Centers for New HorizonsNon-Profit

Criteria: 2 CFR 200.405 maintains that costs which are allocable to more than one program be allocated based on the proportional benefit or as determined on any reasonable basis. Condition: Cost allocations for salaries and related expenses allocated across program activities were not supported by allocated amounts in time sheets. Cause: Due to the transition of staff and accounting systems throughout the year, the Organization had inconsistent reconciliations of employee payroll to the vouchers submitted for awards. Context: Cost allocations for salaries and related expenses allocated across program activities were not supported by allocated amounts in time sheets. Questioned Costs: None. Effect: Because the reconciliation process in place was not consistently followed to agree employee payroll reports to cost allocations, it is possible that an employee's time may be inappropriately allocated amongst functional activities, including federal award programs. Recommendation: Procedures should be consistently applied requiring the reconciliation of submitted payroll reports to the employees' actual costs allocated and charged to federal and other programs. View of Responsible Officials: The Organization agrees with the finding, see corrective action plan.

Condition: Documentation of review and approval was unable to be provided for certain financial and performance reports. Cause: Due to the transition of staff and accounting systems throughout the year, the Organization had inconsistent maintenance of accounting records. Context: For 27 of the 27 reports selected for testing across all programs, the Organization was unable to provide documentation of the review and approval by the Program Director. Effect: A lack of oversight by the Program Director could result in material misstatements of the reports submitted to funders. Recommendation: Documentation should be maintained of the controls conducted by the Organization. View of Responsible: The Organization agrees with the finding, see corrective action plan.

Condition: Cost allocations for salaries and related expenses allocated across program activities were not supported by allocated amounts in timesheets. Cause: Due to the transition of staff and accounting systems throughout the year, the Organization had inconsistent reconciliations of employee payroll to the vouchers submitted for awards. Context: Cost allocations for salaries and related expenses allocated across program activities were not supported by allocated amounts in timesheets. Effect: Because the reconciliation process in place was not consistently followed to agree employee payroll reports to cost allocations, it is possible that an employee's time may be inappropriately allocated amongst functional activities, including federal award programs. Recommendation:Procedures should be consistently applied requiring the reconciliation of submitted payroll reports to the employees' actual costs allocated and charged to federal and other programs. View of Responsible: The Organization agrees with the finding, see corrective action plan.

Condition: Cost allocations for non-payroll and related expenses allocated across program activities, including federal award programs, were not supported as being approved by the Program Cause: Due to the transition of staff and accounting systems throughout the year, the Organization had inconsistent documentation of Program Director approval of expenditures charged to federal programs. Context: For 59 of the 138 non payroll expenditures selected for testing across all programs, the Organization was unable to provide documentation of the review and approval by the Program Director. Effect: Because the process for documenting program director approval of expenses not consistently followed, it is possible that unallowable costs or activities may be inappropriately allocated amongst functional activities, including federal award programs. Recommendation: Procedures should be consistently applied requiring the documentation of Program Director approval of expenditures charged to federal and other programs. View of Responsible: The Organization agrees with the finding, see corrective action plan.

Condition: Certain expenses related to non-payroll transactions charged to the federal program did not have adequate support for the purchase or underlying expense in order to determine if the expense was allowable under the grant. For these same transactions, there was no evidence of review and approval by the Program Director and are included in finding 2024-003. Cause: Due to the transition of staff and accounting systems throughout the year, the Organization had inconsistent reconciliations and documentation of expenditures charged to federal programs. Context: For 7 of the 100 non payroll expenditures selected for testing across all programs, the Organization was unable to provide supporting documentation for the expense. Effect: Lack of expense documentation and controls can result in actions taken by oversight agencies which could impact future funding. Recommendation: Procedures should be consistently applied to ensure expenditures are supported by adequate documentation of payment. View of Responsible: The Organization agrees with the finding, see corrective action plan.

Condition: The Organization did not retain the documentation of verification of vendors not suppressed or debarred prior to entering into a contract with the vendor. Cause: Unknown Effect: Despite having a written procurement policy, if the Organization does not maintain sufficient documentation of procurement evaluations and decisions, the Organization's procurement practices will not comply with the Uniform Guidance. Recommendation: The Organization should retain formal documentation with regard to its procurement decisions. View of Responsible: The Organization agrees with the finding, see corrective action plan.

Condition: On the original SEFA provided for the audit, three grants were inaccurately listed with the incorrect assistance listing number and two additional grants were inaccurately included on the schedule. This resulted in a restatement of the SEFA. Cause: Due to staff turnover, the staff preparing the SEFA were unaware of the specifics of some individual grants. Effect: SEFA was inaccurate. Recommendation: The Organization should put controls in place over the preparation and review of the SEFA including agreeing line items to underlying grant agreements to ensure that only (and all) federal expenditures are included. View of Responsible: The Organization agrees with the finding, see corrective action plan.

Condition: The audit reporting package and data collection form for the year ended June 30, 2023 was not submitted to the FAC within the timeframe as required by Uniform Guidance. Criteria: The auditee is responsible for ensuring the timely submission of the audit reporting package and data collection form to the Federal Audit Clearinghouse (FAC). Cause: Due to the transition of staff and accounting systems throughout the year, the Organization had inconsistent accounting records requiring a manual compilation of the general ledger activity during the year. Effect: The Organization will not qualify as a low-risk auditee for two years. Recommendation: The Organization should submit the audit reporting package and data collection form as soon as the audit is available. View of Responsible Officials: The Organization agrees with the finding, see corrective action plan.

Condition: As a part of the internal controls of the Organization, monthly required reports are to be reviewed and approved by the applicable program director. Criteria: For 10 of the 10 reports selected for testing, the Organization was unable to provide documentation of the review and approval by the program director. Cause: Due to the transition of staff and accounting systems throughout the year, the Organization had inconsistent maintenance of accounting records. Effect: A lack of oversight by the program director could result in material misstatements of the reports submitted to funders. Recommendation: Documentation should be maintained of the controls conducted by the Organization. Views of Responsible Officials: The Organization agrees with the finding, see corrective action plan.

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