THINK OF USNon-Profit

Finding 2023-002: Disbursement Approval and Documentation Information on the Federal Program: 93.471 Criteria or Specific Requirement: CFR 200.303 specifies that the Organization must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization has certain items which are set to auto-pay (i.e. accounting services, insurance and retirement payments), and as a result no payment authorization is available. In addition we noted several instances where the contract was meant to serve as payment authorization (there was no specific authorization of disbursement). Cause: The Organization has not required a separate authorization for payment of certain items that are either on auto-pay or are paid based on contracts. The Organization has a payables processing system that could maintain approval and payment documentation as well as the associated supporting documents, but is not using it to process some payments.Effect or Potential Effect: It is critical to maintain payment authorization support to avoid unauthorized payments, questioned costs and other potential issues. Questioned Costs: None noted. Context: Although none of the items noted without authorization were charged to the major program, our testwork consisted of statistical sampling as well as substantive testwork over various samples of expenditures, and were determined to be representative of the population for the fiscal year under audit. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that the Organization ensure that documentation of authorization is documented and available.

Finding 2022-001: Payroll Information on the Federal Program: 93.471 Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430 “Compensation – personal services” requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, these records must comply with established accounting policies and practices of the non-Federal entity. Condition: Subsequent to the completion of the 2021 audit, the Organization modified its timesheet process for employees that work on the Federal pass-through grant. The new methodology was in effect for the last two months of 2022. The time allocated is now based on actual time, and we were able to tie the amount calculated based on hours reported to the invoice submitted to the pass-through entity for the month. However, there was no direct audit trail to the amount in the general ledger (the GL allocation was posted for the quarter in total). In addition, if employees work over the time allowed by the budget the amount is manually adjusted down before allocation. Also, the supervisory approval of the timesheets is over a month report that lists only the names of the employees (does not show the hours reported). Cause: An allocation methodology based on actual timesheets was implemented at the end of 2022, but we identified certain recommended improvements. Effect or Potential Effect: The Organization could inadvertently mischarge salaries and wages to its various programs. Questioned Costs: Undetermined. Context: This is deemed to be systemic in nature. Identification as a Repeat Finding, if Applicable: See prior year 2021-001 Recommendation: We recommend that the Organization revisit the procedures in the current year to ensure that the time allocation can be easily verified (i.e. record the allocations on a monthly basis at a minimum, and maintain a schedule to reconcile amount per pay period to total entered in the general ledger). The Organization should be careful to document that if time allocated to the Federal project is manually reduced that is does not result in overcharging a different program. The approval of the timesheets should be on a report that shows the actual time that is being reviewed/approved.

Finding 2022-002: Procurement Information on the Federal Program: 93.471 Criteria or Specific Requirement: CFR 200.320 specifies methods of procurement that must be used including competitive bidding where applicable, and limits the use of procurement by noncompetitive proposals to specific instances or situations including 1) the item is available only from a single source, 2) The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation, 3) the Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity, or 4) after solicitation of a number of sources, competition is determined inadequate. Condition: The Organization revisited their procurement policy following the completion of the fiscal year 2021 audit. As a result of the timing, vendors were hired prior to the integration of the updated procurement procedures and we noted instances where contractors were engaged in excess of the $10,000 procurement threshold, but adequate competitive bidding support was available. Cause: The Organization has not performed procedures in accordance with its procurement policies for certain purchases. Effect or Potential Effect: If procurement procedures are not followed, there is a risk that the Organization will not perform a proper evaluation of each element of cost to determine reasonableness. Questioned Costs: Undetermined Context: Our testwork consisted of statistical sampling as well as substantive testwork over various samples of expenditures, and were determined to be representative of the population for the fiscal year under audit. Identification as a Repeat Finding, if Applicable: See prior year finding 2021-005. Recommendation: We recommend that the Organization adhere to the current procurement guidelines, and also recommend that the Organization establish a form to document the procurement process, including bids received, conclusion, individuals involved and date.

Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430 ?Compensation ? personal services? requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, these records must comply with established accounting policies and practices of the non-Federal entity. Condition: During 2021, timesheets were not completed by employees. Time was allocated to the various classes based on a previously established budget. Per our discussions, staff reviewed the allocations each pay period to verify that they seemed appropriate prior to posting in the general ledger. The report listing employees that reviewed their allocations was then approved by the CEO and Managing Partner. We also noted that the initial time allocations used by the Organization on their calculation sheet do not directly correlate to the Federal program (for example the time allocation includes the category ?Flagship Initiative? and it is our understanding that this is not necessarily synonymous with the Federal program).Cause: Timesheets were not completed by employees during the year. Effect or Potential Effect: The Organization could inadvertently mischarge salaries and wages to its various programs. Questioned Costs: Undetermined Context: The Organization's current time-recording system did not capture the actual level of effort per program. This is deemed to be systemic in nature. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that the Organization revise their process so that employees are submitting timesheets to support their actual allocation of time each pay period. We recommend that the categories on the timesheets clearly indicate the time that will be charged to the Federal program.

