CEASE, INC.Non-Profit

FINDING NO. 2019-001: Lack of single audit in the prior year, CFDA # 16.575 The Organization did not meet the audit requirement for the fiscal year ended June 30, 2018 in accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Criteria: A non-Federal organization that expends $750,000 or more during the non-Federal organization s fiscal year in Federal awards must have a single audit conducted in accordance with ?200.514 scope of audit except when it elects to have a program-specific audit conducted in accordance with paragraph (c) of ?200.501 of the Uniform Guidance. Cause of Condition: The Organization was unaware of the need for a single audit due to a lack of knowledge regarding audit requirements of federal awards when expending $750,000 or more. Recommendation: Auditor recommends management and those charged with governance obtain adequate knowledge of federal award audit requirements in order to properly assess the need for a single audit and to properly provide a Schedule of Expenditures and Federal Awards in accordance with their audit responsibilities under ?200.508 of the Uniform Guidance. Action Taken: The Organization elected a new Board of Directors and have discontinued operations and are in the process of liquidating the assets and paying off debts.

FINDING NO. 2019-002: Noncompliance with the Tennessee Office of Criminal Justice Programs (OCJP) Grants Manual regarding the Victims of Crime Assistance (VOCA) grant #26663 Based on random samples, the following were noted: 1. The Organization used personnel to match the grant, who were partially and/or fully funded by another federal source. 2. The Organization did not have supporting documentation for all expenses charged to the grant and the general ledger does not support the expenses reported on the reimbursement invoices. 3. The Organization's time and attendance records were not in compliance with OCJP requirements. Grant numbers were either missing or incorrect, one employee's timesheet was missing a name, some employees names were incorrect, one timesheet had incorrect allocation to the VOCA grant, and no documentation provided to trace salaries to the monthly reimbursement reports. 4. The Organization's personnel files were not in compliance with OCJP requirements. Documentation of all training or certification received is not present or complete in all files tested. 5. The Organization's travel reimbursements were not in compliance with OCJP requirements. Methods of travel and grant numbers were missing from the reimbursement documents and in several instances tested, mileage was reimbursed at a rate in excess of the approved state rate. 6. The Organization's time and attendance records for volunteers were not in compliance with OCJP requirements. Grant numbers were not present, hours were not clearly allocated to the appropriate grant, and signatures were not present. Criteria: According to the OCJP Grants Manual: 1. Federal Grant funds may be used to pay the pre-set percentage of the cost of a project. The remaining non-federal share must be in cash or in-kind from non-federal funds. It is the organization's responsibility to understand where all funds originate and to know what can be used as match against other fund sources. 2. The grant subrecipient is required to establish and maintain grant accounting systems and financial records to accurately account for funds awarded to them. The recipient must have a financial management system in place that is able to record and report on the receipt, obligation, and expenditure of grant funds. 3. Accurate time and attendance records are required to be maintained for all personnel whose salary is charged to the project. These records should contain, at a minimum, the following information: Date (day, month, and year), employee's name, position title, total daily hours charged to the project, employee's signature, project director's or supervisor's signature, and grant number. 4. Agencies are required to maintain personnel files for all staff employed by grant monies or volunteers providing direct services to clients. These records should minimally contain the following information: Documentation of verified character or employment references; agency application or resume; signed release of information granting the organization permission to obtain a background check and to conduct reference checks; job description; documentation of training or certification received such as the topic, presenter, length of training, dates; documentation of minimum qualifications; and documentation of background checks according to agency policy. 5. All expenditures for travel should be substantiated by travel vouchers which contain the following information: Name of employee, travel departure point(s) and destination(s), method of travel with documentation, date and time of departure and return, signature of employee, approval signature of project director or supervisor, and grant number. The subrecipient may use any form that provides the above information. All travel claims must be specifically authorized in the approved budget and must be related to project goals. The Organization must comply with the Comprehensive Tennessee Travel Regulations Reimbursement Rate Schedule or their own written travel reimbursement rate, whichever is lower. 6. Volunteer services must be documented and supported by the same methods used by the recipient organization for its own employees. Cause of Condition: 1. The Organization was unaware of which funds were considered "Federal" funds. 2. The Organization was unprepared for the increase in the volume of documents to track, reconcile, and maintain as a result of the expanding services and personnel as they placed their focus on the success of their programming. The Financial Director used a certain method in QuickBooks to enter an amount into the monthly reimbursement reports for each category without maintaining detailed back-ups for the amounts requested on the reports. The Financial Director failed to establish and maintain accounting systems and financial records to accurately account for funds awarded to them. 3. The Organization was not familiar with all minimum requirements in the OCJP grants manual regarding time and attendance records. 4. The Organization was aware of the amount of training hours required but did not file training or certification documents in each personnel file. 5. The Organization was not familiar with all minimum requirements in the OCJP grants manual regarding travel vouchers. 6. The Organization was not familiar with the requirements in the OCJP grants manual regarding documentation of volunteers and their time and attendance records. Recommendation: The auditor recommends management and those charged with governance carefully read and review all grant requirements for all grants in which CEASE receives funds in order to properly comply with all laws, regulations, and grant contracts. Action Taken: The Organization elected a new Board of Directors and have discontinued operations and are in the process of liquidating the assets and paying off debts.

FINDING NO. 2019-003: Lack of internal controls over a federal award The Organization failed to establish and maintain grant accounting systems and financial records to accurately account for funds awarded to them. Criteria: Management is responsible for implementing systems designed to achieve compliances with applicable laws, regulations, contracts, and grant agreements. The subrecipient is required to establish and maintain grant accounting systems and financial records to accurately account for funds awarded to them. The accounting system must meet the criteria found in the OCJP Grants Manual. Cause of Condition: Management and those charged with governance were focused on expanding the program services and did not place enough importance on maintaining the financial records in compliance with the grant requirements. Recommendation: Auditor recommends that Management and those charged with governance reassess the financial accounting systems as they apply to federal programs and design programs and controls to assure that grant accounting systems comply with all grant requirements. Action Taken: The Organization elected a new Board of Directors and have discontinued operations and are in the process of liquidating the assets and paying off debts.

FINDING NO. 2019-004: Ineffective oversight and operation of internal controls by management and those charged with governance, CFDA # 16.575 The Organization did not follow their fiscal policies and procedures as outlined in their Employee Handbook. Criteria: Management is responsible for (1) designing, implementing, establishing, and maintaining effective internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, including internal controls over federal awards, and for evaluating and monitoring ongoing activities to help ensure that appropriate goals and objectives are met; (2) following laws and regulations; (3) ensuring that there is reasonable assurance that government programs are administered in compliance with compliance requirements; and (4) ensuring that management and financial information is reliable and properly reported. Cause of Condition: The written policy is that four (4) persons authorized to sign checks for the Organization are the Chairperson, Co?Chair, Treasurer, and Executive Director. Two of the four are required to sign all checks. The Organization?s checks contained only one signature. In some instances, an unauthorized signer was used. Recommendation: Auditor recommends that management and those charged with governance review their fiscal policies and procedures, update them as necessary, and follow the procedures as written. Action Taken: The Organization elected a new Board of Directors and have discontinued operations and are in the process of liquidating the assets and paying off debts.