UNITED COMMUNITY MINISTRIES, INC.

Finding 2025-003 Assistance Listing Number(s): 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entity: Virginia Department of Social Services Pass-through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2024 through June 30, 2025 Criteria or Specific Requirement: Per 2 CFR 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and must be supported by a system of internal controls.Fringe benefits must be based on actual costs incurred and be allocable to the federal award. Per 2 CFR 200.403, costs must be allowable, reasonable, and properly supported. Condition and Context: UCM did not maintain effective internal controls over payroll and employee benefit costs charged to the federal award. Testing of all 14 employees charged to the program identified the following: Payroll costs – time and effort reporting • No internal controls existed over time and effort reporting for 2 out of 14 employees charged to the federal award. • Required after-the-fact documentation of actual time worked was not maintained. Retroactive time and effort certifications were received during audit for 10 out of 14 employees who worked within the program. • 5 of 14 employees were charged to the federal award at amounts exceeding the time reflected on time certifications, indicating payroll charges were not based on actual effort. Employee Benefits – lack of controls and overcharging • There were no internal controls to ensure that employee benefits charged to the award reflected actual costs incurred. • 13 of 14 employees had employee benefit costs charged to the federal award that exceeded actual benefits incurred, indicating the use of budgeted or estimated amounts rather than actual costs. Cause: UCM lacked formal written policies and procedures governing time and effort reporting, employee benefit allocations, and documentation standards. Significant management personnel turnover resulted in inadequate federal grant knowledge and inconsistent application of Uniform Guidance requirements. Effect or Potential Effect: Unallowable, unsupported, or inaccurately allocated costs were charged to the federal award. UCM may be required to repay federal funds and implement corrective actions. Repeat Finding: This finding is a repeat of 2024-001. Questioned Costs: Questioned costs include the 2 out of 14 unsupported time and effort costs, excess salaries and employee benefits than actual allocable to the employees within the program, and 10% de minimis charged on the questioned costs. Payroll: $55,523 Employee benefits: 99,980 Indirect overcharge on above questioned costs: 15,550 Total known questioned costs: $171,053 Recommendation: UCM should develop and implement comprehensive written policies and proceduresaddressing time and effort, employee benefits, payroll allocations, and documentation standards. Staff responsible for grant accounting should receive Uniform Guidance training. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.

Finding 2025-004 Assistance Listing Number(s): 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entity: Virginia Department of Social Services Pass-through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2024 through June 30, 2025 Criteria or Specific Requirement: Per 2 CFR 200.303 Internal controls, non-Federal entities must establish and maintain effective internal control over Federal awards to provide reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the award. Condition: For 14 of 60 disbursements tested, internal controls over the review and approval of costs charged to the Federal award were not documented. Cause: The entity does not have formalized or consistently documented control procedures over disbursements charged to Federal awards. Effect or Potential Effect: Lack of documented controls increases the risk that unallowable or unsupported costs may be charged to Federal awards without detection. Repeat Finding: This finding is a repeat of 2024-002 representing the continued internal control deficiency. Recommendation: UCM should formalize and document internal control procedures over Federal award expenditures, including documented review and approval processes to ensure compliance with Uniform Guidance. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.

Finding 2025-005 Assistance Listing Number(s): 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entity: Virginia Department of Social Services Pass-through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2024 through June 30, 2025 Criteria or Specific Requirement: Per 2 CFR 200.403 Factors affecting allowability and 2 CFR 200.404 Reasonable costs, costs charged to Federal awards must be adequately documented, reasonable, and based on actual costs. Allocations must be supported and not based on unsupported estimates. Condition and Context: 9 of 60 disbursements tested (totaling $2,736 in the sample) were allocated to the Federal award using estimates for insurance, software, IT support, telephone system, payroll processing, and benefit plan administration. Total charges to the award for these categories were approximately $18,838. Cause: The entity used estimated allocations without adequate supporting documentation or reconciliation to actual costs. Effect or Potential Effect: Costs charged to the Federal award may not be accurate, allowable, or properly allocated, resulting in likely questioned costs of $18,838. Repeat Finding: This finding is a repeat of 2024-002 representing the continued instance of noncompliance identified separately in the current year. Questioned Costs: $18,838. This is the total of allocated costs charged to the federal award. Actual bases for allocation were not determined at time of audit. Recommendation: UCM should develop and implement comprehensive written policies and procedures addressing allowability and documentation standards. Controls should ensure only actual costs are charged. Staff responsible for grant accounting should receive Uniform Guidance training. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.

