TRUST FOR THE AMERICASNon-Profit

Finding Number: 2019-001 Prior Year Finding Number: 2018-002 Compliance Requirement: Activities Allowed or Unallowed, Allowable Cost/Cost Principles -Payroll Activities Information of Federal Program - CFDA Number: 98.000 ?A New Path?: Promoting a Healthy Environment and Productive Alternatives for Juvenile Remandees and Offenders in Jamaica Award Number: AID-532-IO-14-00001 Award Year: 01/13/2017 ? 03/31/2020 Criteria ? The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? During our test work on payroll transactions, we noted that for 1 ($4,000) out of the 3 payroll samples selected for testing, the Trust did not have employee?s timesheet to support the actual time spent and charged to the federal grant under audit. The Trust implemented the preparation of employee timesheets during fiscal year 2019. However, we also noted that for 2 ($15,590) out of 3 payroll samples selected for testing, the entire amount of employee?s entire pay period salary was charged to the program even though the employee?s timesheet reported that the employee only worked partially on the program for such pay period. As a result, the actual time spent by the employee was not properly charged to the federal grant. Cause ? The Trust does not have adequate policies and procedures in place to ensure that payroll costs are supported by timesheets and the payroll costs charged to federal grants are accurate. Effect ? The Trust was unable to demonstrate that the payroll expenditures charged to the federal grant accurately reflect the actual time incurred by employees on the program. As such, the payroll expenditures were not properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Questioned Costs ? Not determinable. Total payroll costs charged to the CFDA Number: 98.000 federal grant in 2019 was $47,385. Context ? This is a condition identified per review of the Trust?s compliance with the specified requirements using a statistically valid sample. Recommendation ? We recommend that the Trust establish policies and procedures to ensure that payroll costs charged to the federal grant are based on supporting documentation such as timesheets that accurately reflect the work performed by employees on the federal grant. Views of Responsible Officials ? When the Trust became aware of the time sheet requirements as part of its first Single Audit in almost a decade, the Trust prepared, published and circulated a time-effort tracking policy, procedures and tool on May 2019. This was a system based in Microsoft Excel. In April 2020, the Trust moved away from the Excel system and developed the time tracking and work efforts capabilities in Microsoft?s Dynamics 365 platform. This system automated the approval process by routing time sheets to corresponding supervisors based on the organizational hierarchy of the Trust and the new system also provided a dropdown list based on active projects to indicate on which project the staff member worked. The Trust would reiterate to the note above that one of the samples tested as having been prior to the Trust becoming aware of this requirement and having an opportunity to place into effect its corrective measures. While the Trust faithfully instituted its time and work effort tracking policy and procedures, there are certain limitations within the OAS? legacy financial system, namely that is not designed for multiple project/awards to be charged per month. The system limits the number of projects to be changed to three per contractual period. A contractual period may have a duration anywhere from one month to six months. Notwithstanding the above, the OAS is implementing a new ERP to begin operations in 2022 that addresses this issue. The Trust along with OAS? Department of Financial Services (DFS) will continue to improve its systems and put into place quarterly reconciling procedures that will reflect the time and effort recorded in the Trust?s time keeping system with the expenditures recorded in the OAS? financial system. Additionally, The Trust is working on improving its Dynamic 365 system to incorporate and track work effort with approved budgets for each project/award and its correlation to each staff member.

Finding Number: 2019-002 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed, Allowable Cost/Cost Principles -Payroll Activities Information of Federal Program - CFDA Number: 19.750 Bureau of Western Hemisphere Affairs (WHA Grant Programs) Award Number: various Award Year: various Criteria ? The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (4) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (5) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (6) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (ix) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (x) Be incorporated into the official records of the non-Federal entity; (xi) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (xii) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (xiii) Comply with the established accounting policies and practices of the non-Federal entity; (xiv) [Reserved] (xv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (xvi) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? During our test work on payroll transactions, we noted that for 2 ($9,649) out of the 3 payroll samples selected for testing, the Trust did not have employee?s timesheet to support the actual time spent and charged to the federal grant under audit. The Trust implemented the preparation of employee timesheets during fiscal year 2019. However, we also noted that for 1 ($3,567) out of 3 payroll samples selected for testing, the entire amount of employee?s entire pay period salary was charged to the program even though the employee?s timesheet reported that the employee only worked partially on the program for such pay period. As a result, the actual time spent by the employees was not properly charged to the federal grant. Cause ? The Trust does not have adequate policies and procedures in place to ensure that payroll costs are supported by timesheets and the payroll costs charged to federal grants are accurate. Effect ? The Trust was unable to demonstrate that the payroll expenditures charged to the federal grant accurately reflect the actual time incurred by employees on the program. As such, the payroll expenditures were not properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Questioned Costs ? Not determinable. Total payroll costs charged to the CFDA Number: 19.750 federal grant in 2019 was $75,190. Context ? This is a condition identified per review of the Trust?s compliance with the specified requirements using a statistically valid sample. Recommendation ? We recommend that the Trust establish policies and procedures to ensure that payroll costs charged to the federal grant are based on supporting documentation such as timesheets that accurately reflect the work performed by employees on the federal grant. Views of Responsible Officials ? When the Trust became aware of the time sheet requirements as part of its first Single Audit in almost a decade, the Trust prepared, published and circulated a time-effort tracking policy, procedures and tool on May 2019. This was a system based in Microsoft Excel. In April 2020, the Trust moved away from the Excel system and developed the time tracking and work efforts capabilities in Microsoft?s Dynamics 365 platform. This system automated the approval process by routing time sheets to corresponding supervisors based on the organizational hierarchy of the Trust and the new system also provided a dropdown list based on active projects to indicate on which project the staff member worked. The Trust would reiterate to the note above that one of the samples tested as having been prior to the Trust becoming aware of this requirement and having an opportunity to place into effect its corrective measures. While the Trust faithfully instituted its time and work effort tracking policy and procedures, there are certain limitations within the OAS? legacy financial system, namely that is not designed for multiple project/awards to be charged per month. The system limits the number of projects to be changed to three per contractual period. A contractual period may have a duration anywhere from one month to six months. Notwithstanding the above, the OAS is implementing a new ERP to begin operations in 2022 that addresses this issue. The Trust along with OAS DFS will continue to improve its systems and put into place quarterly reconciling procedures that will reflect the time and effort recorded in the Trust?s time keeping system with the expenditures recorded in the OAS? financial system. Additionally, The Trust is working on improving its Dynamic 365 system to incorporate and track work effort with approved budgets for each project/award and its correlation to each staff member.

