YMCA Of Memphis & The Mid-SouthNon-Profit

Noncompliance and Significant Deficiency in Internal Control Over Compliance 2025-001 Meals claimed for reimbursement that were served on dates not approved by the State Agency. U.S. Department of Agriculture Child Nutrition Cluster - Summer Food Service Program for Children (SFSP) – AL #10.559 TN Department of Human Services Grant #175TN331N1099 Compliance Requirement – Eligibility Condition: The Organization operates multiple Summer Food Service Program (SFSP) sites across the States of Tennessee and Mississippi. During our audit, we identified meals that were served on dates not approved by the State agency. Although the participants were eligible and properly documented, the meals served on the unapproved date were included in the reimbursement claim submitted to the State. Criteria: The Summer Food Service Program Administration Guide 2024 (current guidance for 2025), Unit 3: Administering the Summer Food Service Program and 7 CFR Part 225 states that sponsors may claim reimbursement only for eligible meals served in accordance with approved meal service times and approved dates of operation. Meals served outside approved dates of operation are not eligible for reimbursement, and meals served outside approved meal service times are only allowed when the State agency approves an exception due to an unanticipated event outside the sponsor's control. Cause: The Organization lacked sufficient internal controls to ensure that meals were served only on dates authorized by the State agency. Effect: As a result, the Organization claimed reimbursement for meals that were not eligible under program requirements. The total questioned costs amounted to approximately $52,556, calculated as follows: 5,617 breakfast meals * $3.09 = $17,342 6,518 lunch meals * $5.40 = $35,214 Context: During the 2025 program year, two selected sites – Campus Elementary and Smart Stars Enrichment Center - served meals on June 10, 2025, despite the approved operating period beginning on June 13, 2025, as authorized by the Tennessee Department of Human Services. No formal request to extend the operating dates was submitted, and no written approval was received prior to meal service. The Organization included these meals in its reimbursement claim, believing it was acting in good faith to meet community needs. However, the absence of documented approval rendered the meals ineligible for reimbursement. A sample of 40 meal count forms for various dates and locations were selected for testing. 2 out of the 40 selections consisted of meals served on an unapproved date, totaling 203 breakfast meals and 207 lunch meals served, with questioned costs of $1,745. A comparison of the State approved site listing with the Organization’s meal service summary revealed 18 additional sites that also served meals prior to the approved beginning date. These sites accounted for 5,414 breakfast meals and 6,311 lunch meals served, with questioned costs of $50,811. Instances were spread across the period of June 2, 2025 through June 30, 2025, resulting in a total of 5,617 breakfast and 6,518 lunch meals improperly claimed, totaling $52,556 in disallowed meals. An audit adjustment was made to reduce SFSP revenue by this amount. These funds will be returned to the State and excluded from the Schedule of Expenditures of Federal Awards and State Financial Assistance. See the chart on the following page and management’s corrective action plan. The locations and unapproved dates of service resulting in known questioned costs are as follows: Recommendation: We recommend the Organization strengthen internal controls over scheduling and monitoring of meal services to ensure that meals are served and claimed only on State approved dates and times. One potential control includes requiring site supervisors to document approved site details, including location, service period, operating dates, and meal times, on each meal count form prior to initiating meal service. Management’s Response: See accompanying management’s corrective action plan.

2025-002 Meal Count Sheets Reviewed but Not Reconciled to Summary Spreadsheet and Claim for Reimbursement U.S. Department of Agriculture Child Nutrition Cluster - Summer Food Service Program for Children (SFSP) – AL #10.559 TN Department of Human Services Grant #175TN331N1099 Compliance Requirement – Activities Allowed Condition: We noted multiple instances in which the meal count forms were reviewed by the State Application Coordinator but not reconciled to the summary spreadsheet and claim for reimbursement for the month. Criteria: 7 CFR Part 225.9(d)(5) states that claims for reimbursement must report sufficient information to justify the reimbursement claimed. In submitting a claim for reimbursement, each sponsor must certify that the claim is correct and that records are available to support the claim. Failure to maintain such records may be grounds for denial of reimbursement. Additionally, USDA guidance on meal claim validation identifies daily meal count forms and consolidated meal count records as key documentation supporting claims for reimbursement. Cause: The existing controls in place were not followed relating to reviewing daily meal count forms and reconciling to the summary spreadsheet and claim for reimbursement. Effect: Ineffective review of meal count forms and lack of reconciliation to summary spreadsheet and claims for reimbursement could potentially result in noncompliance if reimbursement is received for meals not distributed. Context: A sample of 40 daily meal count sheets were selected for testing. The State Application did not adequately tie the daily meal count sheets to the summary spreadsheet for 3 out of 40 selections. Recommendation: Currently, management has a process to reconcile daily meal count sheets to the summary spreadsheet and reimbursement claims. This process includes a second review to be completed prior to submitting the claim reimbursement to the State of Tennessee. We recommend that current internal controls of compliance be reviewed and followed. Management’s Response: See accompanying management’s corrective action plan.