Finding 2025-006 Assistance Listing Number(s): 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entity: Virginia Department of Social Services Pass-through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2024 through June 30, 2025 Criteria or Specific Requirement: Federal TANF requirements provide that assistance be made only to eligible families, which generally must include a financially needy household with a dependent child and a parent or caretaker relative, and must meet applicable eligibility requirements, including citizenship or qualified alien status. Eligibility determinations must be supported by sufficient documentation demonstrating compliance with program requirements. Internal controls should be designed and implemented to ensure that eligibility determinations are supported with appropriate documentation, reflect current eligibility, and are reviewed and approved prior to the provision of assistance. Condition and Context: Testing of 11 out of 70 participant eligibility files disclosed significant deficiencies in documentation and internal control over eligibility determinations, as follows: • Internal Control Review o 11 of 11 files lacked documentation evidencing a supervisory or secondary review of eligibility determinations and supporting documentation. • Financial Eligibility o 6 of 11 files lacked adequate support for financial eligibility, including:  3 files with no supporting documentation, and  3 files with documentation from a prior year with no evidence of recertification. • Citizenship or Qualified Alien Status o 6 of 11 files lacked sufficient documentation, including:  3 files with no documentation, and  3 files with only a driver’s license provided. These documents do not establish U.S. citizenship or qualified alien status. • TANF Benefit History o 11 of 11 files lacked documentation verifying prior TANF benefit history to support compliance with the 60-month lifetime limit. • Household Composition o 11 of 11 files lacked documentation demonstrating that a minor child resided in the household with the parent or caretaker relative. • Legal Eligibility Requirements o 11 of 11 files lacked documentation supporting compliance with applicable federal and state eligibility requirements, including restrictions related to legal disqualifications, where applicable. • Work Participation o 6 of 11 files lacked adequate support, including:  4 files with no documentation, and  2 files with documentation from a prior year with no evidence of recertification. Cause: The deficiencies were caused by inadequate internal controls over TANF eligibility determinations and documentation. The entity did not have sufficiently detailed written procedures identifying required documentation for each eligibility criterion, nor did it ensure documentation was current and maintained in participant files. In addition, a formal supervisory review process was not implemented. As a result, staff did not consistently obtain, update, and retain documentation necessary to demonstrate compliance with federal TANF eligibility requirements. Effect or Potential Effect: Due to these deficiencies, the entity cannot demonstrate that TANF assistance was provided only to eligible participants, increasing the risk that assistance may have been provided to individuals who did not meet program eligibility requirements. Repeat Finding: This finding is a repeat of 2024-003. Recommendation: UCM should strengthen internal controls over TANF eligibility determinations by developing and implementing written procedures that clearly define the documentation required to support all TANF eligibility criteria. These procedures should require that participant files include sufficient documentation supporting financial eligibility, citizenship or qualified alien status, TANF benefit history, household composition, compliance with applicable legal eligibility requirements, and work participation when applicable. In addition, the entity should implement a documented supervisory review and approval process to verify eligibility determinations and supporting documentation prior to the provision of assistance. The entity should also provide training to staff responsible for eligibility determinations to ensure they understand federal TANF documentation requirements and maintain complete and accurate participant files. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.

