William Wendt Center for Loss and Hearing

Finding No. 2021-001: Internal Control over Preparation of Schedule of Expenditures of Federal Awards (?SEFA?) ? Material Weakness in Internal Control over Compliance Department of Justice, Pass-through from DC Office of Victim Services, Assistance Listing No. 16.575, Crime Victim Assistance, Grant # 2021-VOCA-13 Criteria: Uniform Guidance prescribes the required Schedule of Expenditures of Federal Awards (SEFA) contents and delineates how or what is deemed to be expenditures for purposes of completing the SEFA. Condition: The total award amount for Wendt Center?s VOCA grant for award period October 1, 2020 to September 30, 2021 was $1,387,326, which came from two funding sources: $1,008,626 was a local appropriation from the District of Columbia and the remaining $379,000 was a pass-through from the Federal government. Wendt Center included the full amount of the VOCA grant in the SEFA but should have only included the amount that was a pass-through of federal funds. Context: In previous years the VOCA grant was funded by the DC government entirely with pass-through funds from the Federal government. For the award period October 1, 2020 to September 30, 2021, the grantor noted that the grant source was both local appropriations and Federal funding but did not indicate a breakdown of dollars in the grant agreement. However, the DC government provided this breakdown in a separate e-mail communication with Wendt Center in helping Wendt Center in calculating the appropriate match as only the pass-through of federal funds were to be matched. Cause: The source of the grant funding changed and there was no formal process to ensure that this was communicated to the accounting department so it was properly recorded in the general ledger. Effect: The effect of inaccurate information on the SEFA can lead to improper selection of major programs and incorrect reporting on the Data Collection Form submitted to the Federal Single Audit Clearinghouse. Questioned Costs: None. Recommendation: To ensure adequate internal controls over the preparation of the SEFA, we recommend that Wendt Center enhance internal control and implement financial controls and procedures to ensure that when an award is received from the DC government or other granting agencies the source of the funds (i.e. local appropriations or Federal pass-through funds) is identified, documented and communicated to the accounting department so that the funding can be tracked and properly reported on the SEFA.

Criteria: The allowable costs principles require that payroll charges be based on records that accurately reflect the work performed. Although budgets are permitted during the period, changes are to be identified in a timely manner and the financial records updated as part of a financial close process. Condition: Wendt Center allocated payroll to the federal grants using budgeted employee time instead of using the actual time reported on the employees timesheets and there was no reconciliation performed to ensure that the time charged to the federal award accurately reflected the actual time incurred. Context: Grants where time was charged to any of Wendt Center?s federal grants used budgeted staff time during the year ended September 30, 2020. In addition, this applies to any of the match related to the VOCA grant that was related to salary expense. The accounting department did meet with program staff on a monthly basis to review time allocations to the grants so the allocations in total were reviewed and approved. In addition, Wendt Center did not exceed the salary budget for the federal grants. The timesheets reviewed showed instances where Wendt Center overcharged the grant as well as undercharged the grant and in all cases the actual time percentages were not significantly different from the budgeted time charged to the grant. Cause: Wendt Center has always used timesheets to allocate employees time. Due to staff turnover in the Accounting Department during the year ended September 30, 2020, a reconciliation of the time reported to the federal agencies and the actual time recorded on the employees? timesheets was not performed. Effect: The related salary charges could be incorrect and ultimately disallowed. Questioned Costs: None. Recommendation: We recommend that the Wendt Center enhance the internal control process over the financial close process focusing on the use of the employee timesheets to allocate time. If budgets are used in the process during the year, Wendt Center should ensure that the budgeted allocations are reconciled to the employee timesheets in a timely manner ensuring the completeness and accuracy of the amounts submitted for reimbursement. Views of Responsible Officials: See corrective action plan.