The Villages, Inc.Non-Profit

2022-002 Maintenance of Written Procedures of Internal Control over Compliance (Significant Deficiency) Federal Agency: Department of Health and Human Services Program Name: Unaccompanied Alien Children Program Assistance Listing Number: 93.676 Award period: Year ended December 31, 2022 Condition: The Organization does not maintain written policies for the internal control over compliance of federal awards. Criteria: According to 2 CFR 200, Subparts D and E an Organization is required to maintain written policies for the internal control over compliance of federal awards. Cause: The Organization?s policies and procedures were not designed to include written policies for the internal control over compliance of federal awards. Questioned costs: None identified. Effect: The Organization's lack of written policies for the internal control over compliance of federal awards increases the risk of noncompliance of its major federal programs. Repeat Finding: N/a. Recommendation: We recommend that the Organization develop written policies for the internal control over compliance of federal awards. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop proper written policies for the internal control over compliance of federal awards.

2022-003 Review and Approval of Grant Expenditures (Significant Deficiency) Federal Agency: Department of Health and Human Services Program Name: Unaccompanied Alien Children Program Assistance Listing Number: 93.676 Award period: Year ended December 31, 2022 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Condition: We have determined that there was an inadequate design of internal control over the approval of grant expenditures during the fiscal year ended December 31, 2022. Criteria: An effective internal control system exists if controls are effective in preventing or detecting material misstatements and potential fraudulent activities in the cash disbursement and payroll process. It provides reasonable assurance for the safeguarding of assets, the reliability of financial information and compliance with laws and regulations. Cause: The Organization?s policies and procedures were not designed to ensure that all grant expenditures obtain proper approval and that evidence of that approval is maintained. Questioned costs: None identified. Perspective Information: Our expense testing revealed that of 16 nonpayroll samples selected for testing, there were 3 instances in which there was lack of evidence of review by the Executive Director. Effect: The Organization's lack of proper internal controls over approval of grant expenditures increases the risk of material misstatements and potential fraudulent activities. Repeat Finding: Yes. Prior year reference number - 2021-003. Recommendation: We recommend that the Organization implement controls and processes that ensure grant expenditures charged to the program are reviewed to ensure costs are allowable and properly supported. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges there is a control weakness as discussed above and will work to implement additional controls and reviews as recommended.

2022-004 Compliance and Controls over Reporting to the Department of Health and Human Services (Significant Deficiency) Federal Agency: Department of Health and Human Services Program Name: Unaccompanied Alien Children Program Assistance Listing Number: 93.676 Award period: Year ended December 31, 2022 Compliance Requirement: Reporting Condition: The Organization's internal control system did not detect that quarterly federal financial reports were not sent to the proper recipients on or before the due date. Criteria: An effective internal control system exists if controls are effective in preventing or detecting material noncomplaince of federal awards. Cause: Effective controls were not in place to ensure required reports were completed on or before their due date. Effect: The Organization's reports were sent to the proper recipients after their due date. Questioned costs: None Perspective Information: We tested two of the four federal financial quarterly reports required to be filed during the year ended December 31, 2022. Both reports tested were completed after their due date. Repeat Finding: N/a. Recommendations: We recommend policies and procedures over federal grant reporting be strengthened to ensure that proper controls are in place to ensure required reports are completed timely. Views of Responsible Officials: Management agrees with this finding and plans to develop proper written procedures to ensure timely reporting.

Finding 2021-003 ? Significant Deficiency Grant Program/Award ? U.S. Department of Health and Human Services, ALS Number 93.676, Unaccompanied Alien Children Program, Grant Award Number 90ZU0303-02-01 Prior Reference Number ? 2020-003 Compliance Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Condition ? Our expense testing revealed that of the 42 timesheets selected for testing, none of the employees had timesheets that showed evidence of review by the Executive Director or a supervisor. Additionally, of the 18 non-payroll samples selected for testing, there were 7 instances in which there was lack of evidence of review by the Executive Director. Criteria ? The Organization?s internal controls should be designed to ensure proper recordkeeping of expenses charged to the federal program and review of the documentation that supports expenses. Cause ? The Organization?s internal control processes didn?t include an after-the-fact check of individual expenditures, which would have allowed for monitoring of supporting documentation. Questioned Costs ? None identified. Effect ? Unallowed costs could be charged to the federal program. Recommendation ? We recommend that the Organization implement controls and processes that ensure that expenditures charged to the program are reviewed to ensure costs are allowable and properly supported. Management?s Response/Corrective Action Plan (Unaudited) ? The Villages, Inc. has implemented a new time sheet program that allows payroll staff to track supervisor approvals. Payroll is not processed until all supervisor approvals have been completed. The Finance Manager and Executive Director also review the payroll process at additional times during the payroll process. All non-payroll expenses must be approved by the Executive Director prior to payment. Approvals are documented either via physical signature or email. Contact Name ? Kaleena Harmer Expected Completion Date ? 08/31/2022

Corrective Action Plan for Finding 2020-003 Managementa??s Response: Management agrees with this finding. Corrective Action Plan: A new timeclock system has been implemented that has the ability to produce a report that shows each timecard has been approved by the department managers. After payroll has been balanced in Netsuite and before the payroll has been sent to Ceridian for completion, the Executive Director will review and sign the payroll. Payroll will be finalized by the Finance Manager or Bookkeeper after the Executive Director has approved it. All invoices will be read and approved by the Executive Director prior to signing checks. Contact Person: Sue Rohleder Expected Completion Date: 11/30/2021

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