Finding 2025-007 Assistance Listing Number(s): 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entity: Virginia Department of Social Services Pass-through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2024 through June 30, 2025 Criteria or Specific Requirement: Federal TANF requirements provide that assistance must be paid only to or on behalf of eligible participants, must be accurately calculated, and must be discontinued when eligibility expires, including compliance with the 60-month lifetime limit. Internal controls should ensure benefit payments are identifiable by participant and reconciled to eligibility determinations. Condition: During testing, the client provided handwritten listings of benefits paid to individual participants maintained within participant files. However, these records were maintained separately and were not integrated with or traceable to the general ledger. As a result, the auditors were unable to reconcile participant-level records to accounting records to determine whether all benefits recorded in the general ledger were paid to or on behalf of specific participants or whether all benefits provided were completely and accurately captured in participant files. Consequently, the auditors were unable to determine whether benefits were paid to eligible participants, whether amounts were accurately calculated, or whether assistance was discontinued when eligibility periods expired. Cause: The deficiencies resulted from inadequate internal controls over benefit payment processing and recordkeeping, including lack of integration between participant records and accounting records, absence of reconciliation procedures, and insufficient monitoring of benefit calculations and duration. Effect or Potential Effect: Because benefit payments cannot be traced to individual participants or reconciled to eligibility determinations, the entity cannot demonstrate that payments were made only to eligible participants, that benefit amounts were accurate, or that assistance was discontinued when eligibility expired. This creates a significant risk of ineligible or improperly calculated payments. Repeat Finding: This finding is a repeat of 2024-004. Recommendation: The entity should strengthen internal controls over TANF benefit payments by implementing procedures to ensure payments are identifiable by participant and reconciled to eligibility records. The entity should also establish controls to verify benefit calculations and ensure assistance is discontinued when eligibility expires, and maintain sufficient documentation to demonstrate compliance with program requirements. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.

Finding 2025-008 Assistance Listing Number(s): 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entity: Virginia Department of Social Services Pass-through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2024 through June 30, 2025 Criteria or Specific Requirement: Title 2 CFR §200.302(b) requires non-federal entities to maintain effective control and accountability over all funds and to provide accurate, current, and complete disclosure of the financial results of each federally sponsored project or program. In addition, 2 CFR §200.328 requires financial reports to be supported by the entity’s accounting records and to be accurate and complete. Condition: The organization prepared various required financial reporting line items using budgeted amounts rather than actual expenditures recorded in the underlying accounting records. As a result, reported amounts did not agree to the general ledger and supporting accounting documentation. The variances were identified across multiple reporting line items and were not supported by reconciliations to actual expenditures. Cause: The condition occurred due to deficiencies in internal controls over financial reporting. Specifically, the organization relied on budgeted amounts rather than actual expenditures recorded in the accounting system when preparing required financial reports. In addition, formal written procedures do not clearly require that reported amounts be reconciled to the underlying accounting records prior to submission, and there was insufficient review and oversight to ensure that financial reports were prepared using actual data from the general ledger. Effect or Potential Effect: Because financial reports were not prepared using actual expenditures recorded in the accounting records, reported amounts may be inaccurate or incomplete. The use of budgeted amounts rather than actual financial data increases the risk that expenditures reported to the federal awarding agency or pass-through entity are misstated and not supported by the organization’s accounting records. As a result, the organization may be out of compliance with federal reporting requirements and federal agencies may rely on inaccurate financial information for monitoring and funding decisions. Repeat Finding: This finding is a repeat of 2024-005. Recommendation: We recommend the organization strengthen its internal controls over federal financial reporting by establishing and documenting procedures requiring that all reports submitted to federal awarding agencies or pass-through entities be prepared using actual expenditures recorded in the accounting system. These procedures should include a reconciliation of reported amounts to the general ledger and supporting documentation prior to submission, as well as an independent review process to ensure reported information is accurate, complete, and compliant with Uniform Guidance requirements. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.