2024-001 Meals claimed for reimbursement that were served on a date not approved by the State Agency. U.S. Department of Agriculture Summer Food Service Program for Children (SFSP) – AL #10.559 TN Department of Human Services Grant #175TN331N1099 Compliance Requirement – Eligibility Condition: The Organization operates multiple Summer Food Service Program (SFSP) sites across the State of Tennessee. During our audit, we identified that meals were served on a date not approved by the State agency. Although the participants were eligible and properly documented, the meals served on the unapproved date were included in the reimbursement claim submitted to the State. Criteria: The Summer Food Service Program Administration Guide 2024, Unit 3: Administering the Summer Food Service Program states that sponsors may claim reimbursement only for meals that meet SFSP requirements. Reimbursement may not be claimed for meals served outside of approved meal service times or approved dates of operation, unless the State agency determines that there was an unanticipated event, outside of the sponsor’s control. Meals served outside of the approved dates of operation are not eligible for reimbursement. Cause: The Organization lacked sufficient internal controls to ensure that meals were served only on dates authorized by the State agency. Effect: As a result, the Organization claimed reimbursement for meals that were not eligible under program requirements. The total questioned costs amounted to approximately $50,966, calculated as follows: 6,224 breakfast meals * $2.98 = $18,529 6,224 lunch meals * $5.21 = $32,437 Context: During the 2024 program year, one selected site - West Tennessee Healthcare Dyersburg Hospital - served meals on August 3, 2024, despite the approved operating period ending on August 2, 2024, as authorized by the Tennessee Department of Human Services. No formal request to extend the operating dates was submitted, and no written approval was received prior to meal service. The Organization included these meals in its reimbursement claim, believing it was acting in good faith to meet community needs. However, the absence of documented approval rendered the meals ineligible A sample of 25 meal count forms for various dates and locations were selected for testing. 1 out of the 25 selections consisted of meals served on an unapproved date, totaling 2,030 breakfast meals and 2,030 lunch meals served, with questioned costs of $16,626. A comparison of the State approved site listing with the Organization’s meal service summary revealed 5 additional sites that also served meals on August 3, 2024. These sites accounted for 4,193 breakfast meals and 4,193 lunch meals served, with questioned costs of $34,341. All instances were isolated to August 3rd, resulting in a total of 6,223 breakfast and 6,223 lunch meals improperly claimed, totaling $50,966 in disallowed meals. An audit adjustment was made to reduce SFSP revenue by this amount. These funds will be returned to the State and excluded from the Schedule of Expenditures of Federal Awards. See the chart below and management’s corrective action plan. $ 2.98 $ 5.21 Location Date Served Breakfast Meals Lunch Meals West TN Healthcare Dyersburg Hospital 8/3/2024 2030 2030 $ 16,626 New Mt. Zion Church 8/3/2024 1323 1323 10,835 Greater St John Missionary Baptist Church 8/3/2024 595 595 4,873 West TN Healthcare Milan Hospital 8/3/2024 903 903 7,396 Davy Crockett Mall 8/3/2024 1372 1372 11,237 6,223 6,223 $ 50,966 Breakfast Rate Lunch Rate Known Questioned Costs Recommendation: We recommend the Organization strengthen internal controls over scheduling and monitoring of meal services to ensure that meals are served and claimed only on State approved dates and times. One potential control includes requiring site supervisors to document approved site details, including location, service period, operating dates, and meal times, on each meal count form prior to initiating meal service.

