EIN: 910567261
UEI: NPLJNKK7KNL9
Audited by: Clark Nuber PS
Oversight agency: 14 [Department of Housing and Urban Development]
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Showing data from September 2, 2026 — the Federal Audit Clearinghouse is under high demand right now, so this couldn't be refreshed. This is the most recent data on record, not necessarily today's.
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on September 30, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by March 30, 2026 (157 days ago).
What is a management decision? →Finding 2024-002 Significant deficiency in internal controls over compliance and instances of noncompliance related to special tests and provisions. Federal Agency: Department of Housing and Urban Development Program Title: Continuum of Care Program Assistance Listing Number: 14.267 Awards Numbers: WA0295L0T002208 and WA0295L0T002309 Award Periods: June 1, 2023 through May 31, 2025 Criteria The Department of Housing and Urban Development requires that where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space (24 CFR 578.49(b)(1) and 24 CFR 578.51(g)). 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 HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants (24 CFR sections 578.49(b)(2) and 578.51(g) and (j)). Condition/Context Wellspring’s controls require that a rent reasonableness assessment is performed prior to participants receiving rental assistance for renting a new unit. In a sample of 21 transactions there were two transactions identified in which the rent reasonableness form was not fully completed, or other documentation of rent reasonableness check was not retained. Cause Wellspring’s internal controls related to special tests were not sufficient to prevent or detect errors in compliance with the standards and to ensure consistent treatment with policies and procedures. Effect/Potential Effect Wellspring was unable to substantiate awarded rental assistance to two participants were compared to similar units and assessed for reasonableness based on documentation retained. Questioned Costs Not applicable. Repeat Finding No Recommendation We recommend that management add a control procedure to review filed rent reasonableness assessment forms for completeness before rental assistance is approved. Views of Responsible Officials Management agrees with the finding and has provided the corrective action plan following the Single Audit Report.
Show full finding ▾Hide full finding ▴Finding 2024-002 Significant deficiency in internal controls over compliance and instances of noncompliance related to special tests and provisions. Federal Agency: Department of Housing and Urban Development Program Title: Continuum of Care Program Assistance Listing Number: 14.267 Awards Numbers: WA0295L0T002208 and WA0295L0T002309 Award Periods: June 1, 2023 through May 31, 2025 Criteria The Department of Housing and Urban Development requires that where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space (24 CFR 578.49(b)(1) and 24 CFR 578.51(g)). 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 HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants (24 CFR sections 578.49(b)(2) and 578.51(g) and (j)). Condition/Context Wellspring’s controls require that a rent reasonableness assessment is performed prior to participants receiving rental assistance for renting a new unit. In a sample of 21 transactions there were two transactions identified in which the rent reasonableness form was not fully completed, or other documentation of rent reasonableness check was not retained. Cause Wellspring’s internal controls related to special tests were not sufficient to prevent or detect errors in compliance with the standards and to ensure consistent treatment with policies and procedures. Effect/Potential Effect Wellspring was unable to substantiate awarded rental assistance to two participants were compared to similar units and assessed for reasonableness based on documentation retained. Questioned Costs Not applicable. Repeat Finding No Recommendation We recommend that management add a control procedure to review filed rent reasonableness assessment forms for completeness before rental assistance is approved. Views of Responsible Officials Management agrees with the finding and has provided the corrective action plan following the Single Audit Report.
Contact Person(s): Calli Clevinger and Cobie Sparks-Howard Corrective Actions in Progress: 1. Policy Reinforcement: Staff will be re-trained on Wellspring’s rent reasonableness policy, with emphasis on the requirement to include comparable unit data on every form. 2. Integration with Move-In Assessment: The rent reasonableness form will now be a required document attached to the move-in assessment. A unit will not be approved for move-in until the rent reasonableness form is fully completed and attached. 3. Secondary Review: Supervisors will conduct a review of all move-in assessments, including the attached rent reasonableness form, prior to final approval. Anticipated Completion Date: Staff re-training: Completed by September 30, 2025 Integration of rent reasonableness into move-in assessment in Salesforce: October 2025 Secondary review and monitoring: Ongoing, beginning immediately Expected Outcome: These actions will ensure that all future rent reasonableness forms are completed, attached to the move-in assessment, and reviewed prior to approval of move-in. This will bring Wellspring into full compliance with both internal policy and audit requirements.
