HAWAII RISE FOUNDATIONNon-Profit

Finding 2020-001 - Coronavirus Relief Funds, CFDA 21.019, Internal Controls: Lack of Accounting OversightCriteria: Government Auditing Standards require adequate internal controls over accounting functions to maintain proper accounting. These internal controls should reduce to a relatively low level the risk that inaccurate contract financial reporting for federal grants, that are material in relation to a federal program being audited, may occur and not be detected in a timely manner by employees in the normal course of performing their assigned functions. Thus, good accounting oversight should reduce to a relatively low level the risk of material financial misstatement.Condition:? It was noted that the Organization?s Board of Director?s meetings do not include review of financial activity and the Board is not provided financial reporting regularly. As the Organization is small, this leaves the Executive Director as the sole authorizer with little oversight.? It was noted that annotated approval of the following was missing:o The Executive Director was paid additional amounts as an independent contractor without a Form 1099-MISC being issued to her.o The Executive Director?s compensation rate fluctuates depending on available funding.o A number of reimbursements and ACH payments above the Organizations? policy of $2,500 threshold were without second check signer.o Payments made to the executive directors of Hawaii Rise Foundation and Vibrant Hawaii.? There was a number of sizable reimbursements to the Executive Director of Hawaii Rise Foundation and the Executive Director of Vibrant Hawaii for program expenses they paid by using their personal credit cards instead of using an entity business card.? Because no General Ledger coding on invoices was done per the Organization?s policy, it was more difficult to support proper grant accounting. It was also noted that the general ledger descriptions did not always appear consistent with the invoices being paid.? It was noted that the Organization did not follow the payroll procedures from its accounting manual: there were no approved timesheets, no consistent approved pay rate forms and no annotated review of payroll report.Cause of Condition: Lack of or ineffective oversight by qualified individual(s) charged with governance, management override of controls and deficiencies in the design and/or operation of internal controls. Established procedures are not routinely monitored and not always followed.Potential Effect: Deficiencies in internal controls will provide opportunities for mistakes or fraud to occur and material misstatement of the financial statements.Questioned Costs: NoneContext: Prior to the Coronavirus pandemic, the Executive Director oversaw a few programs. The Organization revenue and expenses grew $2 million during the fiscal year.Recommendation: It is important to have good accounting oversight to ensure accuracy of financial statements and that policies and procedures are followed. This would include monthly and year-end review of account balances by a qualified accountant as part of the closing process.

Finding 2020-002 - Coronavirus Relief Funds, CFDA 21.019, Internal Controls: Incomplete and Incorrect SEFACriteria: 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 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:? It was noted the schedule of expenditures of federal awards did not include Americorps and Holomua Grant funds.? It was noted the CFDA number provided for the Coronavirus Relief Fund differed from the federal guidance.? It was noted the Housing and Urban Development expenditures listed on the schedule of expenditures of federal awards differed from the General Ledger.Cause of Condition: Lack of management experience with reporting under Uniform Guidance.Potential Effect: As a result of the condition above, it is feasible that Management was not aware of some of the compliance requirements pertaining to federal funds.Questioned Costs: NoneContext: Due to the Coronavirus pandemic, the Organization was provided an opportunity to partner with another non-profit to provide community assistance at a much higher activity level than previously experienced. The funds were Federal which initiated the Organization?s first Single Audit.Recommendation: We recommend Management establish procedures and controls to properly identify the funding source of all grant awards and the applicable CFDA numbers. Management should track the federal funds it receives and review the applicable compliance requirements to ensure proper grant spending, monitoring and reporting.