THE BAILEY FOUNDATION

2020-001 "Summer Food Service Program - CFDA No. 10.559; Grant No. ERS4693451S Grant Period July 1, 2019 - June 30, 2020; Grant No. ERS4693451S Grant Period July 1, 2020 - June 30, 2021" Condition: Material Weakness - The Organization does not have sufficent internal controls to ensure compliance with the program. Criteria: The Summer Food Service program and Uniform Guidance 7 CFR requires recipients to maintain a standard of internal controls such a procurement policies, proper documentation, and that proper administrative athority and oversight are exercised over the program sites. Controls lack segregation of duties between administration staff. Cause: The Bailey Foundation was unable to provide proper documentation for various samples due to lack of proper documentation over program expenses. The Bailey Foundation was also unable to provide us with various internal control policies or provide sufficient support to satisfy the requirements of sufficient internal controls. Effect: Program compliance requirements are at risk of not being met. Recommendation: The Bailey Foundation should develop policies to ensure proper segregation of duties, oversight of program functions, and document retention to ensure that the Summer Food Service Program requirements are being met.

The Bailey Foundation has engaged an outsourced accounting department to assist in mitigating the risk of insufficient segregation of duties. Additionally, the Organization has implemented various policies related to the oversight of the program management and procurement.

2020-002 "Summer Food Service Program - CFDA No. 10.559; Grant No. ERS4693451S Grant Period July 1, 2019 - June 30, 2020; Grant No. ERS4693451S Grant Period July 1, 2020 - June 30, 2021" Condition: Material Weakness - The Bailey Foundation was unable to provide sufficent documentation on various program expenses to determine if the expenses are for allowable activities. Criteria: The Summer Food Service program and the Uniform Guidance require that sufficient documentation be maintained to ensure that costs are allowable under the program. Cause: The Bailey Foundation lacks internal controls that require the retention of proper and sufficient documentation. Effect: Program costs are not verifiable to ensure that they are directly related to the program. Recommendation: The Bailey Foundation should implement a policy to ensure that sufficient documentation is maintained for all program related activities.

The Organization, subsequent to year end, implemented the use of bill.com to retain proper documentation and track the approval of expenditures related to the Organization and the various programs.

2020-003 "Summer Food Service Program - CFDA No. 10.559; Grant No. ERS4693451S Grant Period July 1, 2019 - June 30, 2020; Grant No. ERS4693451S Grant Period July 1, 2020 - June 30, 2021" Condition: Significant Deficiency - During our audit, we noted that activites related to the Summer Food Service Program were intermingled with other like programs. Criteria: The Summer Food Service program and the Uniform Guidance require that program activities be seperately accounted for. Cause: The Bailey Foundation records all program related funds together and does not seperately record the School Food Service funds from other similar program activities. Effect: SEFA could be over/understated due to the lack of proper accounting of funds per the program contract. Recommendation: The Bailey Foundation set up separate accounts for program related activites or hold these funds and activites in a separate bank account.

The Organization intends to modify the accounting ledger to include separate general ledger accounts or utilize the class function to separately track the activities of the various programs.