FAC accepted this audit on October 1, 2023 — management decision was due April 1, 2024.
Finding 2022-001 Auditor scope limitation over applicability and determination of eligibility requirements Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-108463-1 Award Period: July 1, 2021 through June 30, 2022 Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-107790 Award Period: June 1, 2020 through August 31, 2022 Criteria The auditor is required to test compliance requirements that are determined to be direct and material to the Federal major program. Condition/Context for Evaluation We were unable to determine if eligibility was direct and material to the federal major program being tested for the following reasons: ? The grantor and Wellspring are not in agreement as to the responsibilities over the determination of eligibility. ? The contracts lack clarity and are contradictory as to whether Wellspring or other parties are responsible for the determination of eligibility. ? Wellspring asserts and has received an outside legal opinion that Wellspring was not responsible for the determination of eligibility. ? In 2022, Pierce County issued a monitoring report asserting Wellspring was not in compliance with the determination of eligibility. Wellspring has vigorously disputed the findings in the report. Since we cannot obtain sufficient evidence to determine adherence to compliance requirements, we have qualified our opinion on compliance related to eligibility due to a scope limitation. Effect or Potential Effect An opinion on compliance over eligibility requirements was not able to be determined due to a scope limitation. Questioned Costs Not determinable. Cause Wellspring asserts that the contracts between Wellspring and Pierce County (the County) lack any formal guidance from the County. As such, Wellspring implemented internal controls based its interpretation of the compliance requirements. Repeat Finding Repeat of finding 2021-003. Recommendation We recommend that Wellspring implement internal controls to ensure that Wellspring?s responsibilities over compliance with specific grant terms are verified before entering into the award. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2022-001 Auditor scope limitation over applicability and determination of eligibility requirements Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-108463-1 Award Period: July 1, 2021 through June 30, 2022 Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-107790 Award Period: June 1, 2020 through August 31, 2022 Criteria The auditor is required to test compliance requirements that are determined to be direct and material to the Federal major program. Condition/Context for Evaluation We were unable to determine if eligibility was direct and material to the federal major program being tested for the following reasons: ? The grantor and Wellspring are not in agreement as to the responsibilities over the determination of eligibility. ? The contracts lack clarity and are contradictory as to whether Wellspring or other parties are responsible for the determination of eligibility. ? Wellspring asserts and has received an outside legal opinion that Wellspring was not responsible for the determination of eligibility. ? In 2022, Pierce County issued a monitoring report asserting Wellspring was not in compliance with the determination of eligibility. Wellspring has vigorously disputed the findings in the report. Since we cannot obtain sufficient evidence to determine adherence to compliance requirements, we have qualified our opinion on compliance related to eligibility due to a scope limitation. Effect or Potential Effect An opinion on compliance over eligibility requirements was not able to be determined due to a scope limitation. Questioned Costs Not determinable. Cause Wellspring asserts that the contracts between Wellspring and Pierce County (the County) lack any formal guidance from the County. As such, Wellspring implemented internal controls based its interpretation of the compliance requirements. Repeat Finding Repeat of finding 2021-003. Recommendation We recommend that Wellspring implement internal controls to ensure that Wellspring?s responsibilities over compliance with specific grant terms are verified before entering into the award. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Finding Number 2022-001: Significant deficiency in internal controls over applicability and determination of eligibility requirements. Contact Person(s): Cobie Sparks-Howard, Director of Housing Services; Calli Clevinger, Housing Program Manager Corrective Action Plan: Wellspring has a long tradition of beginning work prior to having a signed contract in hand for ongoing programs. Wellspring recognizes the urgency of its clients? needs and wishes to help. However, beginning work prior to having a signed contract for a new program meant that systems and training were completed before Wellspring knew the terms of the contract. Beginning in 2023, Wellspring will no longer begin work prior to receiving a signed contract for a new program. Second, contracts often contain provisions that impact several areas within the agency, such as systems, finance, human resources, and programs. However, prior to 2023, contracts were generally reviewed by a limited number of individuals prior to being signed and were circulated among the broader team inconsistently. As a result, there was no centralized control over whether the terms of the contract were reviewed by the responsible party or implemented appropriately. Wellspring identified this as an issue in 2021 and instituted monthly contract meetings. However, it soon became evident that we needed a central tracking system and approval process in order to ensure compliance. Wellspring is currently in the process of building a contract management system that will manage both the approval process and the compliance aspects of our contracts. We expect this system to be fully implemented by September 30, 2023. Finally, in 2022, Wellspring hired a new and experienced housing director who has established new internal controls at the program level, including quarterly internal audit review procedures. Anticipated completion date: June 30, 2023.
