EIN: 620639154
UEI: K8NWMDKEGXK3
Audited by: David M Ellis, CPA
Oversight agency: 84 [Department of Education]
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Data as of August 28, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 27, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 27, 2026 (28 days from today).
What is a management decision? →FAC accepted this audit on April 1, 2024 — management decision was due October 1, 2024.
FAC accepted this audit on March 6, 2024 — management decision was due September 6, 2024.
Reconciliations were not properly performed throughout the year. Cause: Inconsistent and incomplete implementation of controls due to staff vacancies and change in accounting software during the fiscal year. Effect or potential effect: Errors could go unnoticed, causing overall misrepresentation of financial information. There were numerous material adjustments made during the audit, including adjustments to beginning net assets (prior period adjustments). Recommendation: There should be accounting policies and procedures in place that document the initial, timely reconciliations of general ledger accounts each month. A review should then be performed by a qualified individual or committee having experience with such oversight. Management’s response: See Management’s Corrective Action Plan.
Show full finding ▾Hide full finding ▴2022-001 – Untimely Reconciliation of Account Balances Criteria: The Organization’s account balances should be reconciled in a timely manner. Condition: Reconciliations were not properly performed throughout the year. Cause: Inconsistent and incomplete implementation of controls due to staff vacancies and change in accounting software during the fiscal year. Effect or potential effect: Errors could go unnoticed, causing overall misrepresentation of financial information. There were numerous material adjustments made during the audit, including adjustments to beginning net assets (prior period adjustments). Recommendation: There should be accounting policies and procedures in place that document the initial, timely reconciliations of general ledger accounts each month. A review should then be performed by a qualified individual or committee having experience with such oversight. Management’s response: See Management’s Corrective Action Plan.
The Organization has hired a full-time accountant to perform the day-to-day accounting functions, which had previously been outsourced. Management will review monthly reconciliations and financial statements, ensuring the information reconciles and is derived directly from the accounting system. In the short term, the Organization will also continue with the oversight of an external bookkeeping firm for the month-end close financial statements. Lastly, the deliverables of this process will be presented to the Board of Directors.
FAC accepted this audit on September 27, 2022 — management decision was due March 27, 2023.
Improper allocation of costs to grant programs requested for reimbursement. See 2021-001 in the financial statement finding section above for detail. Cause: Inconsistent and incomplete implementation of controls due to staff vacancy for the responsible party over financial reporting during the fiscal year. Effect or potential effect: Potential penalties and interest. See 2021-001 in the financial statement finding section above for detail. Questioned costs: $225,960 of actual known costs were calculated based on the information described in the context section below. Context: During the reconciliation of payroll to the general ledger and subsequently to the salaries billed under the program, it was determined that the salary costs applied and billed under the program were greater than the actual payroll costs incurred during the period resulting in overbillings. Repeat findings: There were no prior year findings. Recommendation: Improved application and monitoring of controls. See 2021-001 in the financial statement finding section above for detail. Management?s response: See Management?s Corrective Action Plan.
Show full finding ▾Hide full finding ▴2021-001 ? Allowable Costs Federal Program: 84.027A ? Special Education Cluster ? Grants to States (IDEA, Part B) Criteria: Allowable costs. See 2021-001 in the financial statement finding section above for detail. Condition: Improper allocation of costs to grant programs requested for reimbursement. See 2021-001 in the financial statement finding section above for detail. Cause: Inconsistent and incomplete implementation of controls due to staff vacancy for the responsible party over financial reporting during the fiscal year. Effect or potential effect: Potential penalties and interest. See 2021-001 in the financial statement finding section above for detail. Questioned costs: $225,960 of actual known costs were calculated based on the information described in the context section below. Context: During the reconciliation of payroll to the general ledger and subsequently to the salaries billed under the program, it was determined that the salary costs applied and billed under the program were greater than the actual payroll costs incurred during the period resulting in overbillings. Repeat findings: There were no prior year findings. Recommendation: Improved application and monitoring of controls. See 2021-001 in the financial statement finding section above for detail. Management?s response: See Management?s Corrective Action Plan.
Management?s Response: Under the direction of the Executive Director, in May, 2021, The Arc of Tennessee, Inc. has contracted with a bookkeeping firm, Luca Business solutions, to ensure monthly reconciliations are completed timely and accurately. In addition, we have transitioned our financial accounting software to ensure that expenses requested for reimbursement are properly accounted for and that payroll records and invoices are readily accessible. Lastly, we have reviewed and continue to utilize the Tennessee -Uniform Reporting Requirements and Cost Allocation Plans for Subrecipients of Federal and State Grant Monies policies. Anticipated completion date: completed as of audit report date.
The Organization requested reimbursement for costs not yet incurred. Cause: Inconsistent and incomplete implementation of controls due to staff vacancy for the responsible party over financial reporting during the fiscal year, in addition to management override of controls. Effect or potential effect: Potential penalties and interest. See 2021-002 in the financial statement finding section above for detail. Questioned costs: $225,960 of actual known costs were calculated based on the information described in the context section below. Context: During the reconciliation of payroll to the general ledger and subsequently to the salaries billed under the program, it was determined that the salary costs applied and billed under the program were greater than the actual payroll costs incurred during the period resulting in overbillings. Repeat findings: There were no prior year findings. Recommendation: Improved application and monitoring of controls. See 2021-002 in the financial statement finding section above for detail. Management?s response: See Management?s Corrective Action Plan.
Show full finding ▾Hide full finding ▴2021-002 ? Period of Performance Federal Program: 84.027A ? Special Education Cluster ? Grants to States (IDEA, Part B) Criteria: Period of performance. See 2021-002 in the financial statement finding section above for detail. Condition: The Organization requested reimbursement for costs not yet incurred. Cause: Inconsistent and incomplete implementation of controls due to staff vacancy for the responsible party over financial reporting during the fiscal year, in addition to management override of controls. Effect or potential effect: Potential penalties and interest. See 2021-002 in the financial statement finding section above for detail. Questioned costs: $225,960 of actual known costs were calculated based on the information described in the context section below. Context: During the reconciliation of payroll to the general ledger and subsequently to the salaries billed under the program, it was determined that the salary costs applied and billed under the program were greater than the actual payroll costs incurred during the period resulting in overbillings. Repeat findings: There were no prior year findings. Recommendation: Improved application and monitoring of controls. See 2021-002 in the financial statement finding section above for detail. Management?s response: See Management?s Corrective Action Plan.
Management?s Response: Under the direction of the Executive Director, The Arc of Tennessee, Inc. has multiple individuals at the organization, as well as a third-party bookkeeping firm monitoring balances incurred and related requests for reimbursement. Anticipated completion date: completed as of audit report date.
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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