Assistance Listing Number: 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families (TANF) Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entity: Virginia Department of Social Services Pass-Through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2023 through June 30, 2024 Criteria or Specific Requirement: 2 CFR 200.430 requires salary and benefit charges to be based on records that accurately reflect work performed. Condition and Context: UCM did not maintain effective internal controls to ensure that payroll and employee benefits charged to the federal award were allowable. Auditor tested 100% of personnel and related benefits charged to the federal award. Specific issues included:  Payroll costs – time and effort reporting o No internal controls existed over time-and-effort reporting for 2 out of 12 employees charged to the federal award. o Required after-the-fact documentation of actual time worked was not maintained. Retroactive time and effort certifications were received during audit for 10 out of 12 employees who worked within the program.  Employee benefits – lack of controls and overcharging o There were no internal controls to ensure that employee benefits charged to the award reflected actual costs incurred. o UCM charged budgeted benefit amounts, which were greater than actual costs. Cause: UCM lacked formal written policies and procedures governing time and effort reporting, employee benefit allocations, and documentation standards. Significant management personnel turnover resulted in inadequate federal grant knowledge and inconsistent application of Uniform Guidance requirements. Effect or Potential Effect: Unallowable, unsupported, or inaccurately allocated costs were charged to the federal award. UCM may be required to repay federal funds and implement corrective actions. Questioned Costs: Questioned costs include the 2 out of 12 unsupported time and effort costs, excess employee benefits than actual allocable to the employees within the program, and 10% de minimis charged on the questioned costs. Payroll: $15,037 Employee benefits: 77,118 Indirect overcharge on above questioned costs: 9,216 Total known questioned costs: $101,371 Recommendation: UCM should develop and implement comprehensive written policies and procedures addressing time and effort, employee benefits, payroll allocations, and documentation standards. Staff responsible for grant accounting should receive Uniform Guidance training. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.

Assistance Listing Number: 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families (TANF) Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entity: Virginia Department of Social Services Pass-Through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2023 through June 30, 2024 Criteria or Specific Requirement: 2 CFR 200.403–200.405 requires costs charged to a federal award must be allowable, allocable, and adequately supported. Condition: UCM did not maintain effective internal controls to ensure that non-payroll-related disbursements charged to the federal award were allowable. During planning, auditor identified material noncompliance of the non-payroll-related disbursements, and no further testing was performed. Specific issues included:  Other direct costs o Disbursements lacked sufficient documentation to support allowability for costs charged based on budget. o Prepaid expenses for a database license and gift card inventories did not have adequate controls or supporting records. Cause: UCM lacked formal written policies and procedures governing allowability and documentation standards. Significant management personnel turnover resulted in inadequate federal grant knowledge and inconsistent application of Uniform Guidance requirements. Family Achievement supervisors can select any supervisor name to sign off/approve costs for allowability and payment. Effect or Potential Effect: Unallowable, unsupported, or inaccurately allocated costs were charged to the federal award. UCM may be required to repay federal funds and implement corrective actions. Questioned Costs: Include identified prepaids and costs in excess of actual: 2025 Database licensing: $40,000 Gift cards held in inventory: 12,853 Budgeted costs charged in excess of actual: 30,770 De minimis indirect cost rate applied to above costs: 8,362 Total known questioned costs: $91,985 Recommendation: UCM should develop and implement comprehensive written policies and procedures addressing allowability and documentation standards. Controls should ensure only actual costs are charged. Electronic signatures should have IT controls in place to allow for only the individual signing off to select their own name. Staff responsible for grant accounting should receive Uniform Guidance training. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.