2021-003
FAC accepted this audit on October 1, 2023 — management decision was due April 1, 2024.
Significant Deficiency in Internal Controls over Compliance for Reporting related to the submission of Single Audit reporting package. Federal Agency: All awards Program Title: All awards Federal Assistance Number: All awards Award Number: All awards Award Period: All awards Criteria In accordance with 2 CFR 200.512, the 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(s), or nine months after the end of the audit period. Condition/Context for Evaluation For the year ended December 31, 2021, the Single Audit reporting package was submitted after the required nine-month reporting deadline. Effect or Potential Effect The Single Audit reporting package and related data collection form for the year ended December 31, 2021 was not submitted by the due date. Questioned Costs Not applicable. Cause Wellspring needed additional time to respond to audit requests. Repeat Finding Not applicable. Recommendation We recommend that Wellspring implement internal controls to ensure timely completion of the Single Audit. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan. Repeat Finding Not applicable. Recommendation We recommend Wellspring implement the necessary internal controls to ensure financial reporting is performed accurately. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Show full finding ▾Hide full finding ▴Significant Deficiency in Internal Controls over Compliance for Reporting related to the submission of Single Audit reporting package. Federal Agency: All awards Program Title: All awards Federal Assistance Number: All awards Award Number: All awards Award Period: All awards Criteria In accordance with 2 CFR 200.512, the 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(s), or nine months after the end of the audit period. Condition/Context for Evaluation For the year ended December 31, 2021, the Single Audit reporting package was submitted after the required nine-month reporting deadline. Effect or Potential Effect The Single Audit reporting package and related data collection form for the year ended December 31, 2021 was not submitted by the due date. Questioned Costs Not applicable. Cause Wellspring needed additional time to respond to audit requests. Repeat Finding Not applicable. Recommendation We recommend that Wellspring implement internal controls to ensure timely completion of the Single Audit. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan. Repeat Finding Not applicable. Recommendation We recommend Wellspring implement the necessary internal controls to ensure financial reporting is performed accurately. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Finding Number 2021-002: Significant Deficiency in Internal Controls over Compliance for Reporting related to the Submission of the Single Audit reporting package. Contact Person: Brian Jonas, Controller Corrective action planned: During the 2021 audit, Wellspring was notified of contract dispute by one funder with two contracts. These contracts contain federal funding so the outcome of the dispute could impact the schedule of federal expenditures and single audit results. Wellspring disclosed the dispute to its auditors and discussed the appropriate course of action. Wellspring and its auditors mutually agreed that it would be appropriate to review the findings behind the contract dispute and conduct further testing to determine the impact to the single audit. This was an unusual circumstance related to a late notice of dispute from the funder. We do not foresee this type of delay occurring in future audits. Anticipated completion date: March 2023.
