Carroll County Youth Service Bureau, Inc.

Federal Agency: Department of the Treasury Federal Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Pass-Through Entity: Commissioners of Carroll County Identification Number: 26-F-3-2122-3441-CCYSB Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control; Noncompliance Criteria: Supporting documentation for all reports required to be filed for federal programs should reconcile to the reported amounts, and all required report categories must be included. Condition: The programmatic reports that were selected for testing and filed with the Commissioners of Carroll County did not have supporting documentation maintained or that reconciled to the reported amounts, and one of the programmatic reports tested omitted a required category. Cause: Programmatic report data is compiled by the Program Director from the Organization’s patient data system and provided to the Grants Manager, who formats the data for reporting. However, the review process is not sufficiently detecting and correcting errors before report submissions. Effect or Potential Effect: Misinformation presented to the federal government may lead to federal inquires of those charged with governance. Context: Testing of two quarterly programmatic reports under the federal program revealed multiple key line items where supporting documentation did not match the reported amounts. These discrepancies were primarily due to miscalculations from the source data, rather than the use of incorrect or omitted data. Additionally, the quarter three report was missing a key line item. Recommendation: The Organization should maintain any and all support utilized in the preparation of federal programs with a copy of the report submitted to the County. We recommend that the raw data, excluding any sensitive patient information, be summarized to clearly support the reported totals. The Grants Manager should review the supporting data provided by the Program Director carefully in order to ensure that reported amounts accurately represent a program performance. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.

Criteria: Financial reports should be prepared on the same basis of accounting as the basic financial statements. Condition: Financial reports submitted under the grant with the Commissioners of Carroll County were prepared on the cash basis of accounting. Cause: The Organization maintains their books and records on the cash basis of accounting throughout the fiscal year and doesn’t account for accruals until year end. Effect or Potential Effect: Reporting unallowable costs can result in having to return the funding or termination of funding. Context: The financial reports tested were prepared using the cash basis numbers for the quarter, not taking into account any accruals because it was believed all grant-related reporting was done on the cash basis of accounting. Recommendation: The Organization should begin keeping their accounting records on the accrual basis of accounting throughout the fiscal year. This will ensure the correct financials are being reported for federal programs. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.

Criteria: The methodology for allocations must follow the requirements outlined in Subpart E, Cost Principles in Title 2 U.S. CFR Part 200, Uniform Guidance. The Uniform Guidance stipulates that allocations for payroll related expenses should be based on actual time spent on the grant program. In order for allocations to be tested, support for the allocation methodology needs to be maintained. Condition: Payroll expenses are allocated to the federal grant based on an annual estimate of the time that will be spent on the grant. Support is not maintained for the testing of non-payroll indirect expenses. Indirect costs allocations are updated periodically depending on the balance remaining on grants and other factors. A copy of the allocations is not maintained. Cause: The Organization uses a spreadsheet to calculate the allocations which is updated each quarter based off the remaining balance of grants and other factors. Each quarter’s spreadsheet is not saved. Additionally, the Organization’s timesheets are not broken down by program, so payroll expenses are not allocated based off actual time spent on the grant program. Effect or Potential Effect: The federal grant could be overcharged, resulting in the Organization being required to return funds. Context: Salaries and other payroll costs are allocated based off an annual estimate of time they will spend on the grant, not actual time spent on the grant program. Additionally, 33 out of the 40 non-payroll costs tested where indirect expenses whose allocations were not able to be tested because support is not maintained. Recommendation: The Organization should have staff earmark their timesheets with the number of hours worked on each program. Additionally, we recommend that a copy of the allocation spreadsheet that is used be maintained each pay period so allocations can be supported. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.

Criteria: Expenditures of federal awards must be for allowable costs as outlined in the respective grant agreements and must follow Subpart E, Cost Principles in Title 2 U.S. CFR Part 200, Uniform Guidance. Expenditures claimed for reimbursement during the year should be recorded on the same basis of accounting as the basic financial statements. Condition: Expenditures requested for reimbursement include unallowed amounts based on the budgets in the grant agreements, amounts outside of the grant period and costs unallowed by the Uniform Guidance. Cause: The Organization maintains their books and records on the cash basis of accounting throughout the fiscal year and doesn’t account for accruals until year end. Amounts are being requested that are not a part of the approved budget. Effect or Potential Effect: Claiming unallowable costs can result in having to return the funding or termination of funding. Known Questioned Costs: $18,170 Context: Of expenses tested, the Organization claimed $5,000 of liability insurance for reimbursement which is not a part of the approved budget. Additionally, the Organization requested $12,000 of mortgage payments as rent expense under the grant. There were also $1,170 of expenses that related to months outside the budget period and were not corrected through accrual entries at year end. Amounts reported as known questioned costs correlate to the errors found during the testing of the Schedule of Expenditures of Federal Awards and are reported in total. Reimbursement was requested and received for worker’s compensation and liability insurance which was part of the 2024 fiscal year. Recommendation: The Organization should begin keeping their accounting records on the accrual basis of accounting throughout the fiscal year. This will ensure that costs claimed for reimbursement will only include expenditures applicable to the reporting period. Also, the Organization should review the grant budgets to ensure they are capturing only allowable costs under each grant program and propose budget modifications to the grantor as deemed necessary. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.

Criteria: Supporting documentation must be maintained for all reports required to be filed for federal programs and should match the reported amounts. Condition: Supporting documentation did not match the reported amounts for reports required to be filed with the Commissioners of Carroll County (pass-through entity ID #CRRL/SSA 19-003-A2). Supporting documentation was not maintained for reports required to be filed with the Carroll County Department of Social Services (passthrough entity ID #CRRL/FIA 23-002). Cause: Internal changes were made to data and not updated on the report sent to the County Commissioners (pass-through entity ID #CRRL/SSA 19-003-A2). Data is entered into the Organization’s software by program employees and is accumulated and reported quarterly to the County Department of Social Services (pass-through entity ID #CRRL/FIA 23-002). The employees preparing reports do not always save the data that was extracted for the report and the data was unable to be replicated during testing. Effect or Potential Effect: Misinformation presented to the federal government may lead to federal inquires of those charged with governance. Context: The programmatic reports selected for testing (two quarterly reports) for both grants under the federal program, did not have supporting documentation for key line items. The grant with the Commissioners of Carroll County (pass-through entity ID #CRRL/SSA 19-003-A2) had two key line items on the Quarter 2 report where support did not match the reported amounts. The Carroll County Department of Social Services reports did not have supporting documentation for five out of eight key line items on both quarters tested (pass-through entity ID #CRRL/FIA 23-002). Recommendation: The Organization should maintain any and all support utilized in the preparation of federal programs and ensure that any modifications made are reflected in the reports. Documentation of the methods used to extract client data should also be maintained. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.