Bradley Cleveland Community Services AgencyLocal Government

The Agency requested reimbursement for funds from the grantor agency when checks issued to vendors had not yet been released. Additionally, interfund controls did not prevent the instances of noncompliance.

The Agency requested funds under the grant that were expended prior to the period of performance. Additionally, interfund controls did not prevent the instances of noncompliance.

Condition: The Agency requested reimbursement for funds from the grantor agency when checks issued to vendors had not yet been released. Criteria: Part 3, Section C of the 2021 Compliance Supplement states that under the reimbursement payment method, ?program costs must be paid by non-federal entity funds before submitting a payment request i.e., the non-federal entity must disburse funds for program purposes before requesting payment from the federal awarding agency or pass-through.? Cause: Cash flow creates the need for the Agency to not send some funds to vendors until reimbursed by the Grantor. Effect: The financial condition of the Agency is at risk. The Agency could lose funding f or not complying with grant requirements. Recommendation: Procedures should be implemented to be sure only those funds disbursed are requested for reimbursement. Management Response: Management disagrees with the finding. Their position is that funds are disbursed when checks are cut, regardless of when they are mailed.

Condition: The bank reconciliations were not completed within 45 days of receiving the bank statement in accordance with internal policy during the fiscal year. This resulted in the general ledger not properly closed within two months after fiscal year end. Criteria: Internal control policy requires bank reconciliations to be completed within 45 days of receiving the bank statement. The general ledger should have all journal entries and transactions posted to close the year-end accounting cycle within two months after the fiscal year-end. Cause: Bank reconciliations and year-end close were not completed within the required time frame. Effect: When bank reconciliations are not reconciled timely, it can cause general ledger balances to be incorrect. When the general ledger isn't closed within a reasonable time frame at year-end, the records are not ready for the new accounting cycle of the next fiscal year. Recommendation: Bank reconciliations and the general ledger should be completed within the proper time requirement. Management Response: Management agrees with the finding and will complete bank reconciliations and general ledger close within the required time frames. Bank reconciliation to the general ledge is currently being conducted on a daily basis.

Condition: Five of sixty application files had various errors in documentation. Final benefits to applicants were correct. Criteria: Applicant files must be completed in accordance with the Tennessee Housing Development Agency LIHEAP Operational Manual. Cause: Applications were completed incorrectly due to data entry error. Effect: Errors in application processing could result in incorrect benefits issued. Recommendation: Staff and supervisors should complete applications according to the LIHEAP Operational Manual. Management Response: Management agrees with the finding. Program staff and supervisors will review procedures to determine the LIHEAP Operational Manual is properly followed.

Condition: Vendor agreements were completed on expired forms and were completed for dates over the three year LIHEAP guidelines. Criteria: Vendor agreements must be completed in accordance with the Tennessee Housing Development Agency LIHEAP Operational Manual. Cause: Vendor agreements were not updated or completed outside of the three year guidelines. Effect: Vendor agreements were not in accordance with the LIHEAP Operational Manual. Management Response: Management agrees with the finding. Program staff and supervisors will review procedures to determine the LIHEAP Operational Manual is properly followed.

Condition: Workers compensation insurance was not at minimum insurance coverage requirements per special terms of the grant agreement. Criteria: The grant agreement specifies minimum insurance coverage requirements per special terms and conditions. Cause: Workers compensation was not at the minimum coverage requirement. Effect: Requirements of the grant special terms and conditions were not met. Recommendation: Workers compensation insurance should be insurance carrier to meet the minimum coverage requirement. Management Response: Management will contact the grantor and determine if any exemptions to the requirement apply to the Agency as a quasi-governmental organization. The insurance will be increased to the minimum coverage if required.

Condition: Five of sixty applicant files had various errors in documentation. Final benefits to applicants were correct. Criteria: Applicant files must be completed in accordance with the Tennessee Housing Development Agency LIHEAP Operational Manual. Cause: Applications were completed incorrectly due to data entry error. Effect: Errors in application processing could result in incorrect benefits issued. Recommendation: Staff and supervisors should complete applications according to the LIHEAP Operational Manual. Management Response: Management agrees with the finding. Program staff and supervisors will review procedures to determine the LIHEAP Operational Manual is properly followed.

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