BETHEL FAMILY RESOURCE CENTERNon-Profit

View of responsible officials and corrective action plan: On March 20, 2020, additional (legitimately signed) stipend forms were scanned and submitted via email to Mr. Mike Jackson to account for some of the missing stipend forms in question. At that point, the DOL findings report was complete and could not be factored against the $58,300 in questioned costs. How stipends were processed: Trainees were paid stipends via Paycards. Each trainee had to complete a direct deposit form generated by Paychex (an outside payroll processing company) to assure that funds were deposited onto trainees individual Paycards. Paycards where mailed directly to the home address of each trainee from Netspend Skylight (the company that produces the Paycards). Skylight works directly with Paychex to load payments on the cards. Therefore, no staff person at Bethel Family Resource Center has access to a trainees Paycard. Paycard amounts are calculated based on trainee attendance, which is computed by the Project Director who would submit a bi-weekly report to the Program Director with a spreadsheet showing the amount due each trainee. This information would then be submitted to Paychex for processing for Paycard loading. During the monitoring visit, it was discovered that the paperwork needed to process the stipends by the Project Director was unsatisfactory. We believe that the acts of the Project Director were an attempt to cover the fact that he was not doing his job adequately and there was no financial benefit obtained by him because of his actions. We also understand that better internal controls?at least spot checking?could have prevented this situation from escalating instead of assuming that his 8+ years of working YouthBuild programs would assure that he would handle stipend paperwork correctly. Our agency has taken reasonable measures, given the level of risk, to institute internal control procedures to mitigate risks. We have since implemented numerous checks and balances to improve our internal controls and believe that our controls, at minimum, meet those outlined in 2 CFR 200.302(b)(4). This situation was an eye-opener for us. Although due to our small size and limited staff, we may not have instituted internal control procedures on the same level as larger, more complex agencies, our internal controls regarding stipends in the past have worked well for us. Unfortunately, in this instance, it caused us not to dedicate sufficient attention to the processing of stipend paperwork as we should have. However, we implemented new policies and procedures to adopt preventative and detective activities to ensure that we have adequate internal controls related to stipends. (See attached.) Understanding, that documentation was handled improperly by the Project Director, we would like to submit as a response and for additional consideration, copies of the direct deposit forms submitted to Paychex signed by each trainee, along with copies of payroll journals from Paychex to show that each trainee was paid lawfully. Revised stipend policy is attached.

View of responsible officials and corrective action plan: General journal is attached to show evidence of accruing compensation properly. This will be reflected on our ETA-9130 report beginning with the quarter ending 03/31/2020, which is scheduled to be submitted on May 13, 2020.