FirstFollowersNon-Profit

Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 20220245; 02220246; 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 3/1/2022-12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: Code of Federal Regulations (CFR) § 200.303(a) indicates nonfederal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Lack of supporting documentation showing management's review and approval of costs as being allowable under the grant terms. Also, an expense was charged to the grant in error. Questioned costs: $16. Context: For 36 of the 60 allowable general disbursement cost transactions selected for testing, there was no documentation showing management's review and approval of the expense as being allowable. For 1 of the 60 general disbursement costs transactions selected for testing, it was charged to the grant in error, causing it to be a questioned cost. Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation. Effect: If costs are not reviewed and approved as being allowable, it could result in unallowable costs being charged to federal grants. Repeat Finding: Repeat Finding of 2023-005. Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show the review and approval of expenses charged to grants, prior to drawing down grant funds. Views of responsible officials: The Organization will continue to review all documentation and ensure proper signatures accompany the documentation going forward.

Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 20220245; 02220246; 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 3/1/2022-12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: § 200.214 Suspension and debarment indicates nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The Organization did not perform the search of suspension and debarment, so it did not meet the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate suspension and debarment process. Questioned costs: N/A Context: 4 of 4 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: Repeat Finding of 2023-004. Recommendation: We recommend the Organization revised its internal controls related to suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization has added a Procurement, Suspension and Debarment policy and will continue to verify contractors as required. The Organization will improve on documentation procedures for these verifications.

Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2022-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: CFR § 200.329 indicates that the nonfederal entity is responsible for oversight of the operations of the Federal award supported activities. The nonfederal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Condition: The Organization did not have an independent review occurring where it could maintain supporting documentation showing an independent review and approval was occurring prior to the financial reports being filed. Questioned costs: N/A Context: For 4 of 8 financial reports selected for testing did not have an independent review occurring so there could be evidence of an independent review occurring prior to the financial report being filed. Cause: Error by management in having the reports reviewed by someone other than the preparer. Effect: Incorrect or inaccurate reports could be filed if they are not reviewed prior to being filed. Repeat Finding: Repeat Finding of 2023-006. Recommendation: We recommend the Organization revise its internal controls to require an independent review of financial and performance reports prior to the reports being filed. The Organization should also ensure appropriate supporting documentation is maintained which shows the person who completed the review as well as the date the review was completed. Views of responsible officials: The Organization will ensure the grant reports are reviewed by a separate individual prior to submitting to funders and document those reviews accordingly.

Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois Pass-Through Number(s): 20220245; 20220246 Award Period: 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 12/15/2023-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Code of Federal Regulations (CFR) §200.303(a) indicates nonfederal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Lack of supporting documentation showing management's review and approval of costs as being expensed in the proper grant period. Questioned costs: N/A Context: For 24 of the 35 disbursements tested there was no documentation showing management's review and approval of the expense as being in the proper grant period. Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation. Effect: If costs are not reviewed and approved, it could result in incorrect costs being charged to federal grants. Repeat Finding: N/A Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show invoices were reviewed before paid. Views of responsible officials: The Organization will review our procedures surrounding ensuring that the proper accounting period is recorded for each transaction to identify any failures in the process.

2023-004 – Procurement, Suspension and Debarment Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; Illinois Criminal Justice Information Authority Pass-Through Number(s): 20220246 - 2023; 20220245 - 2023; 822007 - 2023 Award Period: 3/1/22-12/31/23; 3/1/22-12/31/23; 3/1/22-12/31/24; 4/1/22-6/30/23 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: CFR § 200.320 indicates the various methods of procurement to be followed. The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and § 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. § 200.214 Suspension and debarment indicates non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The Organization did not have a procurement policy or suspension and debarment policy in place which was consistent with the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate procurement process. Questioned costs: N/A Context: 5 of 5 vendors selected for procurement testing, did not have documentation showing that the cost had been procured in accordance with the Uniform Guidance. Additionally, 2 of 2 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate procurement, suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: No Recommendation: We recommend the Organization revised its internal controls related to procurement, suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization is in the process of developing a procurement policy and suspension and debarment policies that aligns with Uniform Guidance.

2023-005 – Allowable Costs and Activities Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; Illinois Criminal Justice Information Authority Pass-Through Number(s): 20220246 - 2023; 20220245 - 2023; 822007 - 2023 Award Period: 3/1/22-12/31/23; 3/1/22-12/31/23; 3/1/22-12/31/24; 4/1/22-6/30/23 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: Code of Federal Regulations (CFR) § 200.303(a) indicates non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Lack of supporting documentation showing management's review and approval of costs as being allowable under the grant terms. Questioned costs: N/A Context: For 33 of the 60 allowable general disbursement cost transactions selected for testing, there was no documentation showing management's review and approval of the expense as being allowable. For 3 of 18 allowable payroll disbursement cost transactions selected for testing, there was no documented approval of the employee's rate to support the rate was correct for the expense incurred. Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation. Effect: If costs are not reviewed and approved as being allowable, it could result in unallowable costs being charged to federal grants. Repeat Finding: No Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show the review and approval of expenses charged to grants, prior to drawing down grant funds. Views of responsible officials: It is the policy that either Marlon Mitchell or James Kilgore approve expenditures of the programs. FirstFollowers is not in the habit of initialing the invoices, so we will purchase a stamp to provide physical evidence that the invoice requests and/or receipts have completed the review steps. Either Marlon or James will date/initial with the approval stamp. All the contractors and employees have a yearly review of their salary and/or hourly rates. Those contracts are written and kept in the files of FirstFollowers and were provided to Clifton Larson Allen upon request. We will continue to update these contracts each fiscal year and ensure that the contracts are reviewed by the Board of Directors and noted in the minutes.

2023-006 – Reporting Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Champaign County, Illinois Pass-Through Number(s): None Reported Award Period: 3/1/22-12/31/24 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: CFR § 200.329 indicates that the non-federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Condition: The Organization did not have an independent review occurring where it could maintain supporting documentation showing an independent review and approval of the H3 grants was occurring prior to the reports being filed. Questioned costs: N/A Context: For 2 of 8 reports selected for testing did not have an independent review occurring so there could be evidence of an independent review occurring prior to the report being filed. Cause: Error by management in having the reports reviewed by someone other than the preparer. Effect: Incorrect or inaccurate reports could be filed if they are not reviewed prior to being filed. Repeat Finding: No Recommendation: We recommend the Organization revise its internal controls to require an independent review of financial and performance reports prior to the reports being filed. The Organization should also ensure appropriate supporting documentation is maintained which shows the person who completed the review as well as the date the review was completed. Views of responsible officials: Company-wide reports are submitted monthly to the Board of Directors for approval. Reports that are submitted are separated by grant, so that the Board of Directors can see the activity in each grant for each month during the fiscal year. The reports submitted to the funders by Marlon Mitchell are taken from the financial reports that are approved by the Board of Directors. In addition, Marlon does not enter the financial information, nor does he prepare the monthly reports submitted to the Board. He serves as a fourth set of eyes on the information before the reports are submitted to the funders. Khayriyah Mitchell enters all of the revenue and expenditures into the accounting system, Shanelle Herman reconciles the bank and credit card accounts and runs the reports for the Board of Directors, the Board reviews and approves the financial statements, and Marlon Mitchell uses the approved financial information to create the reports to the grant funding agencies.