Monarch Immigrant Services

Criteria: Monarch Immigrant Services is responsible for establishing and maintaining effective internal control over financial reporting and compliance with federal program requirements in accordance with 2 CFR 200.303. Proper internal control requires appropriate segregation of duties; documented review and approval of expenditures; and adequate oversight of costs charged to federal programs. Controls must prevent the approval of transactions by the same individual who incurs or benefits from those transactions. Condition: The Organization uses credit cards for a variety of program and administrative costs. The Executive Director performs the monthly review of all credit card expenditures. During our audit, we noted that this review includes the Executive Director’s own credit card activity, and no secondary or independent review is documented for those expenditures. Cause: The Organization has not implemented a control requiring an individual independent of the Executive Director to review their credit card charges. As a result, the Executive Director is responsible for reviewing transactions they initiate, creating a lack of segregation of duties. Effect or potential effect: The absence of an independent review increases the risk that unallowable, unsupported, or otherwise non-compliant costs charged to federal programs may go undetected and could result in improper charges to federal awards.

Criteria: Monarch Immigrant Services is responsible for establishing and maintaining effective internal control over compliance with the allowability requirements of federal awards, in accordance with 2 CFR 200.302, 2 CFR 200.303, and 2 CFR 200.403. An effective control system requires accurate, complete, and properly reviewed expenditure reporting to ensure that costs charged to federal programs are allowable, allocable, and not duplicated. Condition: The Organization submits monthly expenditure reports to the funding agency. The Executive Director reviews these reports for accuracy. During our audit, we noted that a monthly report included one week of payroll that had already been reported in a prior month, resulting in a duplicated charge. The Organization self-reported the issue to the funding agency for remediation and corrected their schedule of expenditures of federal awards to reflect the correct amount for expenditures under the program. Cause: The Organization’s current review control over expenditure reporting was not sufficiently designed or executed to detect errors in the timing and completeness of payroll costs submitted to the federal program. The control did not prevent or identify the duplicated payroll reporting in a timely manner. Effect or potential effect: Undetected errors of this nature may result in over-reporting of expenditures and the Organization’s receipt of unearned federal funds. Errors in reporting reduce the reliability of expenditure submissions and increase the risk of noncompliance with federal allowability requirements

Criteria: Monarch Immigrant Services is responsible for establishing and maintaining effective internal control over program participant eligibility in accordance with federal program requirements and 2 CFR 200.303. A proper internal control system requires complete and accurate documentation of eligibility determinations; evidence of review and approval by appropriate personnel; and proper entry of participant information, including case numbers, into the Organization’s case management system. These controls are necessary to ensure only eligible individuals are enrolled in the program. Condition: All applicants are screened by a licensed therapist and assessed for eligibility under program requirements. Applicants determined to be eligible were verbally reviewed with the Program Coordinator and Executive Director; however, this review and approval process was not documented until May 2025. As a result, eligibility determinations made prior to that date lacked documented evidence of review or approval by personnel independent of the initial therapist assessment. Cause: Program staff responsible for eligibility determinations worked in the same physical location, and the Organization relied on informal, on-site communication prior to May 2025, rather than maintaining formal documentation of review and approval. Effect or potential effect: Failure to document eligibility review procedures increases the risk that ineligible participants may be approved for services. The absence of documented oversight undermines the effectiveness of internal controls over compliance and increases the risk of noncompliance with federal eligibility requirements.

Criteria: Monarch Immigrant Services is responsible for establishing and maintaining effective internal control over compliance with federal requirements related to activities allowed and allowable costs, as required by 2 CFR 200.302, 2 CFR 200.303, and 2 CFR 200.403. A proper internal control system requires documented review and approval of individual costs charged to federal awards, verification that costs are allowable, reasonable, and allocable to the benefiting program, and consistent documentation supporting cost allocations when costs benefit multiple programs. Condition: The Executive Director reviews all program costs for allowability and documents approval when costs are determined to be allowable. However, during the year under audit, the review and approval of the allocation of allowable costs was not consistently documented. Some costs appeared to rely on alignment with the program budget as the primary evidence of allocation rather than a documented review of the specific expenditure. Cause: The Organization’s current processes rely on budget-to-actual monitoring as a proxy for the allocation of certain costs, resulting in inconsistent documentation of review and approval for these allocable transactions. A formalized process to document the allocation of certain costs has not been fully implemented. Effect or Potential Effect: Failure to consistently document the allocation review process increases the risk that costs may be inappropriately allocated to federal programs. This undermines the effectiveness of internal controls over compliance and increases the risk of noncompliance with federal cost principles.

Monarch Immigrant Services is responsible for implementing and maintaining a proper internal control system over program participant's eligibility. A proper internal control system requires that documentation supporting compliance related to eligibility are within the program requirements, including the listing of program case numbers and proper entry into the Organization's case management system, be properly reviewed to prevent ineligible participants in the program. All applicants are screened by a licensed therapist and evaluated for eligibility compliance with the program requirements. Any applicants determined to be eligible for the program are reviewed verbally with the Program Coordinator. The review and approval process to determine eligibility is not documented. All responsible officials of the program operate in the same location. As a result, the review process is conducted informally on-site. Failure to document a review process increases the risk of non-compliance with eligibility requirements and undermines the effectiveness of internal controls over compliance. The Organization should develop and implement a process to formalize the documentation of the review process regarding eligibility. Documentation should include evidence of an individual separate from the therapist reviewing all approved applicants, including a listing of all case numbers in the review. Jason Baker, Executive Director