Safer New Mexico Now, IncNon-Profit

Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal entity 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. Condition: During our testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.

Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal entity 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. Condition: The Organization had deficiencies in internal control related to federal awards. These are outlined in finding 2022-001. These include inappropriate billing of expenditures to federal awards due to misstatement of accounting records. Questioned Costs: $55,935 Context: The breakdown in internal controls over financial reporting caused noncompliance with federal requirements and created overbillings. Effect: The Organization duplicated amounts in claims to the grantor. Cause: Long-time institutional knowledge was lost when the CFO left the organization. Safer then turned to an external contractor for accounting assistance that did not have the same level of familiarity with the organization’s programs, policies and procedures. Recommendation: CLA recommends management continue to assess the current procedures for claims on federal grants to incorporate a life to date assessment of billings to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer noted that there was turnover in the accounting function of the organization and that the external contractor that was hired to act in the role of the CFO (until a regular employee in the CFO/controller role could be hired) was not as familiar with Safer’s established processes and procedures. Prior to the loss of the long-time CFO, Safer’s policies and procedures were very effective and no audit adjustments had been necessary in past audits under the full tenure of the current CEO. Action Planned/Taken in Response to Finding: • Hired an outside consultant to test certain 2023 transactions and procedures for accuracy and completeness with an emphasis on the matters identified in this Finding. • The CEO has performed a thorough review of all policies and procedures to make sure they are still relevant for the current operating environment and has made modifications that will be sent to the Board for approval at an upcoming Board meeting. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO • Fredrick Gordon, CFO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2023. Plan to Monitor Completion of Corrective Action Plan: The CEO will be the assigned individual within the organization to monitor the above actions and make sure appropriate action is taken.