Assistance Listing Number: 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families (TANF) Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entity: Virginia Department of Social Services Pass-Through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2023 through June 30, 2024 Criteria or Specific Requirement: Federal TANF requirements provide that assistance be made only to eligible families, which generally must include a financially needy household with a dependent child and a parent or caretaker relative, and must meet applicable eligibility requirements, including citizenship or qualified alien status. Eligibility determinations must be supported by sufficient documentation demonstrating compliance with program requirements. In addition, internal controls should be designed and implemented to ensure that:  Eligibility determinations are supported with appropriate documentation,  Eligibility determinations are reviewed and approved prior to the provision of assistance. Condition and Context: Testing of 12 participant eligibility files disclosed material weaknesses in documentation and internal control over eligibility determinations, as follows:  Internal Control Review o 11 of 12 files lacked documentation evidencing a supervisory or secondary review of eligibility determinations and supporting documentation.  Financial Eligibility o 6 of 12 files lacked current-year documentation supporting financial need, and no evidence of annual recertification was maintained.  Citizenship or Qualified Alien Status o 8 of 12 files lacked sufficient documentation supporting U.S. citizenship or qualified alien status. Files contained only:  An employment authorization card,  A Social Security card stating “valid for work only with DHS authorization,”  A Social Security card with no restriction noted, or  No supporting documentation. These documents do not establish U.S. citizenship or qualified alien status.  TANF Benefit History o 12 of 12 files lacked documentation verifying prior TANF benefit history to support compliance with the 60-month lifetime limit on federally funded TANF assistance.  Household Composition o 9 of 12 files lacked documentation demonstrating that a minor child resided in the household with the parent or caretaker relative.  Legal Disqualifications o 12 of 12 files lacked documentation supporting compliance with applicable federal and state eligibility requirements, including restrictions related to legal disqualifications, where applicable.  Work Participation o 7 of 12 files lacked documentation supporting that participants were engaged in required work activities, when applicable. Cause: The deficiencies were caused by inadequate internal controls over TANF eligibility determinations and documentation. Specifically, UCM did not have sufficiently detailed written procedures identifying the documentation required to support each eligibility requirement, including financial eligibility, citizenship or qualified alien status, household composition, TANF benefit history, compliance with applicable legal eligibility requirements, and work participation. In addition, a formal process requiring supervisory review and approval of eligibility determinations and supporting documentation was not consistently implemented. As a result, staff responsible for determining eligibility did not consistently obtain, update, and retain documentation necessary to demonstrate compliance with federal TANF eligibility requirements. Effect or Potential Effect: Due to these deficiencies, UCM cannot demonstrate that TANF assistance was provided only to eligible participants, increasing the risk that assistance may have been provided to individuals who did not meet program eligibility requirements. Recommendation: UCM should strengthen internal controls over TANF eligibility determinations by developing and implementing written procedures that clearly define the documentation required to support all TANF eligibility criteria. These procedures should require that participant files include sufficient documentation supporting financial eligibility, citizenship or qualified alien status, TANF benefit history, household composition, compliance with applicable legal eligibility requirements, and work participation when applicable. In addition, the entity should implement a documented supervisory review and approval process to verify eligibility determinations and supporting documentation prior to the provision of assistance. The entity should also provide training to staff responsible for eligibility determinations to ensure they understand federal TANF documentation requirements and maintain complete and accurate participant files. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.