Finding Number: 2019-003 Prior Year Finding Number: N/A Compliance Requirement: Procurement and Suspension and Debarment Information of Federal Program - CFDA Number: 98.000 ?A New Path?: Promoting a Healthy Environment and Productive Alternatives for Juvenile Remandees and Offenders in Jamaica Award Number: AID-532-IO-14-00001 Award Year: 01/13/2017 ? 03/31/2020 Criteria ? The Code of Federal Regulations 2 CFR 200.318 (i) governing general procurement standards of federal funds requires that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Procurement by noncompetitive proposals is limited to certain specific circumstances (2 CFR 200.320(c)), and documentation of the justification for sole sourcing should be maintained. Condition ? During our test work on procurement transactions, we noted that for 1 out of 2 procurement samples selected for testing, the Trust could not provide a formal documentation to support the noncompetitive procurement. We were not able to determine whether the procurement was available only from a single source as represented by the Trust. Cause ? The Trust does not have adequate policies and procedures to ensure compliance with the requirements regarding procurement and suspension and debarment with regards to the maintenance of documentation to support the justification for their selection of the vendor at the time the procurement was approved. Effect ? Lack of appropriate management oversight and document retention policy to meet the procurement compliance requirements could result in unallowable costs charged to the grant and could further lead to loss of federal funding. Questioned Costs ? None. Context ? This is a condition identified per review of the Trust?s compliance with the specified requirements using a statistically valid sample. Recommendation ? We recommend that the Trust enhance its existing policies and procedures to ensure adherence to Federal regulations relating to procurement and suspension and debarment requirements. In particular, the Trust should ensure that complete documentation is maintained for all procurement transactions. Views of Responsible Officials ? The Trust would note that the selection of the local partner to implement the project on behalf of The Trust and a dependency of the OAS was done so in coordination with and at the request of the US Embassy in Jamaica in 2014 and that the local partner has performed in such an exemplary manner that to this day is the implementing partner for this project in Jamaica. There are other documents provided by the OAS (emails) indicating the USAID Jamaica was aware of the selection, albeit the documents postdate the initial selection. Further, the Trust would note that the selection according to the OAS dependency was in accordance with OAS procurement rules. Therefore, they believed they were in compliance with the requirements to which they needed to adhere. The Trust will make certain that all selections and procurement practices not only comply with OAS procurement rules but also federal guidelines for those projects whose execution are in part funded by US Federal grants.

Finding Number: 2019-004 Prior Year Finding Number: N/A Compliance Requirement: Procurement and Suspension and Debarment Information of Federal Program - CFDA Number: 19.750 Bureau of Western Hemisphere Affairs (WHA Grant Programs) Award Number: various Award Year: various Criteria ? In accordance with 2 CFR Part 180, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. When a non-Federal entity enters into a covered transaction, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred. This verification may be accomplished by (1) checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition ? During our test work on subrecipient monitoring transactions, we noted that 3 of the 5 subrecipient samples tested, the Trust could not provide evidence whether the Excluded Parties List System search was performed prior to entering into contract with the subrecipients. However, the Trust provided screenshots that the subrecipients were not debarred or suspended at the time the audit was performed. Cause ? The Trust does not have adequate policies and procedures to ensure compliance with the requirements regarding procurement and suspension and debarment with regards to checking the Excluded Parties List System prior to executing contracts with subrecipients. Effect ? The Trust could inadvertently contract with or make sub-awards to parties that are suspended or debarred from doing business with the Federal government. In addition, contracts may be executed with unqualified subrecipients. Questioned Costs ? None. Context ? This is a condition identified per review of the Trust?s compliance with the specified requirements using a statistically valid sample. Recommendation ? The Trust should enhance its existing policies and procedures to ensure adherence to Federal regulations relating to procurement and suspension and debarment requirements for subrecipients. In particular, the Trust should ensure subrecipients are not debarred or suspended by the federal government prior to entering in agreements with them. Views of Responsible Officials ? The Trust would note that it became aware of this requirement during the 2018 Single Audit carried out in June of 2019 and that from that time forward it prepared, published, and circulated policy and procedures to ensure that all procurements passed through the suspension and debarment procedure. The Trust will enhance the policy to ensure that all responsible parties do so and document fully the timing of the policy execution to be in particular before entering into an agreement.

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