Criteria or Specific Requirement: In accordance with CFR 200.302 the financial management system of each non-Federal entity must provide for effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. Condition: We noted instances where there was a delay between the receipt of checks from the Federal pass-through entity and the deposit to the bank, including one instance where a check for over $150,000 was received in April and not deposited until October. Cause: The checks were not deposited immediately on receipt. Effect or Potential Effect: The delay in deposit of receipts could result in loss of Federal funds. Questioned Costs: NoneContext: The Organization's cash receipt process did not ensure that the check described was deposited timely. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that Think of Us implement procedures to ensure that all cash receipts are deposited and recorded on a timely basis.

Criteria or Specific Requirement: In accordance with 2 CFR 200.302 (Financial Management) the auditee must be able to identify all Federal awards received and expended and the Federal programs under which they were received. Condition: We noted that the amount reported on the schedule initially provided included certain amounts which were prepaid for 2022, and that the schedule was not totally reconciled (there was a variance of approximately $23,000). Cause: The schedule provided at the commencement of the audit needed to be adjusted. Effect or Potential Effect: Without a properly prepared schedule, there is an increased potential for inaccurate reporting. Questioned Costs: None Context: The Organization's process for preparing the schedule did not identify certain changes necessary. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that the Organization ensure that the schedule is properly prepared in the coming year.

Criteria or Specific Requirement: Recipients of U.S. Government funds must adhere to the U.S. Government's requirements under Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, on screening all potential vendors, consultants, subrecipients, etc. against the System for Award Management (SAM). The screening of all potential vendors, consultants, subrecipients, etc. must be documented in writing. Condition: Although it is our understanding that the Organization does screen potential consultants and vendors prior to entering into contractual obligations, we were unable to obtain documentation to verify that the screening occurred prior to purchase. Cause: The Organization did not have a policy to consistently document its due diligence with respect to screening potential consultants and vendors against the SAM prior to entering into contractual obligations with those parties. Effect or Potential Effect: The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded parties by the United States Government. Questioned Costs: Undetermined Context: The Organization made payments throughout the year to parties without documenting the screening process in place. The issue is systemic. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend the Organization adopt policies and procedures to ensure compliance with U.S. Government regulations (with respect to engaging employees, consultants and vendors).

Criteria or Specific Requirement: CFR 200.320 specifies methods of procurement that must be used including competitive bidding where applicable, and limits the use of procurement by noncompetitive proposals to specific instances or situations including 1) the item is available only from a single source, 2) The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation, 3) the Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity, or 4) after solicitation of a number of sources, competition is determined inadequate.Condition: We noted instances where contractors were engaged in excess of the $10,000 procurement threshold, but no competitive bidding support was available, or only one additional bid was documented (three required per policy). In addition, in the instances where the Organization did obtain multiple bids, but we did not note any process to formally document the analysis and conclusion. Cause: The Organization has not performed procedures in accordance with its procurement policies for certain purchases. Effect or Potential Effect: If procurement procedures are not followed, there is a risk that the Organization will not perform a proper evaluation of each element of cost to determine reasonableness. Questioned Costs: Undetermined Context: Our testwork consisted of statistical sampling as well as substantive testwork over various samples of expenditures, and were determined to be representative of the population for the fiscal year under audit. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that the Organization adhere to the current procurement guidelines, and also recommend that the Organization establish a form to document the procurement process, including bids received, conclusion, individuals involved and date.

Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR 200, the accounting practices of the non-Federal entity must be consistent with the cost principles and support the accumulation of costs as required by the principles, and must provide for adequate documentation to support costs charged to the Federal award. Condition: We noted that the Federal pass-through agreement included certain annual fees charged by the Organization for playbook access and digital collaborative access. The specific dollar amount for these fees was not outlined individually within the budget and information detailing how the value charged was determined not available. Cause: The specific amount of the fee to be charged by the Organization was not identified in the award budget, and we were unable to obtain a detailed calculation.Effect or Potential Effect: Without clear identification and support, there is the potential for charges to be disallowed. Questioned Costs: None Context: The fees were included in invoices to the pass-through entity which were approved and paid. Identification as a repeat finding, if applicable: Not applicable Recommendation: We recommend that the Organization document the determination for any charges not based on reimbursement, and clearly delineate these amounts in the budget.