CATHOLIC SOCIAL SERVICES OF WASHTENAW COUNTY

2019-001 - Allowable Costs/Cost Principles - Independent Approval of Journal Entries Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance. Programs: Crime Victim Assistance; U.S. Department of Justice; CFDA Number 16.575; Award Numbers E20190814-00, E20202536-00, E20192611-00, and E20203096-00. National Family Caregiver Support, Title III, Part E; U.S. Department of Health and Human Services; CFDA Number 93.052; Awards Numbers 18-9008-A, 19-9008-A, 18-9008-N, 19-9008-N, 18-9008-I, 19-9036-I, 18-9036-C, 19-9036-C, 18-9036-J, 19-9036-J, 18-9036-E, 19-9036-E, 18-9036-O, and 19-9036-O. Criteria. Management is responsible for establishing effective internal controls to safeguard the Agency's assets, and to prevent or detect misstatements. Manual journal entries, while an essential part of any accounting system, represent an opportunity to enter information into the Agency's records in a way that bypasses normal internal controls. Accordingly, the Agency should have a system in place to ensure that all manual journal entries and similar adjustments made to the Agency's accounting records are reviewed and approved by an appropriate member of management, independent of the preparer. Condition. All twenty-five cost allocation journal entries selected for testing did not include the required documentation of independent review or approval by members of senior management. Cause. Management did not consistently follow its documented manual journal entry policies during the year. Effect. While we are not aware of any actual misstatements caused by this condition, the Agency was nevertheless exposed to an increased risk that misstatements, whether caused by error or fraud, could occur and not be detected by management in a timely manner. Questioned Costs. No costs have been questioned as a result of this finding. Recommendation. We recommend that the Agency review its written policies and procedures for review and approval of manual journal entries. This review should be evidenced by signature/initials and date, attached to the supporting documentation, and retained for audit purposes. View of Responsible Officials. All journal entries are reviewed and posted only by the Vice President of Finance. Going forward, the journal entry workbooks will contain the initials of the preparer and the initials of the Vice President of Finance when posted.

2019-002 ? Allowable Costs/Cost Principles - Payroll Documentation Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance. Programs: National Family Caregiver Support, Title III, Part E; U.S. Department of Health and Human Services; CFDA Number 93.052; Awards Numbers 18-9008-A, 19-9008-A, 18-9008-N, 19-9008-N, 18-9008-I, 19-9036-I, 18-9036-C, 19-9036-C, 18-9036-J, 19-9036-J, 18-9036-E, 19-9036-E, 18-9036-O, and 19-9036-O. Criteria. Per the Uniform Guidance ?200.430 paragraph (i) charges to federal awards for salaries and wages must be based on records that comply with established internal accounting policies and procedures of the Agency (budgets or timesheets). This must provide reasonable assurance that the charges are accurate, allowable and properly allocated. Condition. The Agency was unable to provide proper documentation for four of the fifty-two transactions selected for testing and charged through the payroll system to the grants above. Each of these exceptions had documentation of their budgeted activity, but the estimate was not the final value charged to the grant. The Agency did not have documentation to justify the allocation change. Cause. This condition appears to be the result of the Agency not following its internal procedures for all of its employees being charged to grants. Effect. As a result of this condition, the Agency does not have appropriate payroll support for four of the fifty-two transactions selected for testing and charged to the grant. Despite the high rate of noncompliance, the differences between the budgeted and actual amounts charged to the applicable grants were not individually or collectively significant. Questioned Costs. No costs have been questioned as a result of this finding. Recommendation. We recommend the Agency establish written policies and procedures regarding the determination of allowable costs to include compensation and benefits charged to grants. Payroll documentation should be prepared and retained in accordance with the Agency's internal procedures and the Uniform Guidance. Any adjustments to predetermined payroll charges should be documented, justified appropriately and reviewed. View of Responsible Officials. Payroll allocations are prepared by distribution worksheets which are supported by the payroll registers. CSSW will be implementing an automated timekeeping module within Paycor system which will validate actual allocations each pay period. This was delayed from original completion time period of 2nd quarter 2020 due to COVID-19 pandemic stay home requirements.

2019-003 - Eligibility - Documentation of Eligible List of Participants Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance. Programs. National Family Caregiver Support, Title III, Part E; U.S. Department of Health and Human Services; CFDA Number 93.052; Award Numbers 18-9036-E and 19-9036-E. Criteria. Management is responsible for maintaining a current list of individuals who are served in programs funded by federal grants if those programs have specified requirements for participation. Condition. Management did not maintain a list of eligible participants in the program and therefore our sample items were not selected from a complete population. Cause. Program participants were not tracked throughout the year, and consequently the Agency does not have a complete listing of individuals who received services. Effect. As a result of this condition, the Agency is exposed to an increased risk that individuals who are not eligible for benefits are being served by the program with grant funding. No instances of ineligible participants were found during our testing, but if this were to occur it would be difficult for management to detect and resolve in a timely manner. Questioned Costs. No costs have been questioned as a result of this finding. Recommendation. We recommend that the Agency begin retaining a list of eligible program's participants. View of Responsible Officials. The list was maintained but we were unable to locate it due to long-term illness of Program Manager and transition to newly appointed Manager.

2019-004 ? Written Policies Required by the Uniform Grant Guidance Finding Type. Immaterial noncompliance; Significant deficiency in internal controls over compliance. Programs: Crime Victim Assistance; U.S. Department of Justice; CFDA Number 16.575; Award Numbers E20190814-00, E20202536-00, E20192611-00, and E20203096-00. National Family Caregiver Support, Title III, Part E; U.S. Department of Health and Human Services; CFDA Number 93.052; Awards Numbers 18-9008-A, 19-9008-A, 18-9008-N, 19-9008-N, 18-9008-I, 19-9036-I, 18-9036-C, 19-9036-C, 18-9036-J, 19-9036-J, 18-9036-E, 19-9036-E, 18-9036-O, and 19-9036-O. Criteria. The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant to have written policies pertaining to: 1) Payments (draws of federal funds and how to minimize the time lapsing between the receipt of federal funds and the disbursement to contractors/employees/subrecipients) (?200.302(6)); 2) Procurement (including bidding and a conflict of interest policy) (?200.302(7)); 3)Allowability of costs charged to federal programs (?200.302(7)); and 4) Compensation (personnel and benefits policy) (?200.430 and ?200.431). Condition. Although the Agency has processes in place to cover these areas, there are no formal written policies covering payments, procurement, allowability of costs, and compensation. Cause. This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance. Effect. As a result of this condition, the Agency did not fully comply with the Uniform Guidance applicable to the above noted grants. Questioned Costs. No costs have been questioned as a result of this finding. Recommendation. We recommend that the Agency take action immediately by drafting policies that will meet the criteria set forth in the Uniform Guidance. View of Responsible Officials. The agency has written procurement and accounting policies and procedures. However, CSSW will update the written procedures to include references in compliance with the Uniform Guidance.