Assistance Listing Number: 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families (TANF) Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entity: Virginia Department of Social Services Pass-Through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2023 through June 30, 2024 Criteria or Specific Requirement: Federal TANF requirements provide that assistance may only be paid to or on behalf of eligible participants and that benefit amounts must be calculated in accordance with applicable program rules. In addition, assistance must be discontinued when a participant’s eligibility period expires, including compliance with the 60-month lifetime limit on federally funded TANF assistance. Internal controls should be designed and implemented to ensure that benefit payments can be identified by individual participant, reconciled to eligibility determinations, and monitored to ensure that benefits are accurately calculated and provided only for the period during which participants are eligible to receive assistance. Condition: During testing, the auditors noted that while the entity maintained handwritten lists of expenses by participant, these records were maintained separately by individual and were not integrated with or readily traceable to the general ledger. As a result, the auditors were unable to reconcile the handwritten participant-level records to the accounting records to determine whether the costs recorded were complete or accurately reflected all benefits paid on behalf of those participants. In addition, although dates were included on the handwritten sheets, there is a risk that the recorded information was incomplete and did not capture all payments actually made. Consequently, the auditors were unable to determine whether benefits paid were made to or on behalf of eligible participants, whether amounts were accurately calculated, or whether assistance was discontinued when eligibility periods expired. Cause: The deficiencies resulted from inadequate internal controls over TANF benefit payment processing and recordkeeping. Specifically, the entity’s accounting records did not identify benefit payments by individual participant, and procedures were not in place to reconcile benefit payment records with participant eligibility records. In addition, the entity did not maintain adequate documentation or monitoring procedures to verify that benefits were correctly calculated or discontinued when eligibility periods expired. Effect or Potential Effect: Because benefit payments cannot be traced to individual participants or reconciled to eligibility determinations, UCM cannot demonstrate that payments were made only to eligible participants, that benefit amounts were accurately calculated, or that assistance was discontinued when participants were no longer eligible. As a result, there is an increased risk that ineligible payments may have occurred or that benefit amounts may have been incorrectly determined. Additionally, the inability to trace payments to participants prevents verification of compliance with the TANF program’s 60-month lifetime assistance limitation. Recommendation: UCM should strengthen internal controls over TANF benefit payments and eligibility duration by implementing procedures that ensure benefit payments are identifiable by individual participant and can be reconciled to participant eligibility records. UCM should establish controls requiring documentation to support the calculation of benefit amounts and monitoring procedures to ensure that assistance is discontinued when participants’ eligibility periods expire. In addition, UCM should maintain sufficient documentation to demonstrate that benefits provided comply with program requirements, including the 60-month lifetime limit on federally funded TANF assistance. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.

Assistance Listing Number: 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families (TANF) Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entity: Virginia Department of Social Services Pass-Through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2023 through June 30, 2024 Criteria or Specific Requirement: Title 2 CFR §200.302(b) requires non-federal entities to maintain effective control and accountability over all funds and to provide accurate, current, and complete disclosure of the financial results of each federally sponsored project or program. In addition, 2 CFR §200.328 requires financial reports to be supported by the entity’s accounting records and to be accurate and complete. Condition: The organization prepared various required financial reporting line items using budgeted amounts rather than actual expenditures recorded in the underlying accounting records. As a result, reported amounts did not agree to the general ledger and supporting accounting documentation. The variances were identified across multiple reporting line items and were not supported by reconciliations to actual expenditures. Cause: The condition occurred due to deficiencies in internal controls over financial reporting. Specifically, UCM relied on budgeted amounts rather than actual expenditures recorded in the accounting system when preparing required financial reports. In addition, formal written procedures do not clearly require that reported amounts be reconciled to the underlying accounting records prior to submission, and there was insufficient review and oversight to ensure that financial reports were prepared using actual data from the general ledger. Effect or Potential Effect: Because financial reports were not prepared using actual expenditures recorded in the accounting records, reported amounts may be inaccurate or incomplete. The use of budgeted amounts rather than actual financial data increases the risk that expenditures reported to the federal awarding agency or pass-through entity are misstated and not supported by the organization’s accounting records. As a result, UCM may be out of compliance with federal reporting requirements and federal agencies may rely on inaccurate financial information for monitoring and funding decisions. Recommendation: UCM should strengthen its internal controls over federal financial reporting by establishing and documenting procedures requiring that all reports submitted to federal awarding agencies or pass-through entities be prepared using actual expenditures recorded in the accounting system. These procedures should include a reconciliation of reported amounts to the general ledger and supporting documentation prior to submission, as well as an independent review process to ensure reported information is accurate, complete, and compliant with Uniform Guidance requirements. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.