Florida Governor's Council on Indian Affairs, Inc.Non-Profit

Segregation of duties (2020-003)(Disclosed as 2020-002 in section II) Condition: Based on our review of the Council's internal control structure as it related to cash, disbursements and payroll it was noted that there was a lack of segregation of duties. Criteria: 2 CFR 200.303(a) OMB Guidance states 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. Effect: The lack of segregation of duties may result in improper cash management and unallowable costs being paid with Council funds. The lack of segregation of duties could also lead to the risk of misappropriation of assets and misstatements of the financial statements. Cause: The Council has one full-time Controller who performs incompatible duties related to the Council?s cash receipts, disbursements and payroll cycle. The Controller is responsible for preparing the grant draw downs, preparing checks, processing payments, preparing bank reconciliations, preparing payroll and monthly financials. The Controller also enters all transactions into QuickBooks accounting software. All functions are under the supervision of the Executive Director. Auditors' Recommendation: Due to the size of the Council, segregation of all accounting responsibilities is not feasible. However, certain measures should be taken to segregate responsibilities over cash, disbursements, payroll and the reconciliation of bank accounts to mitigate the risk of misappropriation of assets and misstatement of the financial statements. The Council could reduce the risk by outsourcing the review of financial information to an independent accountant who can review monthly schedules and reconciliations prepared by the Controller on a monthly basis. The Council could also ask current board members to volunteer their time in the monthly review. Views of Responsible Officials and Planned Corrective Actions: The Council realizes that we have a small staff that must perform multiple duties within the program structure that may be regarded as performing outside the guidelines of a non-profit grantee. We have cross trained our employees to perform office duties, however it should be noted that employees do not have the accounting knowledge to check the accounting procedures for discrepancies. The Council believes that by hiring an independent accounting professional to perform the duties of checks and balances against the Controller monthly accounting ledgers will greatly benefit the Florida Governors Council on Indian Affairs, Inc. and rectify the segregation of duties mentioned. At this time, we have hired the accounting professional.

Approval and filing of cash disbursements 2020-004 (2019-002 Repeat Finding) Condition: Based on audit procedures performed, it was determined there were instances that internal controls related to the review and approval of cash disbursements had not been followed as documented and some cash disbursements were missing proper support. Criteria: 2 CFR 200.303(a) OMB Guidance states 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. 2CFR 200.403(g) OMB Guidance states costs must be adequately documented in order to be allowed under Federal awards. Effect: The lack of internal controls over the compliance requirements may result in unknowingly submitting incorrect information, improper cash management, paying with federal funds for unallowable activities, unallowable costs, or unsupported costs being charged to the Federal award. We did not identify any reportable instances of noncompliance as part of the testing procedures performed. Cause: Not following policies and procedures as documented during the review process of supporting documentation. Auditors? Recommendation: It is recommended that the Council follow its documented policies and procedures and maintain documentation of proper support and approvals for all cash disbursements in accordance with the appropriate Federal program regulations as well as the specific grant contract. Views of Responsible Officials and Planned Corrective Actions: Florida Governor?s Council on Indian Affairs, Inc., agrees with the finding. The disbursements viewed were processed with lack of proper support as documented in our policy and procedures. This was done by a former employee who had second check signature rights at the time. They were processed while the Executive Director was out of state attending a conference. This employee is no longer employed with Florida Governors Council on Indian Affairs, Inc. All invoices and check request must be on a check request form with proper documentation, signed by the requestor, then reviewed and signed by the Executive Director. If perchance the Executive Director is not in the office, the Administrative Assistant has second signature rights. All outgoing and incoming checks are logged into the mail log. If a check is addressed to the Executive Director, board approval must be given and documented before the check is processed. A board member has agreed to this task.

Finding Number: 2019-003 (Repeat of 2018-001) CFDA Number: 17.265 Program Title: Native American Employment and Training Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting. Grantor: U. S. Department of Labor Contract Number and Year: AB-29289-16-55-A-12/ AB292898S0 (PY2017), AB-29289-16-55-A-12/ AB32438G50 (PY2018) Questioned Costs: $338.44 Condition: Based on audit procedures performed, it was determined that internal controls related to the review and approval of cash disbursements and payroll had not been documented and support for cash disbursements were missing. Criteria: 2 CFR 200.303(a) OMB Guidance states 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. 2CFR 200.403(g) OMB Guidance states costs must be adequately documented in order to be allowable under Federal awards. Effect: The lack of internal controls over the compliance requirements may result in unknowingly submitting incorrect information, improper cash management, paying with federal funds for unallowable activities, unallowable costs, or unsupported costs being charged to the Federal award. The lack of documented controls also affected the controls over the Schedule of Federal Expenditures. We did not identify any reportable instances of noncompliance as part of the testing procedures performed. Cause: This was the result of turnover in the Council, the lack of adequate policies and procedures to be followed by subsequently hired employees, and the absence of employee cross training. Auditors? Recommendation: It is recommended that the Council formally document their internal controls over compliance relating to the appropriate Federal program regulations as well as the specific grant contracts. It is further recommended that the Council maintain copies of these policies and procedures and review them upon personnel changes and the receipt of new Federal and/or State awards. Further, employees should rotate job responsibilities to facilitate appropriate cross training of key positions or functions. Views of Responsible Officials: The Council will formally document their internal controls over compliance relating to Federal program regulations as well as specific grant contracts. The Council will maintain copies of the policies and procedures and review them when there are personnel changes and upon receipt of new Federal and/or State awards. Required reports will be reviewed by Council personnel prior to submission to the oversight agencies. The Council will electronically file within the accounting software copies of approved supporting documentation for all Federal expenditures.

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