Auditor scope limitation over applicability and determination of eligibility requirements Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-108463-1 Award Period: July 1, 2021 through June 30, 2022 Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-107790 Award Period: June 1, 2020 through December 31, 2021 Criteria The auditor is required to test compliance requirements that are determined to be direct and material to the Federal major program. Condition/Context for Evaluation We were unable to determine if eligibility was direct and material to the federal major program being tested for the following reasons: ? The grantor and Wellspring are not in agreement as to the responsibilities over the determination of eligibility. ? The contracts lack clarity and are contradictory as to whether Wellspring or other parties are responsible for the determination of eligibility. ? Wellspring asserts and has received an outside legal opinion that Wellspring was not responsible for the determination of eligibility. ? In 2022, Pierce County issued a monitoring report asserting Wellspring was not in compliance with the determination of eligibility. Wellspring has vigorously disputed the findings in the report. Since we cannot obtain sufficient evidence to determine adherence to compliance requirements, we have qualified our opinion on compliance related to eligibility due to a scope limitation. Effect or Potential Effect An opinion on compliance over eligibility requirements was not able to be determined due to a scope limitation. Questioned Costs Not determinable. Cause The contracts between Wellspring and Pierce County (the County) were not issued until after the start of the audit period and Wellspring asserts there was a lack of any formal guidance from the County. As such, Wellspring implemented internal controls based its interpretation of the compliance requirements. Repeat Finding Not a repeat finding. Recommendation Wellspring should implement a control system to ensure a review of all eligibility requirements are being met prior to distribution of federal funds. Documentation related to eligibility determinations should be saved in a centralized location. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Show full finding ▾Hide full finding ▴Auditor scope limitation over applicability and determination of eligibility requirements Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-108463-1 Award Period: July 1, 2021 through June 30, 2022 Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-107790 Award Period: June 1, 2020 through December 31, 2021 Criteria The auditor is required to test compliance requirements that are determined to be direct and material to the Federal major program. Condition/Context for Evaluation We were unable to determine if eligibility was direct and material to the federal major program being tested for the following reasons: ? The grantor and Wellspring are not in agreement as to the responsibilities over the determination of eligibility. ? The contracts lack clarity and are contradictory as to whether Wellspring or other parties are responsible for the determination of eligibility. ? Wellspring asserts and has received an outside legal opinion that Wellspring was not responsible for the determination of eligibility. ? In 2022, Pierce County issued a monitoring report asserting Wellspring was not in compliance with the determination of eligibility. Wellspring has vigorously disputed the findings in the report. Since we cannot obtain sufficient evidence to determine adherence to compliance requirements, we have qualified our opinion on compliance related to eligibility due to a scope limitation. Effect or Potential Effect An opinion on compliance over eligibility requirements was not able to be determined due to a scope limitation. Questioned Costs Not determinable. Cause The contracts between Wellspring and Pierce County (the County) were not issued until after the start of the audit period and Wellspring asserts there was a lack of any formal guidance from the County. As such, Wellspring implemented internal controls based its interpretation of the compliance requirements. Repeat Finding Not a repeat finding. Recommendation Wellspring should implement a control system to ensure a review of all eligibility requirements are being met prior to distribution of federal funds. Documentation related to eligibility determinations should be saved in a centralized location. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Finding Number 2021-003: Auditor scope limitation over applicability and determination of eligibility requirements Contact Person(s): Cobie Sparks-Howard, Director of Housing Services; Calli Clevinger, Housing Program Manager Corrective Action Plan: Wellspring has a long tradition of beginning work prior to having a signed contract in hand for ongoing programs. Wellspring recognizes the urgency of its clients? needs and wishes to help. However, beginning work prior to having a signed contract for a new program meant that systems and training were completed before Wellspring knew the terms of the contract. Beginning in 2023, Wellspring will no longer begin work prior to receiving a signed contract for a new program. Second, contracts often contain provisions that impact several areas within the agency, such as systems, finance, human resources, and programs. However, prior to 2023, contracts were generally reviewed by a limited number of individuals prior to being signed and were circulated among the broader team inconsistently. As a result, there was no centralized control over whether the terms of the contract were reviewed by the responsible party or implemented appropriately. Wellspring identified this as an issue in 2021 and instituted monthly contract meetings. However, it soon became evident that we needed a central tracking system and approval process in order to ensure compliance. Wellspring is currently in the process of building a contract management system that will manage both the approval process and the compliance aspects of our contracts. We expect this system to be fully implemented by September 30, 2023. Finally, in 2022, Wellspring hired a new and experienced housing director who has established new internal controls at the program level, including quarterly internal audit review procedures. Anticipated completion date: June 30, 2023.
