Boys and Girls Club of the Big Island

Finding 2021-001 - Accounting by Funding Source Criteria: 2 CFR Uniform Guidance, which also applies to grants, requires accurate, current and complete disclosure of the financial results of each award in accordance with reporting requirements. The accounting records need to show expenditures for each funding source in verifiable detail. Condition: In the prior year and the current year, it is noted that expenditures are tracked in the accounting system by location and not by funding source. Financial reporting by funding source is prepared outside the detailed accounting system. Manually kept supporting schedules contained errors and did not always agree to the Account totals. For example, the supporting schedules for the County of Hawaii CARES Act did not agree to the general ledger or to the financial reports submitted to grantors. As a result, it is difficult to verify that any particular expense is not charged to 2 or more funding sources. Also, there is no easy way to verify that any particular expense is charged to the proper funding source based on the usage of that expense to fulfill the grant?s scope of service. Context and Cause of Condition: A statement of revenues and expenses by funding source was not utilized within the accounting software. Manually prepared spreadsheets contained errors or were not reconciled to the General Ledger were used outside of the accounting software for grant tracking and reporting purposes. Potential Effect: Significant work during the audit was necessary to determine if each funding source was spent appropriately and/or the unspent balances were appropriately stated. Questioned Costs: None Recommendation: We recommend the accounting system be set up per governmental financial management guidelines. For the Boys and Girls Club of the Big Island, this can be easily accomplished by using the class feature in the accounting software of both funding source and location. By using classes for funding source reporting, each expense, and each journal entry can be coded directly to a fund source which allows the verification of the detailed expenditures charged to a grant.

Finding 2021-001 - Accounting by Funding Source Management and staff have worked together to review the tracking and reporting process of the general ledger, programs and funding and made recommendations and changes to improve the data input and reporting procedures to reflect the operations of the organization. Year 2020-2021 was a year of change which included setting up the necessary tracking systems by utilizing the software?s ability to tract by location and funding source. By the end of the fiscal year 2021 adjustments were made and tested for accuracy. Since July 2021, the computer system is being utilized for tracking all funds by location and funding source. Management continues to monitor and verify the process and the efficiency of the software. Chad Cabral, CEO and Debbie Perkins, Finance Director are responsible for the corrective plan by August 31, 2022.

Finding 2021-002 - Incomplete and Incorrect SEFA, Award Listing 14.228, United States Department of Housing and Urban Development, Community Development Block Grants Criteria: Part 200. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart F. Audit Requirements subgroup 47. Auditees Section 200.510, Financial statements: The auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with ? 200.502 Basis for determining Federal awards expended. Condition: ? Two Federal grants were misclassified as County of Hawaii grants (HUD CDBG ADA Accessibility and HUD CDBG Gym and Paving) and therefore excluded from the SEFA. ? Amounts shown on the SEFA did not agree to the revenue and expenses recognized in the general ledger (Holomua, HUD CDBG and HIUW Phase 38) and were not listed under the appropriate United States Department (HUD CDBG and HIUW CARES, Phase 37 and Phase 38). Context and Cause of Condition: Lack of identifying Federal programs and management review of the preparation of the schedule of expenditures of federal awards. Potential Effect: As a result of the condition above, reporting of federal expenditures could be inaccurate and federal compliance requirements may not be adhered. Questioned Costs: None Recommendation: We recommend Management establish procedures and controls to properly identify the funding source of all grant awards and the applicable Award Listing numbers. Management should track the federal funds it receives and review the applicable compliance requirements to ensure proper grant spending, monitoring and reporting.

Finding 2021-002 - Incomplete and Incorrect SEFA, Award Listing 14.228, United States Department of Housing and Urban Development, Community Development Block Grants Misunderstanding of what should be included in the SEFA with Cares funding. Amount spent/billed was used in determining the funds spent which did not include the expense in year 2020. The Boys & Girls Club of the Big Island will contract a designated contractor who is knowledgeable in SEFA reporting requirements to provide oversite and assistance in the completion of the SEFA report. Upon completion of the report, prior to the submittal to Auditors, the report will be reviewed by the CEO. Chad Cabral, CEO and Debbie Perkins, Finance Director are responsible for the corrective plan by August 31, 2022.