BOYS AND GIRLS CLUB OF LAKE COUNTYNon-Profit

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 instances of wages submitted for reimbursement for two Club employees were more than gross wages that should have been assigned to the grant based on the amount of the paycheck and the percentage allocation. Questioned Costs: Questioned costs consist of the difference between what was submitted to the grant for reimbursement for the specific paychecks tested and the actual costs that should have been submitted, for an amount of $18,462. Context: Gross wages for the two employees were incorrectly entered into the grant expenditure report. Effect: Grant reimbursement requests could be misstated if discrepancies are not caught before they are submitted for reimbursement. Cause: Gross wages for two employees were entered incorrectly in the grant expenditure report and the inaccurate entry was not caught before the reimbursement requests were submitted. Recommendation: Management should review grant expenditures carefully before they are 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.

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 the beginning of the year, employee timecards were missing. Questioned Costs: None Context: In most instances, the review and approval of hours worked could not be reviewed since the timecards were not kept. Effect: Grant expenditures could be misstated if hours are being paid our without approval. Cause: The Club's internal control procedures were not followed consistently. Recommendation: The Club should monitor the approval of timecards for hourly employees to ensure proper backup exists for grant reimbursements. Management's response: The Club has reviewed their monitoring procedure and during the fiscal year started ensuring consistent approval of employee timecards.

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 some individuals who did not have documentation of the correct wage that was used on the grant expenditure report. The Club also did not keep any copies of the invoices to back up which expenses are allocated to the grant. Questioned Costs: None Context: There were some individuals who could have been paid the incorrect salary amount and the Club could request reimbursement for supplies that were not actually purchased. Effect: Undocumented salary rates and supply invoices could lead to unallowable grant expenditures. Cause: The Club did not keep accurate employee files and they were not able to find documentation to support the salary wages at the time of testing. Recommendation: Management should review the employee files and keep all the necessary documentation for wage increases. Management should also keep track of supplies that are purchased and keep the necessary documentation for backup. Management's response: The Club has started to keep the documentation for each salary increase and review in the employee's personnel files and the supplies that have been purchased.

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 instances of wages submitted for reimbursement for two Club employees were more than gross wages that should have been assigned to the grant based on the amount of the paycheck and the percentage allocation. Questioned Costs: Questioned costs consist of the difference between what was submitted to the grant for reimbursement for the specific paychecks tested and the actual costs that should have been submitted, for an amount of $15,478. Context: Gross wages for the two employees were incorrectly entered into the grant expenditure report. Effect: Grant reimbursement requests could be misstated if discrepancies are not caught before they are submitted for reimbursement. Cause: Gross wages for two employees were entered incorrectly in the grant expenditure report and the inaccurate entry was not caught before the reimbursement requests were submitted. Recommendation: Management should review grant expenditures carefully before they are 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.

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 twenty-three individuals who did not have documentation of the correct wage that was used on the grant expenditure report. The Club also did not keep any copies of the invoices to back up which expenses are allocated to the grant. Questioned Costs: None Context: There were twenty-three individuals who could have been paid the incorrect salary amount and the Club could request reimbursement for supplies that were not actually purchased. Effect: Undocumented salary rates and supply invoices could lead to unallowable grant expenditures. Cause: The Club did not keep accurate employee files 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 the necessary documentation for wage increases. Management should also keep track of supplies that are purchased and keep the necessary documentation for backup. Management’s response: The Club has started to keep the documentation for each salary increase and review in the employee’s personnel files and the supplies that have been purchased.

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 most of the instances, employee timecards were missing. Questioned Costs: None Context: In most instances, the review and approval of hours worked could not be reviewed since the timecards were not kept. Effect: Grant expenditures could be misstated if hours are being paid out without approval. Cause: The Club’s internal control procedures were not followed consistently. Recommendation: The Club should monitor the approval of timecards for hourly employees to ensure proper backup exists for grant reimbursements. Management’s response: The Club will review their monitoring procedures to ensure consistent approval of employee timecards.