Violence Free Minnesota

Condition: The yearly performance report, the FVPSA Performance Progress Report (OMB No: 0970-0280), did not have all of the correct information (incorrect grant ID and incorrect organization name). The yearly financial report, the SF-425 (OMB No: 4040-0014), did not contain all of the correct information (incorrect signer and old organization name and address) and was submitted late, by just under 3 months. Criteria: The Uniform Guidance requires, and 45 CFR 75.341-75.342 prescribes that reports are prepared with all correct and relevant information and submitted within specified timeframes outlined in grants. Context: This appears to be an isolated issue resulting from turnover of staff responsible for compiling the data and submitting Federal reports. We reviewed both the programmatic and financial grant reports. In the period that the reports were required to be submitted, there was significant turnover in accounting and executive staff, including an interim executive director. The Organization experienced difficulty accessing the required reports from the Federal government and difficulty entering correct information in a timely manner. Cause: Executive Director and accounting staff turnover, which lead to difficulty in accessing Federal reports and the required submission information. Effect: Incorrect reports were submitted to the Federal granting agency. Recommendation: We recommend that any outdated information in the reports be removed in future reports. We also recommend that a separate individual review all fields and numbers, making sure that they are consistent with internal information and data. Views of Responsible Officials: Violence Free management has recently learned that federal entities still have the organization name listed as Minnesota Coalition of Battered Women in the PMS system, which has caused major delays with getting new staff and accountants? proper access to the grant systems. This has contributed to the delays with federal report filings. Management is currently working to get the Organization's name updated and also ensuring all data entered is verified by a second individual.

Condition: Violence Free Minnesota included sales tax in award expenditures. This was determined by viewed disbursement records, noting certain invoices where the Organization?s exemption from sales tax was not properly obtained from vendors. There was also an instance of depreciation being charged to the grant. Depreciation was no longer charged to the grant when new accounting staff properly changed the policy. Criteria: The Uniform Guidance allows and disallows certain costs for grant expenditure. Sales tax is not allowed (per 45 CFR 75.470(b)(1)(i)). Depreciation is allowed, but only if the assets depreciated are properly allocated to the grant award (per 45 CFR 75.436(a)). Questioned Costs: Known questioned costs are $184. Context: We tested 40 transactions charged to the grant. We noted 5 transactions charged to the grant that included sales tax. We noted one isolated instance in which depreciation was charged to the grant. Cause: Violence Free Minnesota has been transitioning staff and updating disbursement policies and practices. Prior employees were not aware of requirements. New staff are redesigning and implementing policies to address issues as they arise. Effect: Costs noted in "questioned costs" were charged to the grant that should not have been charged. Recommendation: The Organization and staff understand these findings and have taken appropriate action. We recommend that the staff continue to ensure that unallowable costs are detected before being allocated to grants. Views of Responsible Officials: Due to frequent turnover of administrative, management and accounting staff over the past year and a half, some invoices were charged to the grant with sales tax included. All staff and accountants are now diligently reviewing invoices and also have reached out to all vendors and provided the ST3 to ensure they no longer charge tax.

Condition: Violence Free Minnesota did not consistently ensure that expenses were in compliance or that controls were implemented to detect noncompliance. There were four instances where costs were not properly coded to grants. There were two instances of expenses not being approved, due to the cost supported by the bank statement with no other support. There were three instances of inconsistent monthly allocations with different cost allocation pools because costs were added to the accounting records afterwards. There was one instance of an expense being charged directly to the grant, where it normally is charged across multiple grants. There was one instance where an expense was approved but not paid, resulting in a vendor fine and double charge to the grant. Criteria: The Uniform Guidance requires that internal controls are designed and implemented in order to prevent or detect fraud and errors (per 45 CFR 75.303(a)). Internal controls help prevent compliance issues related to the grant, including using consistent cost allocation rate, using direct or another allocation method consistently with similar costs, and ensuring that costs are properly paid. Common internal controls include approving expenses, managing allocation of costs to programs, and approval of disbursement of funds. Context: Based on the explanation found in the ?condition? element, we found a total of 9 transactions out of 40 tested transactions that one or multiple issues. Cause: Weakness in implementation of internal controls over cost allocation. These findings appear to be concentrated at the beginning of the fiscal year, when management and accounting staff experienced turnover. Effect: Certain costs may have been improperly calculated. Controls did not ensure that costs were properly allocated, or approved when costs were auto-paid by the bank. Recommendation: Our recommendation is that the Organization take steps to address the finding. We recommend that the staff continue to address expense coding and allocation issues as they are detected. We also recommend documenting how to code and allocate expenses to achieve consistency. For example, if technology and accounting is always allocated using the ?FTE? rate to allocate expenses. We recommend documenting this if it is not otherwise noted on each invoice. Views of Responsible Officials: Due to significant turnover early in our fiscal year FY22, temporary and new staff members lacked understanding of proper internal controls and procedures. Violence Free management and outsourced accountants have taken the appropriate steps to ensure all costs are appropriately approved and allocated.

