HOUSTON BALLET FOUNDATION

2020?001 Allowable Costs/Cost Principles Information on Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters) Criteria or Specific Requirement: 2 CFR 200.303 of the Uniform Guidance requires that non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Condition: Five (5) of the thirty-seven (37) items selected for testing allowable costs/cost principles did not have any evidence of a review and approval of the transactions by the authorized official overseeing the grant compliance. Questioned Cost: There are no questioned costs noted related to this finding. Context: In reviewing the items selected for testing allowable costs/cost principles recorded, the Foundation was not able to provide any evidence that the expense transactions in question were reviewed and approved by the authorized official overseeing the grant compliance. Effect: The failure to maintain evidence of review and approval of the expenses can lead to noncompliance with laws and regulations. Cause: The Foundation failed to maintain evidence that the entries for grant related payroll expenses were reviewed and approved prior to recording the transaction. Recommendation: We recommend that the Foundation maintain evidence of review and approval from an authorized official of all expenses recorded. We recommend that the Foundation implement a policy for alternative approvers in the absence of the CFO. Management response: We agree with the finding. The transactions in question were reviewed and approved by the Chief Financial Officer or Special Advisor, but did not always include a signature approval by the Chief Financial Officer or Special Advisor. For fiscal year 2021, the Chief Financial Officer or Special Advisor will continue to review and approve all transactions and will include a signature approval on all payroll records related to grant expenditures.

2020?002 Reporting Information on Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters) Criteria or Specific Requirement: 2 CFR 200.303 of the Uniform Guidance requires that non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Condition: The two (2) quarterly reports selected for testing did not have any evidence of review and approval prior to the submission of the report. The two (2) request for reimbursement reports tested did not have any evidence of review and approval prior to the submission of the report. Questioned Cost: There are no questioned costs related to this finding. Context: In testing the quarterly performance reports and the request for reimbursements reports submitted to the grantor under the reporting compliance requirement, the Foundation was not able to provide any evidence that such reports were reviewed and approved prior to submission. Effect: The failure to maintain evidence of review and approval of a report may result in an inaccurate submission to the grantor which can lead to noncompliance with laws and regulations. Cause: The Foundation failed to maintain evidence that the required reports submitted to the grantor were reviewed and approved by an authorized personnel prior to submission. Recommendation: We recommend that the Foundation maintain evidence of review and approval by an authorized official of the quarterly reports and request for reimbursements prior to submission to the grantor. Management response: We agree with the finding. The procedure of having the Chief Financial Officer or Special Advisor document approval prior to submitting them to the grantor will be implemented in fiscal year 2021.