INVISIBLE CHILDREN, INC.Non-Profit

Finding 2024-002: Subrecipient Risk Assessment and Monitoring Federal Program: 19.345 Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the sub-award for purposes of determining the appropriate sub-recipient monitoring procedures to prescribe to each individual sub-recipient (i.e. pre-award risk assessment procedures). Condition: We noted certain subrecipients did not have current risk assessments on file. The subrecipients were long standing partners of Invisible Children. In addition, Invisible Children did not have a procedure in place to document whether the subrecipients were subject to audit under Uniform Guidance each year (based on the threshold of U.S. Federal funding incurred). Cause: Invisible Children has conducted risk assessments when originally engaging with the subrecipients, but were not reviewing and updating the assessments on a routine basis, or when new agreements were signed. This was not required by their policy. Effect: The Organization could inadvertently engage in relationships with sub-recipients of higher risk without the appropriate level of oversight (monitoring) to ensure that subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted Context: Under the Uniform Guidance (2 CFR Part 200), Federal awarding agencies and passthrough entities are required to evaluate the risk of subrecipients and ensure compliance with audit requirements. Specifically, subrecipients that expend $750,000 or more in Federal awards during a fiscal year are subject to a Single Audit or program-specific audit. Pass-through entities must have documented procedures to annually assess which subrecipients meet this threshold and ensure that appropriate risk assessments and audit follow-ups are completed. In this case, Invisible Children has longstanding relationships with its subrecipients but lacks a formal procedure to document annual risk assessments and to verify whether subrecipients meet the audit threshold, which creates a risk of noncompliance with Federal requirements. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that the Organization update their policies to ensure that they comply with Uniform Guidance requirements regarding pre-award risk assessments as well as document annually whether the subrecipient was required to obtain an audit in accordance with the standards. If applicable, the Organization is to verify that the subrecipient is audited and review the results of the audit with respect to its funding.

Finding 2024-003: Payroll Federal Program: All Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430 “Compensation – personal services” requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, these records must comply with established accounting policies and practices of the non-Federal entity. Condition: We noted two instances where the timesheet itself identified a code which did not match that used for the allocation spreadsheet. Cause: The Organization's review process for payroll did not identify the errors. Effect: In certain instances, the Organization cannot provide a clear trail from the supporting documentation including timesheets to the entry within the general ledger. Questioned Costs: None noted Context: It is our understanding per discussions with management that the amount allocated within the general ledger is ultimately correct. Identification as a Repeat Finding, if Applicable: Finding 2023-003 Recommendation: We recommend the Organization ensure there is a review of the payroll process to detect errors.

Finding 2023-001: Federal Funding Accountability and Transparency Act Subaward Reporting Information of the Federal Program: Assistance Listing Number 19.345 Criteria: As noted in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements who make first tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRS. Condition: The Organization did not register its subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System. Cause: The Organization did not update its financial and accounting policies, and as a result did not adhere to the guidance. Effect or Potential Effect: The Organization could inadvertently fail to ensure that subrecipients are in compliance with Federal award agency regulations.Questioned Costs: None noted Context: The Organization did not register their subawards in excess of $30,000 with the Federal Funding Accountability and Transparency Act Subaward Reporting System. Identification as a Repeat Finding, if Applicable: 2022-001 Recommendation: We recommend that the Organization update its policies and procedures to ensure all first tier subawards in excess of $30,000 are accurately and timely registered with the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, the Organization should ensure any subawards are reported within the required time-frame.

Finding 2023-002: Procurement Information of the Federal Program: Assistance Listing Number 19.345 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 did not provide supporting documentation for certain procurement decisions, and we noted instances where a memo was used to justify noncompetitive procurement when it was not clearly justified by one of the reasons permitted within CFR 200.320:  The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold;  The item is available only from a single source;  The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation;  The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity;  After solicitation of a number of sources, competition is determined inadequate. Cause: The Organization has a procedure in place to ensure all vendors or suppliers paid with Federal funding are engaged in compliance with the Federal regulations but compliance with the policy was not always documented. Effect or Potential Effect: The Organization may have disallowed costs for not properly procuring goods or services. Questioned Costs: None noted Context: The Organization is 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 could disallow the costs paid for the goods or services. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend that the Organization update its policies and procedures to ensure compliance with CFR 200.320 regarding noncompetitive procurement. In addition, we recommend that documentation be maintained for all procurement decisions in accordance with established policy.

Finding 2022-001: Federal Funding Accountability and Transparency Act Subaward Reporting Information of the Federal Program: CFDA 98.001 Criteria: As noted in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements who make first tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRS. Condition: The Organization did not register its subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System. Cause: The Organization did not update its financial and accounting policies, and as a result did not adhere to the guidance. Effect or Potential Effect: The Organization could inadvertently fail to ensure that subrecipients are in compliance with Federal award agency regulations. Questioned Costs: None noted Context: The Organization did not register their subawards in excess of $30,000 with the Federal Funding Accountability and Transparency Act Subaward Reporting System. Identification as a Repeat Finding, if Applicable: 2021-001 Recommendation: We recommend that the Organization update its policies and procedures to ensure all first tier subawards in excess of $30,000 are accurately and timely registered with the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, the Organization should ensure any subawards are reported within the required time-frame.

Finding 2021-001: Federal Funding Accountability and Transparency Act Subaward Reporting Information of the Federal Program: CFDA 98.001 Criteria: As noted in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements who make first tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRS. Condition: The Organization did not register its subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System. Cause: The Organization was not aware of the compliance requirements issued by the Office of Management and Budget regarding subaward reporting requirements, and did not update its financial and accounting policies, and as a result did not adhere to the guidance. Effect or Potential Effect: The Organization could inadvertently fail to ensure that subrecipients are in compliance with Federal award agency regulations. Questioned Costs: None noted Context: The Organization did not register their subawards in excess of $30,000 with the Federal Funding Accountability and Transparency Act Subaward Reporting System. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that the Organization update its policies and procedures to ensure all first tier subawards in excess of $30,000 are accurately and timely registered with the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, the Organization should ensure any subawards are reported within the required time-frame. The list of data elements that are required to be reporting for each subaward in excess of $30,000 include the following: ??Subaward Date ??Subawardee DUNS # ??Amount of Subaward ??Subaward Obligation/Action Date ??Date of Report Submission ??Subaward Number

Finding 2021-002: Approval of Drawdown Requests Information of the Federal Program: CFDA 98.001 Criteria: In accordance with 2 CFR 200.303, the Organization 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 and the ``Internal Control Integrated Framework??, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During the fiscal year, the drawdown requests for CFDA 98.001 were e-mailed to program staff to review, but there was no formal documentation of review or approval by anyone other than the Acting Director of Finance, who generates the request. Cause: There was no formal approval indication on the drawdown requests for 98.001. Effect or Potential Effect: Per our discussions, the requests are e-mailed to give program staff an opportunity to review and raise any issues; however, without positive confirmation of approval, there is a potential that the drawdown could be incorrect due to error or oversight. Questioned Costs: None noted Context: The Organization failed to provide formal authorization over their drawdown requests. Our audit work in this area consisted of examination of a random sample of drawdowns that were submitted for the fiscal year. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. The issue is deemed to be systemic in nature. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that the Organization develop a process by which a program staff person and the Director of Finance sign and date the face of the drawdown support, or perhaps develop a standard cover sheet that includes such information, and file it along with the drawdown documentation.