U.S. Department of Agriculture Child and Adult Care Food Program (CACFP) ? AL #10.558 TN Department of Human Services Grant # 175TN331N1099 Condition: We noted several instances in which the meal count forms were not reviewed by the State Application Coordinator and reconciled to the summary spreadsheet and claim for reimbursement for the month. Criteria: Title 7 of the Code of Federal Regulations, Section 226.10(c) states, ?In submitting a claim for reimbursement, the institution shall certify that the claim is correct and that records are available to support the claim.? Cause: The existing controls in place were not followed relating to reviewing daily meal count forms and reconciling to the summary spreadsheet and claim for reimbursement. Effect: Ineffective review of meal count forms and lack of reconciliation to summary spreadsheet and claims for reimbursement could potentially result in noncompliance if reimbursement is received for meals not distributed. Context: A sample of sixty (60) daily meal count sheets were selected for testing. The State Application Coordinator did not sign off on the file folder for three (3) selections and did not adequately tie the daily meal count sheets to the summary spreadsheet for three (3) other selections. Recommendation: Currently, management has a process to reconcile daily meal count sheets to the summary spreadsheet and reimbursement claims. This process includes a second review to be completed prior to submitting the claim reimbursement to the State of Tennessee. We recommend that current internal controls of compliance be reviewed and followed. Management?s Response: See accompanying management?s corrective action plan.

Reimbursement Claims not Supported by Meal Count Sheets U.S. Department of Agriculture Child and Adult Care Food Program (CACFP) ? AL #10.558 TN Department of Human Services Grant # 175TN331N1099 Condition: For the monthly reimbursement claims, we noted several instances in which the amount requested did not reconcile to the underlying daily meal count forms provided by site supervisors. We noted instances in which the reimbursement claims requested were overstated (more meals claimed than what the daily meal count forms reported) as well as instances in which the reimbursement claims requested were understated (more meals reported on the daily meal count forms than claimed). Criteria: Title 7 of the Code of Federal Regulations, Section 226.10(c) states, ?In submitting a claim for reimbursement, the institution shall certify that the claim is correct and that records are available to support the claim.? Cause: There are inadequate controls in place relating to submitting the claim for reimbursement. Effect: Incorrect claims for reimbursement were made which resulted in noncompliance with the Activities Allowed or Unallowed compliance requirement of the Uniform Guidance. As noted above, some claims were overstated and some were understated, but our sample yielded a net underbilling of ($2,394). Since the result of our testing was a net underbilling there are no questioned costs to report. Context: A sample of two months was selected for testing and from those, a total of 42 days was selected from nine different sites to reconcile the daily meal count forms to the reimbursement claims. We noted discrepancies between the daily meal count forms and reimbursement claims in four of the nine sites. Recommendation: We recommend policies and procedures be implemented that include a reconciliation of the daily meal count forms to the claim for reimbursement which should be reviewed and approved before submission to the State of Tennessee. Management?s Response: See accompanying management?s corrective action plan.

Attendance Timesheets Did Not Support Billing Invoices U.S. Department of Health and Human Services Child Care and Development Block Grant ? AL #93.575 TN Department of Human Services Condition: Attendance hours reported on the daily timesheets were not properly reconciled to the billing invoices prior to the reimbursement submission to the State of Tennessee causing hours billed to be both over and under billed. Criteria: The grant agreement with the State of Tennessee states at A.14 ?The Grantee shall maintain documentation of daily attendance, hours and location of each child whom services are provided under this Grant Contract. The Grantee shall document attendance by requiring each child to be signed in and out. The Grantee shall maintain complete and accurate records of all children?s attendance at childcare facilities in sufficient detail to readily substantiate any invoice the Grantee submits to the State and shall submit the same with each invoice.? Additionally, the grant agreement states ?Sixty dollars ($60.00) per day per child for whom the Grantee provides more than three (3) hours of temporary/emergency childcare under this grant Contract. Thirty dollars ($30.00) per day per child for whom the Grantee provides up to three (3) hours of temporary/emergency childcare under this Grant Contract.? Cause: There are inadequate controls in place relating to reviewing and approving the weekly billing invoices. Effect: Incorrect billings for reimbursement were made which resulted in noncompliance with the Activities Allowed or Unallowed compliance requirement of the Uniform Guidance. As noted above, some billings were overstated and some were understated, but our sample yielded a net underbilling of ($150). Since the result of our testing was a net underbilling there are no questioned costs to report. Context: A sample of sixty children were selected from four different reporting weeks and twelve different sites. We noted discrepancies between the daily timesheet documentation and the billing invoices for ten children out of the sixty, which represented five different sites. Recommendation: We recommend policies and procedures be implemented that include a reconciliation of the daily timesheet documentation to the billing invoice which should be reviewed and approved before submission to the State of Tennessee. Management?s Response: See accompanying management?s corrective action plan.