Material weakness in internal controls over compliance and instances of noncompliance related to the allowable cost principles compliance requirement. Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-108463-1 Award Period: July 1, 2021 through June 30, 2022 Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-107790 Award Period: June 1, 2020 through December 31, 2021 Criteria In accordance with 2 CFR 200.430, personnel expenses allocated directly to federal awards should be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, properly allocated and supported by adequate documentation. In addition, 2 CFR 200.403 requires that all allowable costs be supported by adequate documentation. Condition/Context for Evaluation Nine salary expenditures out of the twenty-five selected for testing, were not supported by the employee?s certification of their time and effort during the pay period as required by Wellspring?s documented policies and procedures. One nonpayroll expenditure out of twenty-five selected for testing was not supported by adequate supporting documentation. Effect or Potential Effect Wellspring did not fully comply with the requirements specified in the Federal Regulations. Questioned Costs Not determinable. Cause Wellspring?s internal controls did not ensure costs allocated to federal awards were supported by adequate documentation. Repeat Finding Yes. See Finding 2020-001 Recommendation We recommend Wellspring implement the necessary internal controls to ensure compensation costs are charged to federal awards based on a fair and equitable distribution method that is adequately documented and in accordance with Federal Regulations. We also recommend Wellspring ensure adequate record retention procedures be applied, so that all charges to federal awards be supported by adequate supporting documentation. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Show full finding ▾Hide full finding ▴Material weakness in internal controls over compliance and instances of noncompliance related to the allowable cost principles compliance requirement. Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-108463-1 Award Period: July 1, 2021 through June 30, 2022 Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-107790 Award Period: June 1, 2020 through December 31, 2021 Criteria In accordance with 2 CFR 200.430, personnel expenses allocated directly to federal awards should be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, properly allocated and supported by adequate documentation. In addition, 2 CFR 200.403 requires that all allowable costs be supported by adequate documentation. Condition/Context for Evaluation Nine salary expenditures out of the twenty-five selected for testing, were not supported by the employee?s certification of their time and effort during the pay period as required by Wellspring?s documented policies and procedures. One nonpayroll expenditure out of twenty-five selected for testing was not supported by adequate supporting documentation. Effect or Potential Effect Wellspring did not fully comply with the requirements specified in the Federal Regulations. Questioned Costs Not determinable. Cause Wellspring?s internal controls did not ensure costs allocated to federal awards were supported by adequate documentation. Repeat Finding Yes. See Finding 2020-001 Recommendation We recommend Wellspring implement the necessary internal controls to ensure compensation costs are charged to federal awards based on a fair and equitable distribution method that is adequately documented and in accordance with Federal Regulations. We also recommend Wellspring ensure adequate record retention procedures be applied, so that all charges to federal awards be supported by adequate supporting documentation. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Finding Number 2021-004: Material weakness in internal controls over compliance and instances of noncompliance related to allowable cost principles compliance requirement. Contact Person: Jennafer Price Cargill, Human Resource Manager; Brian Jonas, Controller Corrective action planned: In Wellspring?s first Single Audit, which was completed on March 18, 2022, our auditors identified an issue related to payroll expense tracking in finding 2020-001. The allocation approach traditionally used by Wellspring to track expenses was not sufficient under the Uniform Grant Guidance. In order to ensure accurate reporting, Wellspring implemented a manual time attestation process in order to ensure that the payroll records were appropriately documented and personnel costs were appropriately charged to grant programs. At the same time, Wellspring attempted to implement a new time and expense billing system within its payroll system. This system would eliminate the need for manual time certifications and require employees to record their time worked on each program weekly. However, the system implementation failed, and Wellspring continued to rely on the manual time attestations. The manual attestation approach was flawed because no single individual was held responsible for collecting all attestation forms on a timely basis. Wellspring has assigned responsibility to a specific employee in the human resources team to ensure that all manual attestations are completed on a timely basis, and a single individual in the accounting team to make sure that the attestations agree with the general ledger. Wellspring is also working on changing its payroll system to a time and expense system that is linked to the accounting system. The new system is expected to be implemented by June 30, 2023. Anticipated completion date: June 30, 2023
2020-001
FAC accepted this audit on March 29, 2022 — management decision was due September 29, 2022.
