YOUNG MEN'S CHRISTIAN ASSOCIATION OF PIERCE AND KITSAP COUNTIES

The Uniform Guidance requires a non-federal entity that has expended federal awards to have written policies pertaining to its federal grants for payments, procurement, allowable costs charged to federal programs, and compensation. Although the YMCA has processes and written policies, there is no formal written policies and procedures that specifically covers the criteria requirements under the Uniform Guidance. This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance due to the new COVID-19 funding received in late 2020 through 2021. As a result of this condition, the YMCA did not have a process to track federal grants. This reduces the effectiveness of the YMCA's internal controls and increases the likelihood of improper use of funds. No costs have been questioned as a result of this finding. We are aware that the YMCA is evaluating options using internal and external resources to take corrective action. We recommend that the YMCA proceed with creating written policies as soon as practical.

We will implement the formal written policies and procedures to cover the criteria requirements under the Uniform Guidance. A new grant taskforce will ensure strong internal controls in grant administration with clear roles and responsibilities for improved accountability.

2020-002

The Uniform Guidance requires for recipients of the federal awards to maintain an accurate and complete Schedule of Expenditures of Federal Awards (SEFA). Furthermore, recipients should maintain appropriate and sufficient support for the expenditures such as contract agreements, invoices, and vouchers to ensure that the expenditures meet all compliance for each program, such as expenditures allowed and allowable. It was noted that the YMCA's SEFA was not complete and accurate, resulting in multiple changes to the SEFA and delays in obtaining sufficient audit evidence to support the contracts and the amounts on the SEFA. The SEFA schedule was corrected through audit procedures performed, although there were material changes to the initial SEFA including contracts that were not located. The YMCA does not have controls in place to maintain adequate records to support all federal contracts and to allow for the timely completion of an accurate SEFA. Although upon completion of the audit, sufficient audit evidence was obtained, the YMCA did not have a system in place to maintain adequate records for all federal contracts, resulting in material changes to SEFA. Inaccurate financial reporting may affect decisions made by organizations utilizing the SEFA. The YMCA had federal expenditures that should have not been included in the SEFA, federal expenditures missing from the SEFA, and federal expenditures with incorrect amounts. In addition, contracts and supporting billings were not readily available. An inaccurate and incomplete SEFA could lead to the incorrect major program being tested and missing contracts could lead to specific compliance requirements being missed, which puts the Association at risk with potential noncompliance. No costs have been questioned as a result of this finding. We recommend for the YMCA create a centralized process to keep records of contract agreements and expenditures and update the SEFA at least semi-annually.

We will maintain an accurate and complete SEFA by tracking each grant from pre application activities to the closeout in order to maintain accurate records for all federal contracts and all allowable expenditures in compliance with the Uniform Guidance.

2020-003

As part of the YMCA?s internal controls over payroll and reimbursement request, proper review and approval must be evident with sign offs by someone other than the preparer. It was noted during testing, that evidence of review over several payroll processes were missing, including missing Personal Information Forms, missing evidence of review over payrates, and evidence of review over payroll bank statements and reconciliations. In addition, none of the cost reimbursements requests submitted were reviewed by someone other than the staff who prepared the requests. The YMCA does not have sufficient controls in place as required under their policies and procedures manual. During the audit of the major program, reliance on controls could not be obtained and control risk over compliance was determined to be high. These lack of controls could lead to an increased risk of fraud, errors, questioned costs, or noncompliance. No costs have been questioned as a result of this finding. We recommend for the YMCA improve controls by reviewing their policies and procedures and ensure controls are evidenced by proper approval.

We will implement stronger internal controls over payroll and reimbursement request with formal review and approval procedures.

The Uniform Guidance requires a non-federal entity that has expended federal awards to have written policies pertaining to its federal grants for payments, procurement, allowable costs charged to federal programs, and compensation. Although the YMCA has processes and written policies, there is no formal written policies and procedures that specifically covers the criteria requirements under the Uniform Guidance. This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance due to the new COVID-19 funding received in late 2020.

We will implement the written policies pertaining to federal grants for payments, procurement, allowable costs charged to federal programs, and compensation. Each grant will have the compliance requirements documented and stored in the file share for ready access by the stakeholders.

The Uniform Guidance requires for recipients of the federal awards to maintain an accurate and complete Schedule of Expenditures of Federal Awards (SEFA). Furthermore, recipients should maintain appropriate and sufficient support for the expenditures such as contract agreements, invoices, and vouchers to ensure that the expenditures meet all compliance for each program, such as expenditures allowed and allowable. It was noted that the YMCA's SEFA was initially not complete and accurate, resulting in multiple changes to the SEFA and delays in obtaining sufficient audit evidence to support the contracts and the amounts on the SEFA. The SEFA schedule was corrected through audit procedures performed. The YMCA does not have controls in place to maintain adequate records to support all federal contracts and to allow for the timely completion of an accurate SEFA. Although upon completion of the audit, sufficient audit evidence was obtained, the YMCA did not have a system in place to maintain adequate records for all federal contracts, resulting in an inaccurate SEFA initially.

We will implement the written process whereby each awarded grant will be communicated immediately to Finance. We will invoice all federal grants with supporting documentation in strict compliance with the billing requirements of each grant and store the grant revenue information in the file share with a consistent naming convention for improved audit ability.