Madonna Center, Inc.

Type of Finding: Significant Internal Control over Compliance Compliance Requirement: Allowable Costs Criteria: The program requires the Center to request actual time worked by qualified employees when requesting reimbursement of funds from the City of San Antonio, as per 2 CFR §200.430(g)(vii). Condition: It was noted the supporting documentation submitted for reimbursement was calculated using budgeted percentages of wages for qualified employees instead of actual time worked. Cause: No procedures are in place to review the supporting documentation submitted for reimbursement was for actual time worked by qualified employees. Effect: Not using actual costs incurred when requesting reimbursement under this program can lead to reimbursement overstatements and non-compliance with the program. Recommendation: We recommend the Center report the reimbursement overstatement to City of San Antonio and correct the error. We recommend the Center develop procedures to review that supporting documentation submitted for reimbursement was for actual time worked. This review should be performed by personnel familiar with the program requirements. Views of Responsible Officials: Management agrees with the finding and will work with the City of San Antonio to correct the issue, and develop review procedures to respond to the finding.

Type of Finding: Significant Internal Control over Compliance Compliance Requirement: Allowable Costs Criteria: The program requires the Center to request actual time worked by qualified employees when requesting reimbursement of funds from the City of San Antonio, as per 2 CFR §200.430(g)(vii). Condition: It was noted the supporting documentation submitted for reimbursement was calculated using budgeted percentages of wages for qualified employees instead of actual time worked. Cause: No procedures are in place to review the supporting documentation submitted for reimbursement was for actual time worked by qualified employees. Effect: Not using actual costs incurred when requesting reimbursement under this program can lead to reimbursement overstatements and non-compliance with the program. Recommendation: We recommend the Center report the reimbursement overstatement to City of San Antonio and correct the error. We recommend the Center develop procedures to review that supporting documentation submitted for reimbursement was for actual time worked. This review should be performed by personnel familiar with the program requirements. Views of Responsible Officials: Management agrees with the finding and will work with the City of San Antonio to correct the issue, and develop review procedures to respond to the finding.

Type of Finding: Significant Internal Control over Payroll Reporting. Compliance Requirement: Allowable costs and cost principles under 2 CFR §200, Subpart E. Criteria: Single audit requires the costs submitted for reimbursement to be accurate, this includes reimbursements for qualified employees. Condition: It was noted the supporting documentation submitted for reimbursement to the City of San Antonio, included incorrect salary information for two qualified employees. This led to a reimbursement overstatement of $2,093. Cause: No procedures are in place by management to determine the qualified employee salary information included on the reimbursement form is correct. Effect: Not using correct salary information for qualified employees can lead overrequesting of funds and result in non-compliance with the program. Recommendation: We recommend the Center work with the funding agency to correct the misstatement. We recommend the Center develop procedures to perform a detailed review of the reimbursement form prior to submission. This review is to determine the correct salary information is used on the reimbursement form for qualified employees. Views of Responsible Officials: Management agrees and will develop review procedures to respond to the findings.

Type of Finding: Significant Internal Control over Payroll Reporting. Compliance Requirement: Allowable costs and cost principles under 2 CFR §200, Subpart E. Criteria: Single audit requires the costs submitted for reimbursement to be accurate, this includes reimbursements for qualified employees. Condition: It was noted the supporting documentation submitted for reimbursement to the City of San Antonio, included incorrect salary information for two qualified employees. This led to a reimbursement overstatement of $2,093. Cause: No procedures are in place by management to determine the qualified employee salary information included on the reimbursement form is correct. Effect: Not using correct salary information for qualified employees can lead overrequesting of funds and result in non-compliance with the program. Recommendation: We recommend the Center work with the funding agency to correct the misstatement. We recommend the Center develop procedures to perform a detailed review of the reimbursement form prior to submission. This review is to determine the correct salary information is used on the reimbursement form for qualified employees. Views of Responsible Officials: Management agrees and will develop review procedures to respond to the findings.

Type of Finding: Significant Internal Control over Federal Laws and Regulations Compliance Requirement: Fair Labor Standards Act per 29 U.S. Code §207(a)(2) Criteria: The Center must pay non-exempt employees that work more than 40 hours in one work week a rate no less than one and half times their current rate, unless otherwise exempt. Condition: It was noted that a non-exempt employee was underpaid for hours worked during the fiscal year. This employee was paid their regular rate for all hours worked over 40 hours in one work week, this led to an underpayment of wages in the amount of $2,587. Cause: No procedures are in place to identify that non-exempt employees are being paid rates for hours worked more than 40 hours in a work week at a rate no less than one and a half times their current rate. Effect: Paying incorrect rates for hours worked over 40 hours in a work week resulted in noncompliance with the Fair Labor Standards Act. Recommendation: We recommend the Center to reimburse the employee for amounts due for all hours worked more than 40 hours in a work week during the fiscal year at a rate of no less than one and a half times their current rate. We recommend the Center establish and implement procedures to review and achieve compliance with the Fair Labor Standards Act and ensure ongoing adherence to its requirements. Views of Responsible Officials: Management agrees and will reimburse the employee for the amounts due for hours worked more than 40 hours in a work week during the fiscal year. Management will develop review procedures to respond to this finding.

Type of Finding: Significant Internal Control over Federal Laws and Regulations Compliance Requirement: Fair Labor Standards Act per 29 U.S. Code §207(a)(2) Criteria: The Center must pay non-exempt employees that work more than 40 hours in one work week a rate no less than one and half times their current rate, unless otherwise exempt. Condition: It was noted that a non-exempt employee was underpaid for hours worked during the fiscal year. This employee was paid their regular rate for all hours worked over 40 hours in one work week, this led to an underpayment of wages in the amount of $2,587. Cause: No procedures are in place to identify that non-exempt employees are being paid rates for hours worked more than 40 hours in a work week at a rate no less than one and a half times their current rate. Effect: Paying incorrect rates for hours worked over 40 hours in a work week resulted in noncompliance with the Fair Labor Standards Act. Recommendation: We recommend the Center to reimburse the employee for amounts due for all hours worked more than 40 hours in a work week during the fiscal year at a rate of no less than one and a half times their current rate. We recommend the Center establish and implement procedures to review and achieve compliance with the Fair Labor Standards Act and ensure ongoing adherence to its requirements. Views of Responsible Officials: Management agrees and will reimburse the employee for the amounts due for hours worked more than 40 hours in a work week during the fiscal year. Management will develop review procedures to respond to this finding.

Type of Finding: Significant Internal Control over Payroll Reporting Compliance Requirement: Allowable Costs Criteria: Under the program requirements, the allowable cost for qualified employees is only 63% of their wages. Condition: It was noted the supporting documentation submitted for a qualified employee on the reimbursement forms to United Way of San Antonio and Bexar County, included allocated cost of wages to the program of 100%. This led to the overstatement of $834. Cause: No procedures are in place to determine qualified employee salary information included on reimbursement forms is correct. Effect: Using unallowable cost allocations can lead to over-requesting of funds and non-compliance with the program.

Type of Finding: Significant Internal Control over Payroll Reporting Compliance Requirement: Allowable Costs Criteria: Under the program requirements, the allowable cost for qualified employees is only 63% of their wages. Condition: It was noted the supporting documentation submitted for a qualified employee on the reimbursement forms to United Way of San Antonio and Bexar County, included allocated cost of wages to the program of 100%. This led to the overstatement of $834. Cause: No procedures are in place to determine qualified employee salary information included on reimbursement forms is correct. Effect: Using unallowable cost allocations can lead to over-requesting of funds and non-compliance with the program.