Eastern Kentucky PRIDE, Inc.

Condition: Reporting of grant income and expenditures to the federal award agency did not have the proper controls in place to detect and prevent inaccurate amounts. Criteria: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effectiveinternal control over the Federal award that provides reasonable assurance that the non-Federalentity is managing the Federal award in compliance with Federal statutes, regulations, and the termsand conditions of the Federal award. These internal controls should be in compliance with guidancein “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: Internal controls were inadequate over the grant reporting process. Effect: Reporting under grants may be inaccurate without a secondary review.Recommendation: Procedures should be implemented requiring an individual to perform a secondary review of grant reporting and supporting documentation prior to submission.

Finding 2022-001: Inadequate internal controls over grant reporting Type of Finding: Significant Deficiency Condition: Reporting of grant income and expenditures to the federal award agency did not have the proper controls in place to detect and prevent inaccurate amounts. Criteria: Per 2 CFR section 200.303(a), a 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. 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 or the “Internal Control Integrated Framework”, issued by the Committee Sponsoring Organizations of the Treadway Commission (COSO). Cause: Internal controls were inadequate over the grant reporting process. Effect: Reporting under the Appalachian Regional Commission grant was not accurate and overreported expenditures. Recommendation: Procedures should be implemented requiring an individual to perform a secondary review of grant reporting and supporting documentation prior to submission. Views of Responsible Officials and Planned Corrective Actions: PRIDE agrees with the finding and recommended procedures will be implemented.

Finding 2022-002 Appalachian Regional Commission Partnership for Opportunity and Workforce and Economic Revitalization Initiative Assistance Listing No. 23.002 - ARC Contract No. PW-19726-IM-19 Grant Period - Year Ended June 30, 2022 Condition: As discussed at Finding 2022-001, reporting of grant income and expenditures for the grant were not reported accurately. The grant reported $1,150,000 in revenues and expenditures while accounting records support $1,141,767 of revenues and expenditures. Reported overage of revenues and expenditures and remaining grant funds totaled $8,233. Recommendation: Grant reporting should be amended to match the accounting records and remaining grant funds should be returned to the granting agency. Views of Responsible Officials and Planned Corrective Actions: PRIDE agrees with the findingand will be amending reporting and will be contacting the grant agency for guidance on returning grant funds.