Condition: Violence Free Minnesota allocated payroll costs based on Payroll Activity Reports (PAR) for the current month. One instance was found in which payroll costs were based on an allocation from a prior month PAR. This occurred for one individual in the month. Criteria: The Uniform Guidance requires that payroll allocated to grants is based on PAR. Context: Finding affects major program transactions of which the PAR was utilized. The contracted accountant has been improving the payroll allocation process to be simpler and more consistent. The process may still be prone to error based on the manual nature of the control design. Cause: Staff did not update allocation based upon current month PAR. One PAR was missed when updating current month values. The discrepancy was not detected or prevented by the implemented internal controls. Effect: Potential over-allocation of payroll costs to the grant. Recommendation: We recommend that the personnel allocation reports and summary of payroll allocation of costs be reviewed by someone other than the preparer when allocating costs to grants. Views of Responsible Officials: Violence Free Minnesota understands the complexity of the payroll allocations, and in the Fall of 2022 began transitioning to a Coalition Manager software to help staff allocate their time across the appropriate grants. Coalition Manager software was fully implemented in February of 2023 for all staff. Accounting staff have already implemented a review process of all payroll cost allocations.

Condition: Violence Free Minnesota did not include required information in subrecipient contracts, including informing subrecipients of the possible need for a Single Audit and informing the subrecipients of the ALN of funding. This was determined by looking at subrecipient contracts, noting the absence of required information. There was also an absence of documentation showing that subrecipients were confirmed to be audited if required. This is a repeat finding from prior year. Criteria: Violence Free Minnesota is required to disclose certain information in grant agreements to subrecipients and verify that subrecipient are audited if required, as defined by 45 CFR 75.352. Context: This finding is isolated to the major program. The Organization has since ended the practice of passing funds to subrecipients due to the complexity of the requirements. Cause: Violence Free Minnesota was not directly made aware of these requirements by State agencies. The Organization did not ensure that they were following all required controls and procedures required by Uniform Guidance. Effect: Subrecipients did not receive required information which could result in inappropriate acceptance or reporting of the award. Recommendation: Review 45 CFR 75.352 and integrate required information into grant contracts to subrecipients. We noted that the Organization has discontinued granting funds to subrecipients until the Organization attains the technical proficiency to ensure that the requirements are met. Views of Responsible Officials: Violence Free was not directly made aware that the funding they were issuing to organizations as a part of this award to be treated as subrecipient contracts. Management has decided not to accept any future grants with this language until proper policies are procedures are in place as well as sufficient staff capacity to ensure adequate oversight.

Condition: During our audit, we noted that Violence Free Minnesota did not include required information in subrecipient contracts. This was determined by looking at subrecipient contracts, noting the absence of required information. There was also an absence of documentation showing that subrecipients were confirmed to be audited if required. Criteria: Violence Free Minnesota is required to disclose certain information in grant agreements to subrecipients and verify that subrecipient are audited if required, as defined by 45 CFR 75.352. Cause: Violence Free Minnesota was not directly made aware of these requirement by State agencies. In addition, the Organization was required to distribute this funding within short time frames within the restriction of COVID-19 deadlines of assistance. Effect: Subrecipients are not receiving required information which could result in inappropriate acceptance or reporting of the grant. Recommendation: We recommend that Violence Free Minnesota review 45 CFR 75.352 and integrate required information into grant contracts to subrecipients across the Organization.

Condition: During our audit, we noted that Violence Free Minnesota did not include required information in subrecipient contracts. This was determined by looking at subrecipient contracts, noting the absence of required information. There was also an absence of documentation showing that subrecipients were confirmed to be audited if required. Criteria: Violence Free Minnesota is required to disclose certain information in grant agreements to subrecipients and verify that subrecipient are audited if required, as defined by 45 CFR 75.352. Cause: Violence Free Minnesota was not directly made aware of these requirement by State agencies. In addition, the Organization was required to distribute this funding within short time frames within the restriction of COVID-19 deadlines of assistance. Effect: Subrecipients are not receiving required information which could result in inappropriate acceptance or reporting of the grant. Recommendation: We recommend that Violence Free Minnesota review 45 CFR 75.352 and integrate required information into grant contracts to subrecipients across the Organization.

Condition: In our testing, we noted that a small amount of costs were not properly calculated based upon indirect cost rates. Criteria: Costs should be properly calculated based on indirect cost rates being used based on cost principles. Cause: Cost rates were improperly applied to some small expenses. Effect: A small amount of questioned costs were found of $75. Recommendation: Ensure that costs are properly calculated throughout the year on all amounts either significant or insignificant.