Criteria Section 601 of the Social Security Act as added by section 5001(a) of the Coronavirus Aid, Relief, and Economic Security Act and Federal Register Vol. 86, No. 10 issued January 15, 2021, require that personnel expenses allocated directly to federal awards be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, properly allocated and supported by adequate documentation. Condition/Context for Evaluation Nine salary expenditures out of the twenty-five selected for testing, were not supported by the employee?s certification of their time and effort during the pay period as required by Wellsprings documented procedures. Additionally, six salary expenditures out of the twenty-five selected for testing, were charged to the award at a rate that differed from the employee?s certification of their time and effort during the pay period. This was not a statistical sample. Effect or Potential Effect Wellspring did not fully comply with the requirements specified in the Federal Regulations. Questioned Costs Not determinable. Cause Wellspring?s internal controls did not ensure that employees time allocated to federal awards was supported by adequate documentation. Repeat Finding Not a repeat finding. Recommendation We recommend Wellspring implement the necessary internal controls to ensure compensation costs are charged to federal awards based on a fair and equitable distribution method that is adequately documented and in accordance with Federal Regulations. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Show full finding ▾Hide full finding ▴Criteria Section 601 of the Social Security Act as added by section 5001(a) of the Coronavirus Aid, Relief, and Economic Security Act and Federal Register Vol. 86, No. 10 issued January 15, 2021, require that personnel expenses allocated directly to federal awards be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, properly allocated and supported by adequate documentation. Condition/Context for Evaluation Nine salary expenditures out of the twenty-five selected for testing, were not supported by the employee?s certification of their time and effort during the pay period as required by Wellsprings documented procedures. Additionally, six salary expenditures out of the twenty-five selected for testing, were charged to the award at a rate that differed from the employee?s certification of their time and effort during the pay period. This was not a statistical sample. Effect or Potential Effect Wellspring did not fully comply with the requirements specified in the Federal Regulations. Questioned Costs Not determinable. Cause Wellspring?s internal controls did not ensure that employees time allocated to federal awards was supported by adequate documentation. Repeat Finding Not a repeat finding. Recommendation We recommend Wellspring implement the necessary internal controls to ensure compensation costs are charged to federal awards based on a fair and equitable distribution method that is adequately documented and in accordance with Federal Regulations. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Finding Number 2020-001: Significant deficiency in internal controls over compliance and instances of noncompliance related to allowable costs/cost principles compliance requirement. Contact Person(s): Brian Jonas, Controller Corrective action planned: Wellspring completely restructured its Housing Department. Billings and contract oversight will be managed by an Operations Director who reports to the Chief Program Officer. Program Managers will be responsible for allocations of time to programs, with the approval of the Housing Director. However, budgets will be reviewed by the Operations Director in order to improve internal controls. The Housing Director, who will still be responsible for performance on contracts, will also report to the Chief Program Officer. In addition, the HR department is now responsible for ensuring that all New Hire/Change Forms are signed, approved, and retained. All contract invoices are now prepared by the Contract and Billing Manager who reports to the Controller, rather than the Program Manager. Housing invoices are signed by the Housing Director. Finally, the Agency now conducts monthly Contract Management meetings whereby all program and finance management staff brief and review status on all contracts. By dividing responsibilities in this way, we are confident we will not have any new issues with contract funds. We have already hired the Chief Program Officer. Bevette Irvis is a widely respected leader who has served Wellspring for over 30 years and is the model of integrity. Our Chief Strategy officer is currently serving in the capacity of Housing Director. He will continue to fill that position until we find an appropriate hire for that role. We have been interviewing finalists for the Operations Director role and expect to make a hire in early 2022. We have hired a Contract and Billing Manager with extensive expertise in contract billing. In addition, the CEO, Heather Fitzpatrick, a CPA, has stepped in to help ensure that staff understand contract terms and comply with them in full. Anticipated completion date: Continuous from 2000 through 2022.
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