following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward; and issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ?200.521. Condition: The Organization did not follow-up on a deficiency identified during one of its subrecipient?s Single Audit. Cause: Insufficient internal controls and lack of sufficient administrative oversight with respect to subrecipient monitoring procedures. Effect or Potential Effect: The Alliance was not in compliance with requirements for pass-through entities. Questioned Costs: None. Context: For 1 of 3 local clubs with single audits performed for fiscal year 2020, in which the child care and development block grant was tested as a major program, the Organization did not follow-up on a deficiency related to its subaward. Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Alliance and BGCA as fiscal agent enhance their monitoring activities and internal controls to ensure that deficiencies identified at local clubs are addressed and corresponding management decisions are issued.

Name of Responsible Individual(s): T. Ryan Hughes; Alliance Director, Jason Penegar, Vice President, Controller; Michelle Branan, Internal Auditor Corrective Action: BGCA currently receives the single audits annually for each subrecipient (Club). All single audit deficiencies will be shared directly with the Alliance in the future. We will ensure a collaborative follow up is completed on any future deficiency with subrecipient (Club). Anticipated Completion Date: April 1, 2022