SOCIETY OF AMERICAN FORESTERSNon-Profit

Finding: 2025-001 Federal Agency: U.S. Department of Agriculture, Forest Service Federal Program: Infrastructure Investment and Jobs Act Prescribed Fire/Fire Recovery Assistance Listing No.: 10.716 Federal Award No.: 22-CS-11132400-309 Federal Award Year: Multiple Finding Type: Significant deficiency in internal control over compliance, other matters Compliance Requirement: Allowable Cost/Cost Principle Criteria: Per 2 CFR §200.403 and §200.405, costs charged to federal awards must be allowable, allocable, and consistently treated. Additionally, sound accounting practices under generally accepted accounting principles (GAAP) require that expenses be recognized in the period in which they are incurred. Costs that provide benefits to future periods should be recorded as prepaid expenses and allocated to the appropriate period benefiting from the expenditure. Condition: During our testing of disbursements within the major program, we identified a $1,000 invoice that was charged to the federal award in the current fiscal year. However, the expense pertained to services or benefits applicable to the subsequent fiscal year and, therefore, should have been recorded as a prepaid expense rather than an expense of the current period. Context and Effect: This error was noted on one of the 42 samples of disbursements tested for the major programs. While the dollar amount identified was not material to the financial statements as a whole, it represents noncompliance with federal cost principles and GAAP related to proper period recognition of expenses. If this error were to occur for several different invoices or significantly larger invoices, it may have a material effect on the financial statements. Cause: The Society has established and generally effective internal controls over expense recognition, including procedures for cutoff and classification. This instance appears to be an isolated occurrence rather than an indication of a systemic control deficiency. The misclassification was primarily due to ambiguity in the vendor’s invoicing, including multiple invoices from the same vendor for similar events in different periods and limited documentation on the invoices of the applicable service period. This created confusion at the time of recording, resulting in the expense being recognized in the incorrect period. The transaction was not in proximity to year-end. Identification as a Repeat Finding, if Applicable: No. Questioned Costs: $1,000.Recommendation: While the Society’s existing controls over expense recognition appear to be appropriately designed and generally operating effectively, we recommend minor enhancements to further reduce the likelihood of similar isolated occurrences. Specifically, management may consider: • Requesting more detailed invoices from vendors, including clearly defined service periods. • Implementing an additional review step for invoices from vendors with recurring or overlapping billing arrangements. • Reinforcing existing review procedures to ensure that the period of benefit is clearly evidenced, particularly near year-end. These enhancements are intended to strengthen an already effective control environment and help ensure consistent and accurate expense recognition in accordance with federal requirements and GAAP. Responsible Official: CFO of the Society Views of Responsible Official and Planned Corrective Action: Management concurs with the audit finding. See the accompanying management’s corrective action plan for planned corrective action.

Federal agency: U.S. Department of Agriculture, Forest Service Federal program: Partnership Agreements Assistance Listing No.: 10.699 Federal Award No.: 21-PA-11132425-105, 23-PA-11132425-286, 23-PA-11132210-459, 23-PA- 11160100-496, 23-CS-11100400-018, 24-CS-11100100-044, 24-CS-11132420-094 Federal Award year: Multiple Finding Type: Significant deficiency and non-compliance Finding 2024-001: Significant Deficiency and Noncompliance Over Suspension and Debarment Check Procedures Criteria: 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. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, 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 or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (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: UHY noted that the Society did not perform suspension and debarment check before entering into covered transactions with vendors. Context and Effect: Without performing the required verification, there is a risk that the Society may enter into covered transactions with vendors that are suspended or debarred. Cause: There is no formalized step included in the procurement procedures to check for vendor exclusions for suspension and debarment when utilizing federal grant funds. Identification as a Repeat Finding, if Applicable: No. Questioned Costs: None identified. Recommendation: The Society should implement policies and procedures to ensure that the proper verification of suspension and debarment is performed during the vendor selection process when utilizing federal grant funds, ensuring that no federal grant funds go to excluded vendors. Responsible Official: CFO of the Society Views of Responsible Official and Planned Corrective Action: Management concurs with the audit finding. See the accompanying management’s corrective action plan for planned corrective action.