SHENANDOAH WOMEN'S CENTER INC. D/B/A EASTERN PANHANDLE EMPOWERMENT CTR

Finding 2025‐004 Inaccurate Reporting of Expenditures on Monthly Project Financial Reports (VOCA #16.575) Criteria: Non-federal entities must establish and maintain effective internal controls over federal awards, including controls that ensure accurate, complete and timely reporting. Under the VOCA grant agreements, the organization must submit monthly financial reports that accurately reflect expenditures charged to the VOCA grant. Condition: During testing, we noted that all 12 monthly project reports submitted to VOCA were revised by the grantor to properly report expenditures to be charged to the grant. Throughout the 12 months, revisions totaling $54,190.79 were made to these reports. Cause: Turnover in the accounting position, combined with changes in the way VOCA paid the organization (advance payments vs reimbursement). Reductions in some monthly payments appear to have been made as a result of unexpended VOCA receipts from the prior year. Effect: Inaccurate reporting could jeopardize future funding or delay reimbursement. Questioned Costs: No questioned costs. The grantor corrected reports prior to reimbursing the organization and therefore, there were no unsupported or unallowable costs. Context: This finding is considered systemic, as all 12 monthly reports required revisions to be made by the grantor. However, the revisions were not the result of unallowable costs being charged to the grant. Repeat Finding: Not a repeat finding, as the organization did not require a single audit in the prior year. Views of Responsible Officials and Planned Corrective Action: During the period under review, the organization experienced turnover in the accounting position, which impacted continuity in grant reporting processes. In addition, VOCA grant funding administered through JCS (the grantor) transitioned from an advance payment method to a reimbursement-based payment structure. This change significantly affected the timing and presentation of expenditures reported on monthly financial reports. Management would like to clarify that the revisions made to all 12 reports were not the result of unallowable or unsupported costs. As noted in the audit, there were no questioned costs. The grantor adjusted the reports primarily due to the shift in payment methodology and reconciliation of prior-year unexpended funds. In several instances, JCS modified invoice amounts after submission to align with its updated reimbursement process and internal grant tracking. These post-submission adjustments were administrative in nature and not attributable to improper expenditure classification or misuse of grant funds by the organization. We recognize, however, that stronger internal review controls could have reduced the need for grantor-initiated revisions. To address this matter and strengthen compliance EPEC, has instituted a double check procedure on invoices. Recommendation: We recommend that management implement a formal supervisory review process of VOCA expenditures to ensure that monthly reports are accurate prior to submission for reimbursement. We further recommend training be provided to staff in charge of submitting VOCA reimbursements to ensure accurate classification and reconciliation of expenditures.

FINDING 2022‐006 MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE ‐ RETAINING PROPER APPROVALS OF GRANT EXPENDITURES riteria: Title 2 Code of Federal Regulations Section 200.514 requires the auditor to obtain an understanding and assess the effectiveness of internal controls over federal awards. Condition: For 21 of 40 non-payroll activities tested that were charged to the grant, approval of the charge was not documented. Cause: Internal controls over the grant, specifically related to allowable activities and period of performance, were not operating effectively. Due to turnover in the business manager position, supporting documentation noting approval by someone with knowledge of the grant award was missing. Effect: Expenses could have been charged to the VOCA grant for unallowable activities or outside of the period of performance. This may have resulted in the need for the Organization to return funds, or could jeopardize future funding from this grantor. uestioned Costs: All costs tested were ultimately determined to be in compliance with the grant award; therefore, there are no questioned costs. Context: Approval of grant expenditures is a key internal control relative to federal awards. Repeat Finding: This is a repeat finding. Recommendation: We recommend that all invoices (regardless of whether they are charged to a grant) be reviewed and approved by someone with understanding of the Organization’s funding sources. Each invoice should be coded to the specific grant and/or general ledger account to which it will be applied. Approvals and coding should be obtained in writing on every invoice. For payroll charges, all payroll registers should be reviewed and approved to ensure proper allocation of payroll charges to grants. Views of Responsible Officials and Planned Corrective Action: As of October 2022, EPEC updated our grant expense approval process. As with all purchases and payroll, grant expenditures will be approved by a Director (Director team consists of: Executive Director, Director of Finance, Director of Outreach, and Director of Shelter), and when paid, will be assessed for accuracy again by EPEC’s contracted CPA. Approvals will be documented on each paper bill or electronically via email or DocuSign, when appropriate.

