Chicago Area ProjectNon-Profit

See Schedule of Findings and Questioned Costs for chart/table. Criteria: The Agency is required to submit quarterly financial reports describing the expenditures(s) of the funds related thereto, no later than 30 calendar days following the three month period covered by the report. Additionally, the Agency is required to submit a close-out report within 60 calendar days following the end of the period of performance for the grant. Lastly, any grant funds remaining that are not expended or legally obligated by the Agency at the end of the grant period shall be returned to the granting agency within 45 days. Condition: We noted the quarterly financial reports and close-out reports were submitted to the granting agency timely, however expenditures were based on estimated expenditures versus a completed final reconciliation of actual expenditures. Further, we noted the Agency did not return unspent funds within 45 days of the end of the grant period. Context: Based on final close-out report reconciliations, we noted $213,162 of unspent funds for the fiscal year ended June 30, 2020, of which $118,885 relate to these federal programs. Questioned Costs: None noted. Cause: Given the stay at home orders during the pandemic, finance personnel had limited access to the office. Timely reconciliation of monthly and quarterly reporting and review over recording of grant expenditures was not performed. Effect: An adjustment of $213,162 was recorded to the financial statements to remove the revenue and record a liability for the return of funds to the granting agency and the Schedule of Federal Expenditures was adjusted accordingly. Recommendation: We recommend that the Deputy Chief Financial Officer (CFO) and program personnel reconcile actual grant expenditure report submissions to the general ledger on at least a quarterly basis. We recommend that the Agency utilize program codes when recording expenditures in the general ledger accounts to track those expenditures submitted to state and federal granting agencies for reimbursement. A quarterly reconciliation of the general ledger to the quarterly submission reports would further enhance internal controls over federal and state expenditure reimbursements and enhance management's monitoring of unspent funds. Views of Responsible Officials: As a result of staff turnover and downsizing related to budget constraints, additional oversight and reconciliation procedures were unable to be implemented as planned. The Agency will establish additional review procedures to ensure revenue and expenses are recorded in the proper period and reconciliations are performed. We will also ensure all expenditures listed on reports are based on actual versus budgeted expenditures.

See Schedule of Findings and Questioned Costs for chart/table. Criteria: It is the Agency's policy that the requestor, supervisor and executive director approve all grant expenses. Condition: We noted instances in which at least one of the required signoffs was missing. Specifically, the supervisory sign off was missing. Context: A total of 8 out of 17 expenditures tested did not have proper approval by all required supervisory personnel for disbursement of funds. However, we noted all disbursements included approval by at least one authorized person, disbursements were allowable and properly charged to the grant.Questioned Costs: None noted. Cause: Lack of proper approval of grant expenditures. Effect: If supporting documentation for expenditures is not reviewed by all required supervisory personnel, there is a reasonable possibility that unauthorized payments could be issued. Recommendation: All required supervisory personnel of the Agency should indicate review/approval of expenditures on supporting documentation via signature or initial. Views of Responsible Official: Management will ensure the Agency's policies and procedures are communicated and grant expenditures requested have all documented approvals before the expenditure is disbursed.