The Life Link

Federal program information: Funding agency: U.S. Department of Justice Title: Services for Trafficking Victims CFDA number: 16.320 Award year and number: 2020; 2018-VT-BX-K022 Criteria: According to the U.S. Department of Justice (DOJ) Grants Financial Guide, organizations should request funds based on immediate reimbursement requirements. Funds will not be paid in a lump sum, but rather disbursed over time as project costs are incurred. Draw down requests should be timed to ensure that Federal cash on hand is the minimum needed for reimbursements to be made immediately or within 10 days. If not spent or disbursed within 10 days, funds must be returned to the awarding agency. Condition: The Life Link requested reimbursement of funds in excess of the amount of expenses incurred during 2020. Questioned Costs: None Context: Requests for reimbursements exceeded expenses by $21,950 during fiscal year 2020. Cause: The Life Link mistakenly requested reimbursement in excess of the amount of expenses incurred during 2020. Effect: The Life Link is not in compliance with Federal cash management requirements and the requirements of the U.S. DOJ Grants Financial Guide. Auditor?s Recommendation: The Life Link should monitor expenses of their U.S. DOJ grants and only request reimbursement for actual expenses incurred for each grant. Management?s Response: We agree with this finding. In fiscal year 2020, the Life Link?s requests for reimbursements exceeded expenses. This mistake was discovered in July 2020. The reimbursements in July were reduced by the amount of expenses reimbursements in fiscal year 2020. To avoid making this error again, every month before the reimbursement is requested expenses for the grants are reviewed by the CFO in detail. If there are any inconsistencies they are resolved before the reimbursement it requested.

Federal program information: Funding agency: U.S. Department of Justice Title: Services for Trafficking Victims CFDA number: 16.320 Award year and number: 2020; 2018-VT-BX-K022 2020; 2018-VT-BX-K022 Criteria: According to 2 CFR 200.430(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that the system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. All necessary adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: Salaries and wages allocated to these federal awards did not agree with time and effort documentation maintained by The Life Link. Questioned Costs: Undeterminable Context: Seventeen of twenty-five salary and wage transactions allocated to the grant. Cause: Time and effort documentation was entered into the payroll system incorrectly by employees. Additionally, some salaries and wages were incorrectly allocated to matching expenses of the federal awards when they should have instead been allocated directly to the federal awards. Effect: The Life Link is not in compliance with Federal cost principles regarding the charges to federal awards for salaries and wages. Auditor?s Recommendation: Enforce payroll processing policies and procedures to ensure that salaries and wages charged to federal awards are adequately supported. Supervisors should approve time sheets in the system verifying actual time worked on each grant. Management?s Response: We agree with this finding. We have had additional trainings with the employees on how to correctly enter their grant allocations into the timesheets. We have worked with supervisors to help them better enforce correct grant time allocations. After supervisors have approved timesheets, they are reviewed by Human Resources. If grant allocations do not look correct, Human Resources will reach out to the employee and supervisor to confirm the allocations.

Federal program information: Funding agency: U.S. Housing and Urban Development (HUD) Title: Continuum of Care (CoC) Program CFDA number: 14.267 Award year and number: 2020; NM0026L6B011811 Criteria: According to 24 CFR section 578.49, where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed The Life Link?s rent reasonableness policy. Grant funds in an amount up to one month?s rent may be used to pay the landlord for vacancies. Condition: The unit size and rent amount used to determine rent reasonableness was applied to the whole unit size, rather than the pro-rata share for the housing size available for occupancy. When reviewing the general ledger against source documentation for ten participants, 53 instances of discrepancies were noted. Questioned Costs: $12,528 Context: Six participants rented one room in a two-bedroom unit; however, the rent reasonableness form was completed using a two-bedroom unit. Additionally, four participations rented one room in a three-bedroom unit; however, the rent reasonableness form was completed using a three-bedroom unit. Cause: The Life Link is paying a set amount of rent per multi-bedroom unit, regardless of the unit size available for occupancy; therefore, The Life Link used the total amount of units to determine if the rent was reasonable. Effect: Units may not be eligible for CoC assistance if the rents charged are not reasonable for the area. Additionally, unallowable and unallocable expenses were charged to the grant which resulted in repayment of funds. Auditor?s Recommendation: The Life Link should submit new rent reasonableness certifications for all current CoC participants in multi-bedroom units. Additionally, The Life Link should update its fair market rent calculation for shared housing to be the pro-rata share in agreement with The Life Link?s rent reasonableness policy. Management?s Response: We agree with this finding. To address the deficiency identified, The Life Link has submitted new rent reasonableness certifications for all current CoC participants in multi-bedroom units in agreement with The Life Link?s rent reasonable policy.

Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period. Condition: The Life Link?s fiscal year 2019 single audit reporting package was not submitted within nine months after the end of the audit period. Cause: The Life Link spent significant time researching and determining whether presenting its financial statements separately or consolidated with its affiliates was appropriate. This also affected the reconciliation process for certain accounts and delayed the start of the audit. Effect: The Life Link was unable to completely reconcile certain general ledger accounts until the reporting entity considerations were resolved. As a result, the audit started late and was not issued within the nine-month reporting deadline. Auditor?s Recommendation: The Life Link should make the determination of its reporting entity before the end of the year so that it does not affect the reconciliation of account balances and the start of the audit process. Management?s Response: We agree with this finding. The fiscal year 2019 audit is late due to the need for The Life Link to have a consolidated audit when it was initially determined that we needed separate audits for each organization.