Alice Ferguson Foundation, Inc.

The Uniform Guidance requires that entities that expense $750,000 or more in a year in Federal awards must submit their audited annual financial reports and data collection form to the Federal Audit Clearinghouse within thirty (30) days after receipt of the auditor’s report, or nine (9) months of the close of the auditee’s fiscal year. The fiscal year 2021 audit work did not commence until August 2023. Several issues impacted the late submission of the audit including internal senior accounting staff turnover, a change in external accounting firms, and unforeseeable delays with the previous audit firm, causing 2020 audit fieldwork delay. All of these issues were affected and compounded by the COVID-19 pandemic. We recommend the Foundation complete all reports required under the Federal award document and submit the reports in a timely manner. The Foundation should improve financial close-out procedures and obtain the audit required under the Uniform Guidance within nine (9) months of the fiscal year end.

Recording of expenses in the incorrect period Audit Results: 66.466 Chesapeake Bay program Expenses should be recorded in the period in which goods are received or services are provided. For the major program auditors noted expenses of $51,375 that should have been recorded in 2019. In addition, during revenue and net assets testing we noted additional federal expenses of $494 that should have been recorded in 2019. All of these expenses are reimbursable and thus there is also an impact on revenue. Total questioned costs were $51,869. It is critical for revenue and expenditures to be accurate as federal agencies rely on financial reports to ensure that recipients are meeting their expectations. Inaccurate reports could result in a decrease in future funding. The effect of these errors is that federal and other expenditures are not accurately reported and this could affect the ability to receive future funding. There was a significant amount of turnover with the outsourced accounting firms and Foundation accounting personnel. This caused gaps in communications and errors in recording transactions. In addition, invoices were received late. Recommendation: We recommend that management carefully review all expenditures going forward and record them in the period in which they are incurred. If necessary they should accrue an estimated amount for any expenses incurred for which invoices have not been received prior to closing the reporting period. Views of Responsible Officials and Planned Corrective Actions: The Foundations finance team records expenses in the period in which goods are received and services are provided.

Discrepancies in timesheets and payroll allocations Criteria: Payroll expenses should be recorded based on the hours worked on each program per the timesheet and the approved salary rate for each employee. Condition: Five discrepancies were noted between the payroll allocation based on the timesheets and the actual payroll allocation recorded in the general ledger for both programs. The discrepancies ranged from $2-$10, but occurred in multiple pay periods. The sample consisted of 40 payroll transactions selected using statistical sampling and the number of discrepancies resulted in a significant deficiency. Questioned Costs: None Context: It is critical for revenue and expenditures to be accurate as federal agencies rely on financial reports to ensure that recipients are meeting their expectations. Inaccurate reports could result in a decrease in future funding. Effect: The effect of these miscalculations is that the federal expenditures reported are not accurately reported. Cause: There was a significant amount of turnover with upper level management and the Foundation switched to an outsourced accounting firm. At times they were short-handed in the accounting department and this caused gaps in communications and errors in recording transactions. Recommendation: WE recommend that management carefully review the payroll allocations going forward and ensure they are in agreement with the related timesheets.