Baltimore Crisis Response, Inc.Non-Profit

Department of Health and Human Services Block Grants for Community Mental Health Services – Assistance Listing No. 93.958 2024-002 Proper Identification of Federal Awards on the Schedule of Expenditures of Federal Awards Condition: The Schedule of Expenditures of Federal Awards (SEFA) was not a complete and accurate presentation of all federal grant funding. Criteria: The process of preparing a complete and accurate SEFA is considered a key control over compliance with federal regulations Cause: One significant grant was not included on the SEFA prepared by management. Management originally believed the grant was state funded, but upon further communication with the grantor, it was discovered to be federal funding. Effect: A grant in the amount of $501,832 was not included on the SEFA. The grant was part of a major program requiring additional audit testing. The grant was subsequently added to the SEFA. Recommendation: Our recommendation is to inquire of the grantor and receive confirmation in writing whether an award is federal or state funded and if federal, request the assistance listing number. View of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding. Unless the funding source is clearly stated in the grant agreement, the Organization will inquire of the grantor in writing to document the funding source and assistance listing number, if necessary.

Condition: The Organization's Schedule of Expenditures of Federal Awards (SEFA) was inaccurately presented the federal expenditures for the federal awards. The identified misstatements were corrected in the accompanying SEFA and had no impact on the financial statement amounts. Criteria: Internal controls should be in place to provide reasonable assurance that the SEFA is prepared in accordance with the Uniform Guidance. The Uniform Guidance, at 2 CFR section 200.508(b), requires, the Organization to prepare appropriate financial statements, including the SEFA. Cause: Reconciliation to the related expenditures from federal awards was not performed and would have identified the noted misstatement in the SEFA. Effect: Lack of effective controls in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected in a timely manner. Recommendation: The Organization should have effective internal controls in place to ensure that the SEFA is accurately prepared and reconciles to the related revenues and expenses recorded in the financial statements. Views of Responsible Officials and Planned Corrective Actions: BCRI will examine each contract and prepare a schedule of all Uniform Guidance awards at the beginning of each fiscal year, and, if necessary, contact the funder if not readily apparent whether the program is through federal funds. As new awards are received during the fiscal year the SEFA will be updated. At fiscal year end the finance team will reconcile the SEFA schedule to the 440s or other reporting documents required for federal awards to ensure all expenditures reported have been included on the SEFA. In FY20, the identified items were corrected in the accompanying SEFA and had no impact on the financial statement amounts.

Condition: The Organization was not aware that awards from agencies were pass through federal funds; thus the Organization did not prepare a Schedule of Expenditures of Federal Awards (SEFA). The pass through awards were identified and included in the accompanying SEFA and had no impact on the financial statements amounts. Criteria: Internal controls should be in place to identify federal funds and to provide reasonable assurance that the SEFA is prepared in accordance with Uniform Guidance. The Uniform Guidance, at 2 CFR section 200.508(b), requires, the Organization to prepare appropriate financial statements, including the SEFA. Cause: The Organization was not aware that funds received from pass-through organizations were federal funds. Effect: Failure to recognize federal awards could cause the SEFA and the Data Collection Form to contain material differences in the amount of federal funds expended or cause the SEFA and Data Collection Form not to be filed at all. Recommendation: Appropriate written policies and procedures should be implemented to ensure all federal funds are identified and included on the SEFA. Views of Responsible Officials and Planned Corrective Actions: Prior BCRI Uniform Guidance funding has fallen below the $750,000 reporting requirement. Typically BHSB funding for Detox services is through the State and therefore BCRI remained under the Uniform Guidance threshold. In FY19, two smaller BHSB detox grants were determined to be via federal funding, thereby triggering Uniform Guidance reporting. All information for these programs was accurately reported. BCRI will examine each contract and prepare a schedule of all Uniform Guidance awards at the beginning of each fiscal year, and, if necessary, contact the funder if not readily apparent whether the program is through federal funds. BCRI will include this review in its fiscal policies & procedures.