FAMILY VOICES

2025-004 – Allowable Costs (Significant Deficiency) Federal Program Information: Funding Agency: U.S. Department of Health and Human Services Title: Maternal and Child Health Federal Consolidated Programs Federal Assistance Listing: 93.110 Award Numbers: Various Award Year: Various Criteria: Under the Uniform Guidance requirements, to be allowable under Federal awards, costs must meet the following criteria: 1) Necessary and reasonable, 2) Consistent with policies and procedures, 3) Accorded consistent treatment and 4) Adequately documented. Under the grant requirements, time and attendance records must be maintained for salaries charged to the award and must specify the project and be of sufficient detail to substantiate the claimed percentage of work performed in support of the project. Condition: Family Voices was unable to provide original supporting documentation for allocated costs in the amount of $6,376. Questioned Costs: $6,376 Context: Six of thirty-four cash disbursement transactions reviewed did not have proper documentation. Cause and Effect: The Organization did not have adequate procedures to review grant expenditures or maintain supporting documentation. Auditor’s Recommendation: Establish procedures to ensure transactions charged to federal programs are allowable and ensure that all transactions have supporting documentation. Management Response: Management has strengthened procedures to ensure that costs charged to federal programs are allowable, properly documented, and supported in accordance with Uniform Guidance. Management acknowledges the findings identified during the audit and is committed to strengthening internal controls over financial reporting and federal program compliance. The corrective actions are designed to improve the consistency, documentation, review, and accountability of accounting and compliance processes and to support GAAP compliant and Uniform Guidance compliant reporting on a go forward basis. In addition, management is assessing and augmenting finance and grants management capacity (including the use of outsourced support) to ensure corrective actions are implemented effectively and sustained over time. These actions reflect management’s current operating structure and will be monitored by executive leadership and those charged with governance.

2025-005 – Late Report (Significant Deficiency) Federal Program Information: Funding Agency: U.S. Department of Health and Human Services Title: Maternal and Child Health Federal Consolidated Programs Federal Assistance Listing: 93.110 Award Number: 5 U40MC00149‐24‐00 Award Year: Various Criteria: A Federal Financial Report SF-425 and a Continuation Progress Report are required to be submitted on an annual basis. Annual reports are due ninety days after year-end. Condition: During our review of the financial reports, we found the following: One of one annual financial report tested was submitted late. One of one progress report tested was submitted late. Questioned Costs: None. Context: Two of two annual reports tested. Cause and Effect: Internal controls are not in place to ensure financial and narrative reports are submitted on a timely basis. As a result, the program is not in compliance with reporting requirements. Auditor’s Recommendations: Family Voice’s personnel should ensure financial and narrative reports are submitted on a timely basis in accordance with the grant agreement. Management Response: Management has implemented controls to ensure timely submission of required financial and programmatic reports. Management acknowledges the findings identified during the audit and is committed to strengthening internal controls over financial reporting and federal program compliance. The corrective actions are designed to improve the consistency, documentation, review, and accountability of accounting and compliance processes and to support GAAP compliant and Uniform Guidance compliant reporting on a go forward basis. In addition, management is assessing and augmenting finance and grants management capacity (including the use of outsourced support) to ensure corrective actions are implemented effectively and sustained over time. These actions reflect management’s current operating structure and will be monitored by executive leadership and those charged with governance.

2025-006 – Inconsistent Application of Negotiated Indirect Cost Rate (Significant Deficiency) Federal Program Information: Funding Agency: U.S. Department of Health and Human Services Title: Maternal and Child Health Federal Consolidated Programs Federal Assistance Listing: 93.110 Award Number: Various Award Year: Various Criteria: Per 2 CFR §200.414, organizations must apply their negotiated indirect cost rate consistently across all federal programs and cost objectives. Family Voice's approved ICRA requires the application of a 21% IDC rate to the applicable direct cost base for all covered awards. Condition: During our review of Family Voice's grant expenditures for the fiscal year ended June 30, 2025, we noted that the negotiated indirect cost (“IDC”) rate of 21%, as established in Family Voice’s approved indirect cost rate agreement (“ICRA”) with its cognizant federal agency, was not consistently applied across all federal awards. Specifically, we identified invoices and reimbursement requests submitted to federal and/or pass-through grantors in which indirect costs were either under-charged or over-charged. Questioned Costs: $2,335. Cause and Effect: The inconsistency appears to result from a lack of centralized controls and documented procedures governing the application of the IDC rate at the time of billing. Failure to consistently apply the approved 21% IDC rate results in under-recovery of allowable indirect costs, potentially understating the true cost of administering federal programs. Management has implemented procedures to ensure consistent application of the approved negotiated indirect cost rate across all applicable federal awards. Management acknowledges the findings identified during the audit and is committed to strengthening internal controls over financial reporting and federal program compliance. The corrective actions are designed to improve the consistency, documentation, review, and accountability of accounting and compliance processes and to support GAAP compliant and Uniform Guidance compliant reporting on a go forward basis. In addition, management is assessing and augmenting finance and grants management capacity (including the use of outsourced support) to ensure corrective actions are implemented effectively and sustained over time. These actions reflect management’s current operating structure and will be monitored by executive leadership and those charged with governance. Auditors’ Recommendations: We recommend Family Voices Conduct a retroactive review of billings submitted during the audit period to quantify any under-recovery and assess whether amended claims or corrective billings are appropriate.

Criteria: Under the Uniform Guidance requirements, to be allowable under Federal awards, costs must meet the following criteria: 1) Necessary and reasonable, 2) Consistent with policies and procedures, 3) Accorded consistent treatment and 4) Adequately documented. Under the grant requirements, time and attendance records must be maintained for salaries charged to the award and must specify the project and be of sufficient detail to substantiate the claimed percentage of work performed in support of the project. Condition: During our testing of payroll expenditures, we noted Family Voices has appropriate procedures in place to record an accurate estimate of allocated time charged to the major program and to compare actual hours incurred working on the program to the initial estimate recorded. However, management did not retain proper documentation to substantiate the initial estimate recorded in comparison to the actual hours incurred, including management’s determination that the estimate is reasonable. Questioned Costs: None Context: Fourteen of fourteen payroll transactions reviewed did not have proper documentation. Cause and Effect: Payroll expenditures are allocated to the program based on estimates derived from program employees in advance. The accounting department and the program directors meet to review the estimated time recorded at month end and adjust expenditures charged to the program based on actual work performed on the project. Supporting documentation was available, however, it did not support the estimate to actual comparison.Auditors’ Recommendation: Establish payroll procedures to ensure transactions are allocated based on actual hours worked on the program and all expenditures charged to the program have adequate supporting documentation. Management Response: The Organization in the years prior to Fiscal Year End 2023 were employing a time and attendance system that was in accordance with allowable cost grant requirements, however, the process was unduly burdensome on the organizations employees and the former finance director elected to change the process from attestation of hours worked to the noted allocation of available funding. In realizing that this method was not supporting the compliance of allowable cost grant requirements, efforts were begun to revisit the salary allocation methods.