BOYS AND GIRLS CLUB OF ELGIN INC

COVID-19 – CHILD CARE RESTORATION GRANT (CCRD CLUSTER) CFDA #93.575 U.S DEPARTMENT OF HUMAN SERVICES PASSED THROUGH: ILLINOIS DEPARTMENT OF HUMAN SERVICES FINDING NUMBER: 2022-002 Criteria or specific requirement: Management is responsible for ensuring that the Club complies with all grant requirements. Condition: During the audit it was noted that there were two individuals who did not have documentation of the correct wage that was used on the grant expenditure report. Questioned Costs: None Context: There were two individuals who could have been paid the incorrect salary amount. Effect: Undocumented salary rates could lead to unallowable grant expenditures. Cause: The Club switched payroll providers and had staff turnover and they were not able to find the documentation to support the salary wages at the time of testing. Recommendation: Management should review the employee files and keep all of the necessary documentation for wage increases. Management’s response: The Club has started to keep the documentation for each salary increase and review in the employee’s personnel files.

TWENTY-FIRST CENTURY COMMUNITY LEARNING CENTERS CFDA #84.287 U.S DEPARTMENT OF EDUCATION PASSED THROUGH: ILLINOIS STATE BOARD OF EDUCATION AND BOYS AND GIRLS CLUB OF AMERICA FINDING NUMBER: 2022-003 Criteria or specific requirement: Management is responsible for ensuring that the Club complies with all grant requirements. Condition: During the audit it was noted that in one instance wages submitted for reimbursement for one Club employee were more than gross wages that should have been assigned to the grant based on the amount of the paycheck. Questioned Costs: Questioned costs consist of the difference between what was submitted to the grant for reimbursement for the specific paycheck tested and the actual costs that should have been submitted, for an amount of $7. Context: Gross wages for one employee were incorrectly entered into the grant expenditure report. Effect: Grant reimbursement requests could be misstated if discrepancies are not caught before they are being submitted for reimbursement. Cause: Gross wages for one employee were entered incorrectly in the grant expenditure report and the inaccurate entry was not caught before the reimbursement request was submitted. Recommendation: Management should review grant expenditures carefully before they are being submitted for reimbursement. Management’s response: The Club plans to review the issue with its current procedures and revise them as necessary to provide better controls over grant expenditures.

Finding 2021-001 - Allowable Costs/Cost Principles Questioned Costs: None Program: 21st Century Grant Pass-Through Entity: Illinois Alliance of Boys and Girls Clubs Period: 07/01/20 - 08/31/21 Condition - A sample of 25 payroll disbursements were selected to test internal controls over compliance and compliance with allowable costs/costs principles. Out of the 25 selected, 6 allocations to the major program were not supported by documentation to support the allocation. The allocation for these 6 payroll transactions was based on documentation that the Club could not provide. In all 6 cases the employee worked directly for multiple programs. Criteria - The Club should follow federal costs principles and its own policies and procedures for documenting payroll allocations. Effect - Undocumented payroll allocations could lead to unallowable grant expenditures. Cause - The Club has had turnover and changes in systems and cannot provide documentation for allocations. Recommendation - We recommend that management put into place a process for keeping required documentation pertaining to federal expenditures. View of Responsible Officials - The Club will download and retain internally all timecards to avoid any issues in providing payroll support of this kind in the future.

Finding 2019-001 - Review on Year End Preparation of Financial Statements in Accordance with GAAP Criteria Under Statement of Auditing Standards 112, Communication Internal Control Related Matters Identified in an Audit, a control deficiency exists when the design or operation of control does not allow management or employees, in the normal course of performing assigned functions, to prevent or detect misstatement on a timely basis. Condition During the audit, the auditors made journal entries of which four were above material misstatement ($7,900). The adjusting journal entries were made to adjust various balance sheet and income statement accounts to the correct ending balances under generally accepted accounting principles. Context In the past year the Club failed to follow a practice of performing a complete interim or year-end analysis of the general ledger accounts. For this reason, numerous problems were encountered in the year-end preparation of the financial statements. Cause A change occurred during the year as the reporting period end date was changed from December 31 to August 31. Effect The transition caused changes in standard accounting procedures, leading to various new practices, and occasional items being overlooked. Recommendation We recommend that standard procedures and account analysis and review be performed at interim and year-end to avoid overlooking necessary account adjustments.

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