EnterpriseKCNon-Profit

Finding No. 2024-001 - Significant Deficiency, Compliance and Control Federal Assistance Listing Number – 21.027 U.S. Department Of Treasury State And Local Fiscal Recovery Funds – Suspension And Debarment Criteria: According to Part 3 of the 2024 Compliance Supplement “When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: In our nonstatistical sample of 5 procurement transactions for the year ended December 31, 2024, we identified 1 procurement transaction where no suspension and debarment certification was documented prior to the execution of the contract or clause was added to the contract and for which the suspension and debarment check on SAM.gov was not included in the contract file. Context: EnterpriseKC completed the suspension and debarment checks on SAM.gov but could not provide evidence that those checks were completed in 2024 or before the date in which the contract was executed. Instead, the suspension and debarment checks were added to the contract files after our audit procedures were conducted. Effect: A failure to conduct a suspension and debarment check could result in procuring goods or services from an unallowed vendor which could result in unallowable costs. EnterpriseKC was able to show that all vendors used in 2024 were not included on the Exclusions list and were not suspended and debarred. Questioned Costs: There were no questioned costs identified. Cause: The Corrective Action Plan for prior year finding 2023-002 was only partially implemented as not all contracts were checked for suspension and debarment. Identification As A Repeat Finding: This is a repeat finding of 2023-002. Recommendation: Although EnterpriseKC partially corrected the prior year finding related to suspension and debarment verification for all new contracts, EnterpriseKC did not complete the verification for older contracts executed in prior years. We recommend that management include a suspension and debarment clause in all contracts which may get allocated to federal funding prior to allocating federal funds to the contract or perform alternative procedures to ensure the vendor is not suspended or debarred. Views Of Responsible Officials (Unaudited): EnterpriseKC has conducted the suspension and debarment checks and has included those checks in the contract files for all covered transactions and has also updated its procedures to ensure those checks are conducted and added to the contract file at or before the contract effective date.

Finding 2023-001 - Significant Deficiency, Compliance Federal Assistance Listing Number. 21.027 U.S. Department Of Treasury State and Local Fiscal Recovery Funds – Allowable Costs Criteria: According to 2 CFR 200.430(i)(1)(vii) “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:….(vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity….”. Additionally, according to 2 CFR 200.413(a) “Cost incurred for the same purpose in like circumstances must be treated consistently as either direct or indirect (F&A) costs.” Condition: In our nonstatistical sample of 13 allowable cost selections we identified 2 payments that covered payroll costs that were not supported by sufficient documentation of time and effort for one employee. For select administrative employees for which time was allocated to the grant, the use of a fringe benefits rate included the allocation of rent built into the rate when rent was already billed as a direct cost. Context: Monthly payroll was billed to EnterpriseKC and to the grant by a related organization based on the time and effort tracked by the related organization for that month; however, it was noted that one employee’s full salary was billed to the grant and the time and effort spent on grant-related activities was less than full-time, with remaining time being spent on non-Federal award activities. Based on the employee’s time spent on the grant related activities the employee’s payroll costs billed to the grant for the 2 months evaluated was overbilled to the grant by $10,416. The related organization also billed EnterpriseKC and the grant for administrative employees’ time using an hourly billing rate that was determined by using the employees’ salaries divided by the standard hours worked plus an estimate of fringe benefits that ranged from 25% to 32%. The fringe benefits rate included allocation of rent expense which was already separately billed by the related organization as a direct cost. The actual fringe benefit rate excluding the rent was approximately 24% which resulted in estimated overbillings to the grant for the 2 months reviewed totaling $149. Effect: As a result of the overbillings noted, the grant expenditures were overstated by $10,565 for the questioned costs identified. Questioned Costs: Known questioned costs totaled $10,565. Additional likely questioned costs totaled $39,937 and were determined by allocating the percentage of known questioned costs as a percentage of the total costs included in the sample tested from the related organization multiplied by the total costs incurred with the related organization. It was not considered appropriate to project questioned costs to the remaining population of costs as the questioned costs were isolated to payroll related costs. Cause: EnterpriseKC did not have internal controls in place with sufficient precision to detect errors related to overbilling payroll costs to the grant. Further, EnterpriseKC did not have controls in place to ensure that direct costs billed to the grant were not duplicated by also being included in the payroll fringe rate. Identification Of Repeat Finding: This is not a repeat finding. Recommendation: We recommend that EnterpriseKC should ensure that any payroll costs for each individual employee allocated to the grant are supported by appropriate time and effort. We recommend that EnterpriseKC ensure that its billing rate for administrative employees only includes allocable fringe benefits and does not including any costs already separately billed as a direct cost. Views Of Responsible Officials (Unaudited): Management will implement a comprehensive time tracking review process that also extends to reviewing time for employees that choose to work remotely and will ensure that time not allocated to the grant is not included in the costs allocated to the grant. Management will revise the fringe benefit rate that gets charged to the hourly rates to ensure that none of the costs included in the fringe benefits are also direct expenses billed to the grant. The unallowable costs will be redirected to other allowable grant costs in 2024. Anticipated Completion Date: September 2024 Contact Person: Jay Konomos, Pillar Leader

Finding 2023-002 - Significant Deficiency, Compliance Federal Assistance Listing Number. 21.027 U.S. Department Of Treasury State And Local Fiscal Recovery Funds – Suspension And Debarment Criteria: According to Part 3 of the 2024 Compliance Supplement “When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: In our nonstatistical sample of 5 procurement transactions for the year ended December 31, 2023, we identified 4 procurement transactions where no suspension and debarment certification was documented prior to the execution of the contract or clause was added to the contract and for which the suspension and debarment check on SAM.gov was not included in the contract file. Context: EnterpriseKC completed the suspension and debarment checks on SAM.gov but could not provide evidence that those checks were completed in 2023 at or before the date in which the contract was executed. Instead, the suspension and debarment checks were added to the contract files after our audit procedures were conducted. Effect: A failure to result in conducting a suspension and debarment check could result in procuring goods or services from an unallowed vendor which could result in unallowable costs. EnterpriseKC was able to show that all vendors used in 2023 were not included on the Exclusions list and were not suspended and debarred. Questioned Costs: There were no questioned costs identified. Cause: EnterpriseKC was not aware of the requirements to maintain documentation of the suspension and debarment checks in the contract files. Identification Of Repeat Finding: This is not a repeat finding. Recommendation: We recommend that EnterpriseKC conduct the suspension and debarment checks and retain documentation of those checks in the contract files and establish controls to ensure that review of the contract files include ensuring the checks are complete. Views Of Responsible Officials (Unaudited): EnterpriseKC has conducted the suspension and debarment checks and has included those checks in the contract files for all covered transactions and has also updated its procedures to ensure those checks are conducted and added to the contract file at or before the contract effective date. Completion Date: August 2024 Contact Person: Jay Konomos, Pillar Leader