Project H.O.O.D. Community Development CorporationNon-Profit

Condition: Amount of salaries allocated to federal programs are not consistently supported by employee timesheets or other similar documentation. Criteria: Reports reflected the distribution of activity of each employee must be maintained for all staff members whose compensation is charged, in whole or in part, directly to awards, in accordance with Cost Principles for Non-Profit Organizations (2 CFR Part 230.8). Internal controls should be in place that provide reasonable assurance that salaries for employees charged to the federal programs are properly documented and reconciled to ensure that they are accurate, allowable, and properly allocted. Cause: There are limited procedures in place that require reconciliation of actual hours expended to the program. Effect: Since employee salaries were not reconciled to corresponding timesheets, it is possible that employees' time and related costs may be inappropriately allocated amongst functional activities, including cost allocations to federal awards program. This could result in noncompliance with the Uniform Guidance. Context: This condition occurred in 12 out of 60 payroll transactions selected for testing. Total payroll transactions changed to the program were $726,864, of which $106,986 were slected for testing, representing 19 different employees. Recommendation: Existing timesheet reconciliation procedures should be revised. The organization should reconcile employee timesheets to amounts allocated to the grants on, at minimum, a quarterly basis, and ideally, on a monthly basis prior to the submission of vouchers or funding requests. Views of Responsible Officials and Planned Corrective Actions: The Organization will review its procedures and make appropriate changes. The Organization accepts the recommendation.

Condition: The SEFA submitted for the year ended December 31, 2023 was found to be incomplete. Criteria: Organizations are required to prepare a SEFA that includes all federal awards received and expended during the fiscal year. The SEFA must be complete and accurate to ensure compliance with federal reporting requirements. Cause: The inaccurate reporting of these federal awards appears to be due to lack of communication and oversight in data collection. Effect: The incomplete SEFA may lead to noncompliance with federal regulations, potentially resulting in loss of funding. Recommendation: The Organization should review its procedures for putting together the SEFA and ensure that there is a reconciliation with the general ledger and vouchers to ensure the SEFA is complete. Views of Responsible Officials and Planned Corrective Actions: The Organization will review its procedures and make appropriate changes. The Organization accepts the recommendation.

Condition: The audit reporting package and data collection form for the year ended December 31, 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: The audit was not completed as of the submission due date. Effect: The Organization does not qualify as a low-risk auditee. Recomendation: The Organization should submit the audit reporting package and data collection form as soon as the audit is available. Views of Responsible Officials and Planned Corrective Actions: The Organization will review its procedures and make appropriate changes. The Organization accepts the recommendation.

Condition: Amount of salaries allocated to federal programs are not consistently supported by employee timesheets or other similar documentation. Criteria: Internal controls should be in place that provide reasonable assurance that salaries for employees charged to federal programs are appropriately documented and reconciled. Cause: There are limited procedures in place that require reconciliation of actual hours expended to the program. Effect: Since employee salaries were not reconciled to corresponding timesheets, it is possible that employees' time and related costs may be inappropriately allocated amongst functional activities, including cost allocations to federal awards program. This could result in noncompliance with the Uniform Guidance. Context: This condition occurred in 5 out of 60 payroll transactions selected for testing. Total payroll transactions charged to the program were $532,634, of which $87,162 were selected for testing, representing 30 different employees. Recommendation: Existing timesheet reconciliation procedures should be revised. The organization should reconcile employee timesheets to amounts allocated to the grants on, at minimum, a quarterly basis, and ideally, on a monthly basis prior to the submission of vouchers or funding requests. Views of Responsible Officials and Planned Corrective Actions: The Organization will review its procedures and make appropriate changes. The Organization accepts the recommendation.