Save the Michael's of the World

Condition –Within the last two years, the Organization did not perform a physical inventory over fixed assets purchased with federal grant funds. Criteria – The Uniform Administrative Requirements require non-federal entities to establish and maintain adequate property management systems for equipment acquired with federal funds. Specifically, such systems must include: recordkeeping that includes a description of the property, acquisition date, cost, other identifying information; physical inventories of equipment at least once every two years, with results reconciled to property records; and other controls to safeguard assets and prevent loss, damage, or theft. Effect – Failure to maintain adequate controls over fixed assets increases the risk that federally funded equipment may be lost, stolen, misused, or not used for authorized purposes. Recommendation – We recommend that the Organization strengthen its controls over federally funded fixed assets by performing physical inventories of all fixed assets at least biennially, with results reconciled to the fixed asset records; tagging all newly acquired fixed assets with a unique identification number at the time of acquisition; and establishing written policies and assigning responsibility to ensure ongoing compliance with requirements. Management's Response – See management's corrective action plan on pages 32-33.

Condition – During testing of 40 employees within the State Opioid Response Program, one employee did not have formal documentation supporting an authorized pay rate for the year ended December 31, 2024. Criteria – Pay rate authorizations and any approved changes should be properly documented and retained in each employee’s personnel file for reference and verification. Effect – The Organization was unable to substantiate a pay rate increase awarded to one of the 40 employees that we tested for the year ended December 31, 2024. Recommendation – We recommend that the Organization ensure all pay rate authorizations and subsequent pay rate changes are formally documented and maintained within each employee’s personnel file. Management's Response – See management's corrective action plan on pages 32-33.

Condition – The Organization did not complete the audit of its major federal award programs within the required timeframe and did not submit the Data Collection Form to the Federal Audit Clearinghouse by the deadline for the year ended December 31, 2024. Criteria – Entities that expend more than $750,000 in federal awards during a fiscal year are required to complete a Single Audit and submit the associated reporting package to the Federal Audit Clearinghouse within nine months of year end (September 30, 2025). Effect – The Organization was not in compliance with federal Single Audit reporting requirements. Recommendation – We recommend that the Organization establish and implement policies and procedures to ensure timely preparation of records and timely engagement of an audit firm so that the Single Audit can be completed and submitted within the required federal deadlines each year. Management's Response – See management's corrective action plan on pages 32-33.

Condition – The Organization did not have written policies and procedures in place that define its procurement requirements. Procurement practices were not formally documented, resulting in inconsistent application of procurement standards. Criteria – Under the Uniform Administrative Requirements (2 CFR 200.318–200.326), non-federal entities must establish and maintain written procurement policies and procedures that reflect applicable Federal, State, and local laws and regulations. These policies must address competition, methods of procurement, contract oversight, and other required elements. Effect – Without documented procurement policies and procedures, the Organization is at increased risk of noncompliance with federal procurement standards, inconsistent procurement practices, inadequate competition, and potential misuse of federal funds. Recommendation – The Organization should develop and implement written procurement policies and procedures that comply with the Uniform Guidance. Policies should clearly define procurement thresholds, required documentation, competitive bidding requirements, and approval responsibilities. Staff should be trained on the finalized procedures to ensure consistent and compliant application. Management's Response – See management's corrective action plan on pages 32-33.

Condition – Out of 40 employees tested in the State Opioid Response Program, we noted one selection in which the employee’s hours worked per their time sheet did not agree to the hours paid per the corresponding pay statement during the year ended December 31, 2023. Criteria – Employee time sheets should be reviewed and approved, with any required corrections made prior to the payroll check date. Effect – Incorrectly recording employees’ hours worked may result in discrepancies and errors in employee payroll payments. Recommendation – We recommend that the Organization review all policies and procedures regarding their payroll processes with key staff and that the Organization emphasize the importance of thorough review of time sheets, accurate data entry into payroll systems, and prompt correction of any errors identified. Management's Response – See management's corrective action plan on page 30.

Condition - Out of 40 employees tested in the State Opioid Response Program, two employees did not have formal documentation of pay rate authorizations for the year ended December 31, 2022. Criteria - Documentation of pay rate authorizations should be maintained within each respective employee personnel file for future reference. Effect - Out of the 40 employees tested, the Organization could not substantiate pay rate increases awarded to two employees during the year ended December 31, 2022. Recommendation - We recommend that the Organization formally document pay rate authorizations and any subsequent pay rate changes within each employee's personnel file. Management's Response - See management's corrective action plan on pages 28 - 29.