CHILDREN'S FUTURES INCNon-Profit

Finding Number 2021-001 Assistance Listing Number 93.926 Program Name "Health Resources and Services Administration Healthy Start Initiative" Federal Agency U.S. Department of Health and Human Services Federal Award ID H49MC07888 Federal Award Year 04/01/2020-03/31/2021; 04/01/2021-03/31/2022 Funding Type Significant Deficiency Compliance Requirement Reporting Pass-Through Entity None Questioned Costs $0 Children?s Futures, Inc. failed to file its single audit report with the federal awarding agency by the required due date ? the earlier of 30 calendar days after the receipt of the auditor?s report, or nine months after the end of the period under audit. Condition The single audit report for the year ended December 31, 2021 was required to be completed and filed by September 30, 2022, however, the audit was not completed, and subsequently submitted, until March 2023. Criteria Per 2 CFR 910.512(a)(1), the audit must be completed, and the reporting package must be submitted within the earlier of 30 calendar days after the receipt of the auditor?s report, or nine months after the end of the audit period. Cause Unknown Effect or Potential Effect Lateness in reporting could result in a lack of up-to-date information provided to federal agencies and potential impacts on grant funding. Recommendation We recommend that Children?s Futures, Inc. establish procedures and controls to ensure all required audits are performed timely. Views of Responsible Officials Children's Futures (CF) acknowledges missing the September 30, 2022 deadline, however, please note this was the first time in 20 years. The primary reason for missing the deadline was due to the difficulty hiring an experienced Financial Officer (FO) after the previous FO (of 10 years) moved on in December 2021. CF subsequently had two different people in the position over a 5-month period, including a person with a master?s degree and CPA but neither person was as familiar with non-profit accounting as they represented. This of course caused a major delay in closing the December 31, 2021 books and records. After experiencing another failed attempt with a temporary FO, CF sought the assistance of its previous FO who agreed to assist but had limited availability until the end of 2022. In addition, the CFO contracted COVID during the summer 2022. Nonetheless, CF will be prepared to complete the audit for year ended December 31, 2022 in the summer of 2023. CF has acquired a qualified consultant and is in the process hiring a qualified FO which will aid in the to return to its normal timely submission to the federal clearing house by September 30th.

Finding 2019-001: Allowable Costs/Cost Principles - Time and Effort Reporting (Material Weakness) Federal Agency: U.S. Department of Health and Human Services Program Name (CFDA #): Health Resources and Services Administration Healthy Start Initiative (93.926) Criteria: The distribution of the salaries and wages to awards must be supported by personnel activity reports or timesheets. Personnel activity reports or timesheets reflecting the distribution of activity of each employee must be maintained for all staff members whose compensation is charged, in whole or in part, to government-funded contracts. The reports must reflect an after-the-fact determination of the actual activity of each employee. Each report must account for total activity for which employees are compensated and which is required in fulfillment of their obligations. The report must be signed by the individual employee, or by a responsible supervisory official having knowledge of the activities performed by the employee, that the distribution of activity represents a reasonable estimate of the actual work performed by the employee during the periods covered by the reports. The reports must be prepared at least monthly and must coincide with one or more pay periods. Condition: For three of the four selected samples, we noted that personnel activity reports and/or timesheets, while timely prepared and approved by a supervisory official, did not identify actual time and effort allocable to the various federal programs. Cause: Procedures and internal controls associated with actual time and effort charged to government contracts were not adequately documented on timesheets for certain personnel who are allocated to federal programs versus direct charged. Effect: Management did not have sufficient documentation for the allocation of time to government contracts. Identification as a repeat finding: No Questioned Costs: $11,485 Recommendation: We recommend that management enhance its policies, controls and procedures to ensure that all time and effort allocations to federal programs are appropriately documented to comply with applicable cost principles. Views of Responsible Officials: Children's Futures, Inc. ("CF") recognized the missing allocation component on its timesheets and began implementing as of 11/30/2019 payroll and continued throughout fiscal year 2020. CF maintains semi-monthly timesheets signed by employees and their appropriate supervisor as it has done for 19 years. In addition, CF maintains a comprehensive monthly salary allocation spreadsheet detailing all employees and allocations by funding source, including indirect cost, which is reconciled to its ADP payroll detail records. Most importantly, CF adhered to all approved budgets and funding salary and wages guidelines and did not exceed the approved budgeted amounts. As referenced above, CF added the allocation component to its timesheets, beginning 11/30/2019, supporting staff time and effort by funding source. Management believes it was in compliance with approved budgets and contract guidelines.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION