SURVIVORS OF TORTURE, INTERNATIONALNon-Profit

Finding: 2025-002 – Cash Management – Significant Deficiency in Controls over Compliance and immaterial instance of non-compliance Department: United States Department of Health and Human Services Program Name: Assistance for Torture Victims Federal Assistance Listing Number: 93.604 Criteria: 2 CFR 200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by COSO. 2 CFR 200.305 mandates that federal payments, including reimbursement, must minimize the time elapsing between fund transfer and disbursement. Condition/Context: During our walkthroughs of the cash draw process, the Organization indicated that evidence supporting preparation of the draw and review of the draw is not retained in its books and records. Additionally, the Organization drew funds in excess of their immediate cash needs, totaling approximately $350,000. Cause: Management did not have a documented policy and set of documented procedures in place to ensure consistent application of an independent review and memorializing that review. Effect: Draws in excess of amounts incurred may not be spent within three days. Further, any amounts claimed that are not allowable grant expenditures may be disallowed by the granting agency. Questioned Costs: None Repeat finding: This is a repeat finding – see prior year 2024-002. Recommendation: We recommend that the Organization establish a written policy and procedures for cash management that should be reviewed and approved by those charged with governance. The policy should require that all draws be reviewed by someone independent of the individual calculating the draw. The review should be documented in the Organization’s books and records. Views of responsible officials and planned corrective actions: Management agrees with the recommendation and has established a written policy and implemented a documented process for the preparation and review of federal drawdowns, including clear evidence of review such as signoffs or electronic approvals.

Finding: 2024-002 – Cash Management – Significant Deficiency in Controls over Compliance Department: United States Department of Health and Human Services Program Name: Assistance for Torture Victims Federal Assistance Listing Number: 93.604 Criteria: 2 CFR 200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by COSO. Condition/Context: During our walkthroughs of the cash draw process, the Organization indicated that there is a lack of evidence supporting preparation of the draw and review of the draw. Cause: Management did not have a documented policy and set of documented procedures in place to ensure consistent application of an independent review and memorializing that review. Effect: Draws in excess of amounts incurred may not be spent within three days. Further, any amounts claimed that are not allowable grant expenditures may be disallowed by the granting agency. Questioned Costs: None identified. Repeat finding – This is not a repeat finding. Recommendation: We recommend that the Organization establish a written policy and procedures for cash management that should be reviewed and approved by those charged with governance. The policy should require that all draws are reviewed by someone independent of the individual calculating the draw. The review should be documented in the Organization’s books and records. Views of responsible officials and planned corrective actions: Management agrees with this finding.

Finding: 2023-004 Significant Deficiency: Inadequate Internal Control over the Schedule of Expenditures of Federal Awards (SEFA) Criteria: Management and those charged with governance are responsible for the design, implementation, and maintenance of internal control relevant to the accuracy and completeness of federal expenditures and present schedule of expenditures of federal expenditures as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Condition: During our audit, we noticed that the Organization’s federal expenditures were not correctly allocated. We identified instances where: a) several direct program expenditures were not allocated to the federal program in the month they were incurred, b) September 2023 indirect costs were not included for one program, and c) reimbursable federal awards were not recorded as conditions were met. These misstatements resulted in a significant understatement of expenditures reported in the SEFA. Cause: Inadequate internal control procedures fail to ensure the accurate and timely allocation of federal expenditures to the appropriate programs. Insufficient training or awareness of federal award regulations and compliance requirements results in the misapplication of allocation rules. Ineffective oversight of SEFA preparation processes allows misstatements in expense allocation to go undetected until identified during the audit process. Effect: Multiple revisions to the client-prepared SEFA and numerous adjustments were required to correct misstatements in revenue resulting from the discrepancies in the client-prepared SEFA. Recommendation: We recommend management to a) strengthen the design and implementation of internal control procedures to ensure accurate and timely allocation of federal expenditures, b) provide comprehensive training to staff involved in SEFA preparation to improve awareness and understanding of federal award regulations and compliance requirements, and c) implement effective monitoring and oversight procedures to regularly review SEFA preparation process and identify and correct errors or discrepancies promptly. Views of responsible officials and planned corrective actions: Management agrees with this finding. Please refer to the corrective action plan on page 35.

Finding: 2023-005 Department: United States Department of Health and Human Services Program Name: Assistance for Torture Victims Federal Assistance Listing Number: 93.604 Significant Deficiency: Inadequate Internal Control over Allowable Costs Criteria: Management and those charged with governance are responsible for the design, implementation, and maintenance of internal control to accurately report allowable cost and maintain adequate documentations for transparency and accountability. Condition: During our testing of allowable costs, we found eight deviations, including: a) four deviations due to incorrect allocation of personnel and related expenses, b) one deviation involving unallowable costs, where the audit fee for the audit of the financial statements ended September 30, 2022, was charged to the program, c) one deviation due to expenses incurred outside the performance period charged to the program, d) two deviations due to miscalculations, and e) four of the eight deviations do not have calculations kept in the file to support the allocation. Cause: Inadequate internal control procedures lead to errors in allocation and classification of expenses. Insufficient training or awareness of federal award regulations and compliance requirements results in misapplication of allocation rules, charging the expense outside the performance period or misclassifying cost as allowable. Ineffective oversight processes allow misstatements in expenses allocation to go undetected until identified during the audit process. Effect: Incorrect amount of expenses was charged to the program. Questioned Costs: Total questioned costs were $6,869, consisting of a) $2,830 due to incorrect allocation of personnel and related expenses, b) $4,000 unallowable costs, c) $26 were incurred outside the performance period charged to the program, and d) $13 were due to miscalculations. Recommendation: We recommend management to a) strengthen the design and implementation of internal control procedures to ensure accurate allocation and classification of expenses, b) provide comprehensive training to staff involved in the expense allocation process to improve awareness and understanding of federal award regulations and compliance requirements, and c) implement effective oversight processes to monitor expense allocation and promptly detect and correct misstatements. Views of responsible officials and planned corrective actions: Management agrees with this finding. Please refer to the corrective action plan on page 36.