FINDING 2021-006 MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE - RETAINING PROPER APPROVALS AND DOCUMENTATION OF GRANT EXPENDITURES Criteria: Title 2 Code of Federal Regulations Section 200.514 requires the auditor to obtain an understanding and assess the effectiveness of internal controls over federal awards.Condition: For 30 of 37 non-payroll activities tested that were charged to the grant, approval of the charge was not documented. For 5 of the 30, supporting documentation was not retained to support the charge. For the remaining 25, support was provided, but there was no evidence of invoice approval by someone with knowledge of the grant. Additionally, for 5 of 60 payroll expenses tested that were charged to the grant, documentation for the expense (including approval by a program manager) was not retained. Cause: Internal controls over the grant, specifically related to allowable activities, were not operating effectively. Due to turnover in the business manager position, supporting documentation was missing. Effect: Expenses could have been charged to the VOCA grant for unallowable activities. This may have resulted in the need for the Organization to return funds, or could jeopardize future funding from this grantor. Questioned Costs: Known and likely questioned costs did not exceed $25,000, and therefore, are not required to be reported. Context: Approval of grant expenditures and retention of supporting documentation are key internal controls relative to federal awards. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that all invoices (regardless of whether they are charged to a grant) be reviewed and approved by someone with understanding of the Organization?s funding sources. Each invoice should be coded to the specific grant and/or general ledger account to which it will be applied. Approvals and coding should be obtained in writing on every invoice. For payroll charges, all payroll registers should be reviewed and approved to ensure proper allocation of payroll charges to grants. Views of Responsible Officials and Planned Corrective Action: As of October 2022, EPEC updated our grant expense approval process. As with all purchases and payroll, grant expenditures will be approved by a Director (Director team consists of: Executive Director, Director of Finance, Director of Outreach, and Director of Shelter), and when paid, will be assessed for accuracy again by EPEC?s contracted CPA. Approvals will be documented on each paper bill or electronically via email or DocuSign, when appropriate.

FINDING 2021-007 NONCOMPLIANCE WITH THE UNIFORM GUIDANCE COMPLIANCE REQUIREMENT ALLOWABLE ACTIVITIES - RETAINING DOCUMENTATION OF GRANT EXPENSES Criteria: Federal expenditures must be in compliance with allowable activities, which must be supported by documentation describing the nature of the expense. Condition: For 5 of 37 non-payroll activities tested that were charged to the grant, supporting documentation was not retained to support the charge. Additionally, for 5 of 60 payroll expenses tested that were charged to the grant, documentation for the expense was not retained.Cause: Due to turnover in the business manager position, supporting documentation was missing. Effect: Expenses could have been charged to the VOCA grant for unallowable activities. This may have resulted in the need for the Organization to return funds, or could jeopardize future funding from this grantor. Questioned Costs: Known and likely questioned costs did not exceed $25,000, and therefore, are not required to be reported. Context: Documentation of expenditures charged to federal grants is necessary to ensure activities are allowable. Recommendation: We recommend that all invoices (regardless of whether they are charged to a grant) be reviewed and approved by someone with understanding of the Organization?s funding sources. Each invoice should be coded to the specific grant and/or general ledger account to which it will be applied. Approvals and coding should be obtained in writing on every invoice. For payroll charges, all payroll registers should be reviewed and approved to ensure proper allocation of payroll charges to grants. Views of Responsible Officials and Planned Corrective Action: As of October 2022, EPEC?s process for grant expense record retention has changed. EPEC, again, keeps all documentation together by invoice and has that saved in paper copy and digitally via PDF on a backedup computer. All expenses are also approved first, by a director, and again by our CPA.