Bancroft Global Development

Finding 2023-001: Federal Funding Accountability and Transparency Act (FFATA) Reporting Federal Program: ALN 19.979 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The FFATA Subaward Reporting System (FSRS) is the reporting tool Federal prime awardees use to capture and report subaward and executive compensation data regarding their first tier subawards to meet the FFATA reporting requirements. Prime awardees awarded a Federal grant are required to file a FFATA sub-award report by the end of the month following the month in which the prime awardee awards any sub-grant equal to or greater than $30,000. Condition: The Organization has not complied with the aforementioned criteria (we noted no evidence of a FFATA reporting process). Cause: The Organization was unaware about the requirements (or maintain policies) related to FFATA reporting and therefore compliance with Federal regulations cannot be determined. Effect or Potential Effect: Absent proper policies and procedures, the Organization is at risk of entering into sub-awards under Federal awards that were not properly reported and therefore could result in noncompliance with FFATA requirements. Questioned Costs: None noted Context: The issue appears to be systemic. Identification as a Repeat Finding: Not applicable Recommendation: We recommend the Organization establish a FFATA reporting policy to become compliant with the aforementioned requirements. We further recommend it ensure all staff are properly trained with respect to the new policy to ensure compliance. In cases where the Organization is exempt from reporting or qualifies for a reporting waiver, that conclusion should be documented in its subgrantee records.

Information on the Federal Programs: All Programs Criteria: CFR 200.213 states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person. Additionally, as outlined in each Department of State award, recipients of U.S. Government funds must adhere to the United States Government’s requirements on screening all potential vendors, suppliers, subcontractors/grantees and employees against the United States Department of State’s Terrorism watch list. The screening of all potential vendors, suppliers, sub-contractors/grantees and employees must be documented in writing. Condition: The Organization did not provide timely/contemporaneous documentation to support its screenings for its potential and current vendors, suppliers, contractors, employees, etc. that were paid with Federal funds during the year under audit. Cause: The Organization did not follow its internal policy with respect to screening vendors, suppliers, contractors and employees in order to adhere to compliance over suspension and debarment. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organization's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Effect: The Organization could make payments to an entity or individual that has been debarred or suspended by the US Government; such costs would be disallowed, and the Organization could face consequences for lack of compliance. Questioned Costs: None noted. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organization adhere to its policy of how screenings will be performed and how contemporaneous documentation will be maintained in order to demonstrate compliance with government regulations.

Information on the Federal Programs: All Programs Criteria: CFR 200.318 states that non-Federal entities must have and use documented procurement procedures consistent with the requirements for procurement regulations included in paragraphs 318 through 327. Condition: The Organization maintains a procurement policy however its practices do not consistenly evidence a documented process. During our audit we noted several instances where consultants were engaged without any documentation of procurement process or justification to support using a noncompetitive procurement process in accordance with CFR 200.320(c). Cause: The Organization did not follow its policies related to noncompetitive procurements. Context: The Organization may be at risk of entering into contracts for goods or services under federal awards that were not adequately procured based on the regulations in the Uniform Guidance and the awarding agency or pass-through entity could disallow the costs paid for the goods or services. Effect: The Organization may have disallowed costs for not properly procuring goods or services. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend the Organization follow its procurement policy to ensure compliance with CFR 200. Any procurements related to noncompetitive solicitations should be documented according to the provisions in CFR 200.320(c).

Finding 2021-001: Inadequate Financial Reporting and Year-End Close Criteria: As noted in 2 CFR ?200.303 ?The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Condition: The 2021 financial statements were not prepared in a timely manner (during the year), and therefore the unaudited financial statements required significant adjustment. The audit was delayed based on the fact that management required additional time to properly complete its financial statements prior to the commencement of our fieldwork (and again during fieldwork). Cause: We noted difficulty in completing accurate reconciliations and performing thorough analyses. Additionally, a proper internal controls process, which would include a supervisory review and approval process (with physical or electronic evidence of such a process), was not in place during the fiscal year under audit. Effect or Potential Effect: Significant adjustments were proposed by management during the audit. The aggregate effect of such adjustments resulted in a net increase in the current year change in net assets totaling $11,300,000 ($8,600,000 of this amount was related to the recording of the in-kind contribution and the related receivable). Additionally, any internal financial statements produced by management during the year (and as of fiscal year end) were not properly stated and therefore could not be relied upon. As a result, the submission of the 2021 Uniform Guidance report (and related data collection form) was completed after the U.S. Government deadline date. Questioned Costs: Not determined. Context: Our audit process commenced during July 2022 and did not conclude until May 2023. Multiple versions of the financial statements were provided during that period of time period. Identified as a Repeat Finding, If Applicable: N/A Recommendation: We strongly recommend that all asset and liability account reconciliations be performed on a monthly or quarterly (at a minimum) basis. We also recommend detailed reviews/approvals of all supporting schedules be performed and contemporaneously documented in the accounting records; any discrepancies or other issues should be resolved in a timely manner. Also, the preparation of financial statements should happen in a timely manner following the close of the quarter, and those should also undergo a documented management (and Board) review process.

Federal Program: All Federal Programs Criteria: CFR 200.213 ?Suspension and debarment? require non-Federal entities to comply with Federal regulations that restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: For the first six months of the fiscal year, payments to third parties (primarily its independent contractors), were not evidenced by documentation supporting its due diligence in this area. Questioned Costs: Not determined Context: Our audit procedures consisted of testwork completed on individual expenditures charged to Federal awards. The source report in which samples were selected was generated directly from the Organization's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systemic in nature, until July 2020 when the Organization implemented formal procedures addressing this area. Effect: Absent a proper due diligence process with respect to screening potential and current vendors, suppliers, contractors, subrecipients, employees, fellows, etc. increases the potential that Federal funds be inadvertently provided to parties deemed to be suspended or disbarred by the United States Government. Cause: During the first six months of the fiscal year, the Organization did not have a formal policy governing the screening of vendors, suppliers, contractors, subrecipients, employees, fellows, etc. to adhere to compliance with respect to Federal suspension and debarment requirements and, therefore, screenings were not performed. Identification as a Repeat Finding: Identified as Finding 2019-001 in 2019. Recommendation: We noted that as of July 2020, the Organization implemented policies and procedures surrounding 2 CFD 200.213. After date of implementation, we did not not any further instances of noncompliance.

Finding 2019-001: Compliance with U.S. Government Suspension and Debarment Requirements Federal Program: All Federal Programs Criteria: CFR 200.213 ?Suspension and debarment? require non-Federal entities to comply with Federal regulations that restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: Payments to third parties (most importantly its independent contractors), were not evidenced by documentation supporting its due diligence in this area. Questioned Costs: Not determined Context: Our audit procedures consisted of testwork completed on individual expenditures charged to Federal awards. The source report in which samples were selected was generated directly from the Organization's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Effect: Absent a proper due diligence process with respect to screening potential and current vendors, suppliers, contractors, subrecipients, employees, fellows, etc. increases the potential that Federal funds be inadvertently provided to parties deemed to be suspended or disbarred by the United States Government. Cause: The Organization does not have a formal policy governing the screening of vendors, suppliers, contractors, subrecipients, employees, fellows, etc. to adhere to compliance with respect to Federal suspension and debarment requirements and, therefore, screenings were not performed. Recommendation: We strongly recommend that the Organization develop a formal policy (and a documented practice) with respect to such a process in the upcoming year; evidence of all due diligence should be maintained in the Organization?s physical or electronic records. We also recommend that management regularly communicate these policies and procedures to all employees, and it should emphasize the importance of ensuring compliance with U.S. Government suspension and debarment provisions.