Akron Community Service Center & Urban League, Inc.Non-Profit

Condition: During our testing of a sample of payroll transactions charged to the major programs, we noted one employee had a portion of time charged to the grant as a direct expense while the remainder of their time worked was charged to the indirect cost pool for allocation to other grants and departments, including the same major program the direct costs tested were charged to. Criteria: Under 2 CFR Part 200, Subpart E -Cost Principles, costs charged to a federal program must meet certain criteria to be allowable including those costs be accorded consistent treatment. A cost must not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. Cause: Policies and procedures are not designed effectively to ensure that payroll costs charged to federal programs adhere to the criteria listed above. Effect: As a result of the deficiency noted, certain payroll costs were charged within both the direct and indirect categories. Context: Out of a test of 40 payroll transactions, 2 transactions were identified for an employee who has a portion of time charged as direct and another portion charged through the indirect cost pool. Based on the employee’s job responsibilities, we determined that the amounts charged as direct represent the questioned costs. A statistical sample was not used. We believe this significant deficiency impacts the allowable costs/ cost principles compliance requirement. Questioned Costs: $1,167 Recommendation: Management should review procedures over allocation of payroll transactions and ensure that employees are identified as either direct or indirect and that their time be treated consistently.

Condition: During our testing of costs charged to the major program through the direct administrative cost recovery calculation (indirect costs), we identified certain invoices charged to the indirect pool that were unallowable under the cost principles. Criteria: Under 2 CFR Part 200, Subpart E -Cost Principles, costs charged to a federal program must meet certain criteria to be allowable including that they be necessary and reasonable for the performance of the federal award. In addition, the cost principles outline certain costs as unallowable in federal awards. Cause: The noted unallowable expenditures were identified during the invoice approval and coding process to be charged fully to non-federal programs however, were erroneously coded to administrative class within the accounting system and therefore, allocated to the major program. Effect: As a result of the deficiency noted, we identified 2 transactions allocated to the major program that are unallowable. Context: Out of a test of 40 charges made to the indirect cost pool, 2 transactions were identified as being unallowable under the cost principles. A statistical sample was not used. We believe this significant deficiency impacts the allowable costs/ cost principles compliance requirement. Questioned Costs: $248 Recommendations: We recommend internal control procedures be reviewed by management to ensure that the coding and approval of invoices ensures that costs are captured and recorded within the correct class within the accounting system and that any costs not allowable under the cost principles, be recorded in a separate P&L class that is not allocated to federal programs.

Condition: During our review of internal controls over allowable activities and allowable costs/cost principles compliance requirement for the major federal program above, we noted several instances which personnel activity reports used to generate the request for reimbursement were not signed as approved by the employees? direct supervisor. Criteria: Effective internal controls should be established to prevent or detect noncompliance with required compliance requirements over federal awards, including payroll expenditures charged to federal awards. Cause: Procedures are not being consistently applied to review personnel activity reports before preparation of monthly request for reimbursement and submission to grantor. Effect: As a result of the deficiency noted, internal controls over personnel charges to federal programs were deemed to be ineffective to prevent or detect noncompliance with compliance requirements over federal awards. Recommendation: Management should review procedures over approval of personnel activity reports and ensure procedures are being consistently followed including review of all reports by employees? direct supervisor.

Condition: During our audit procedures over compliance requirements, reports submitted to the grantor were not reviewed by an employee separate from the preparer before being submitted. Criteria: Effective internal controls should be established to prevent or detect noncompliance with required compliance requirements over federal awards. Cause: Procedures are not currently in place to require an employee, separate from the report preparer, to review required grant reports prior to submission to the grantor. Effect: As a result of the deficiency noted, our audit procedures identified several reports submitted to the grantor during 2022 that were revised after initial submission due to the grantor?s review identifying certain items that required correction. Recommendations: We recommend internal control procedures be reviewed by management and a secondary review of all submitted reports be performed by an employee, separate from the preparer and knowledgeable of compliance requirements, for completeness and accuracy, including comparing to source documentation and any reconciliations between source data and final reporting.

2020 ? 002: Major Federal Award Program Ineligibility of Participant U.S. Department of Health & Human Services Temporary Assistance for Needy Families (TANF) CFDA No. 93.558 Condition: During our testing of the eligibility requirement for the major federal program above, we noted one participant who was present and billed under the February 2020 CCMEP/TANF participant roster, but whose ?CCMEP ? Client Referral Form? from the Summit County Department of Job and Family Services clearly indicated ?No? as to whether she was TANF Eligible. (She was instead ?WIOA Eligible? per her form.) As such, this participant was found to be ineligible for the major federal program above within which she was participating during 2020. Criteria: Procedures should be in place where program management is actively and accurately reviewing to allow only eligible participants to participate in their respective federal programming. Cause: During 2019 and 2020, there was some employment turnover within the program departments at the Organization, and those transitions likely created inadvertent or incorrect procedures to be followed in terms of allowing or disallowing participants within federal programs. Effect: An ineligible participant was incorrectly allowed to participate in the major federal program noted above. Recommendation: Controls over the eligibility of those allowed to participate in major federal programs should be implemented and followed to ensure accuracy in who is, and is not, allowed to participate. Views of Responsible Officials and Planned Corrective Actions: Management will take steps to review and make the necessary changes to its procedures for allowing participation in its federally funded programs in alignment with the determinations made by Summit Country Department of Job & Family Services in regards to participant eligibility.

2020 ? 003: Major Federal Award Program Unallowable Costs U.S. Department of Health & Human Services Temporary Assistance for Needy Families (TANF) CFDA No. 93.558 Condition: During our testing of the allowable costs/costs principles requirement for the major federal program above, we noted four participants whose hours worked, and therefore associated payroll costs, were allocated partially to the TANF/CCMEP program above. However, for one month of billing, we noted a portion their hours were not allocated in a consistent method or percentage. I.e. their regular hours were allocated to CCMEP at 80%, but their holiday hours were allocated to CCMEP at 100%. This created an overbilling to Summit Country for the month in question of $308 in unallowed costs.Criteria: Procedures should be in place to review and consistently allocate employee time spent on federal programs and to ensure clerical and mathematical accuracy of monthly invoicing to respective federal programming. Cause: Allocation methods have been in flux during 2019 and 2020 as upper management has turned over, all while management has also worked with third parties to determine the most accurate allocation methodologies. In addition, certain time reporting forms required by the County changed formats during 2020. These factors likely all contributed to create small errors in calculations for invoices. Effect: Certain payroll costs in the amount of $308 were overbilled to the County for unallowed costs for the program above. Recommendation: Controls over the monitoring, oversight and review of monthly invoices submitted to the County should be implemented in line with best practices to include both a review or sign-off from the program supervisor for program applicability, along with a secondary, higher-level review to ensure accuracy, applicability and eligibility of expenses being submitted for federal funding. Views of Responsible Officials and Planned Corrective Actions: Management will take steps to review and make the necessary changes to its procedures to institute controls to ensure accuracy, applicability and eligibility of expenses being submitted for federal funding.