COMMUNITY RESOURCES INCNon-Profit

Condition: Internal controls over the CSBG income eligibility determination process do not appear adequate to ensure that only participants eligible under the CSBG guidelines will be served. Controls also failed to detect errors in certain income eligibility calculations and documentation. Criteria: Internal controls, such as a review of participant files for proper income documentation and support, as well as calculations for income eligibility, should be in place to ensure that adequate supporting documentation is maintained in participant files to support CSBG income eligibility criteria. Cause: Proper procedures were not established and maintained to ensure that a review of client income documentation and calculations related to the eligibility process were performed on a regular basis. Changes in procedures and certain oversight responsibilities were made during the year that resulted in errors and documentation exceptions not being detected in a timely manner. Effect: Documentation required to be maintained for each applicant for CSBG services, including copies of documents submitted by the applicants relating to their eligibility for CSBG services, was insufficient or contained errors in several of the client files selected for testing. While this did not result in material questioned costs in the current period, lack of proper controls over eligibility procedures could result in future questioned costs that could be material to the program. Review of income calculations was also not always evident, as errors were noted in several files tested as well. As indicated, we did identify some clients in our review that did not meet established income guidelines and who received CSBG services. The value of those services received as well as our analysis of the impact on the total CSBG program resulted in estimated expenses that would not be material to the CSBG program. Recommendation: Community Resources, Inc. should design adequate internal controls to ensure that CSBG participant files are being reviewed by an employee, independent of the employee that completed the eligibility determination. The review should specifically ensure that all required documents are maintained with the participant files and that participants are determined to be eligible to receive CSBG assistance. A sign-off in the file should support that the file was independently verified and that the reviewer concurs with the staff person who made the eligibility determination initially and certified to that effect in the file. Any errors would be immediately investigated and resolved to help prevent ineligible clients from being served.