EIN: 930386860
UEI: K3AHYL5LSR28
Data as of August 20, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 24, 2026. 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 September 24, 2026 (34 days from today).
What is a management decision? →Finding 2025-001 Significant deficiency in internal control in internal control over compliance with allowable costs/cost principles requirements. Identification of the Federal Program Federal Agency All Program Title: All Assistance Listing Number: All Award Numbers: All Award Periods: All Criteria In accordance with 2 CFR Part 200, costs charged to a federal award must be necessary, reasonable, allowable under the cost principles, allocable, and adequately documented; entertainment costs are specifically unallowable per 2 CFR 200.438, and costs must be allocated consistently between federal awards and other activities, as inconsistent allocation is not permitted under the Uniform Guidance. Condition During our audit, two expenses totaling $2,917 of 25 tested expenses tested in the indirect allowable cost pool were identified in the indirect cost pool as unallowable costs as they were for meals associated with entertainment for staff morale. Questioned Costs N/A Cause Unallowable costs were charged as the Organization lacked adequate review procedures to ensure charges to the allowable indirect cost pool were in compliance with federal cost principles. Effect The indirect cost pool contained $2,917of known unallowable costs included in the indirect cost population. Repeat Finding No Recommendations We recommend that the Organization strengthen controls over the coding and approval od expenses allowable to the indirect cost pool.
Finding 2025-001 Significant deficiency in internal control in internal control over compliance with allowable costs/cost principles requirements. Contact Person(s): Nicholas Lee, Chief Financial Officer Corrective action planned: Management has enhanced internal controls within the expense reporting platform by adding additional key trigger words designed to flag potentially unallowable costs. These automated alerts prompt users to review and validate whether a charge is allowable or unallowable prior to submission. In addition, the Finance Department will implement mandatory annual training sessions for managers and above to reinforce allowable costs principles and expense documentation requirements. Updated reference materials included written guidance will be published on the Finance Department intranet for ongoing access by staff. These actions are intended to strengthen preventative controls, improve user awareness, and reduce the risk of unallowable costs being charged to federal and other restricted funding sources. Anticipated completion date: August 31, 2026
Finding 2025-002 Significant deficiency in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Identification of the Federal Program Federal Agency: The United States Department of Housing and Urban Development Program Title: Continuum of Care Program Assistance Listing Number: 14.267 Award Numbers: All Award Periods: All Criteria Requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Subpart D – Post Federal Award Requirements, Sections 200.318 through 200.326, require that a nonfederal entity establish and follow a written procurement policy that conforms to federal standards. The Uniform Guidance further requires that procurement transactions be documented in sufficient detail to provide a complete history of the procurement, including the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR 200.318(i), 200.319, and related sections). The written procurement policy must identify formal and informal procurement actions to be taken based on the size of the procurement, covering both goods and services, and must require documentation to support compliance with those requirements. Condition The Organization did not maintain adequate procurement documentation to support procurement transactions. For four out of nine of the items tested, the Organization could not provide documentation sufficient to evidence the method of procurement and that adequate price quotes were received in accordance with the Organizations documented procurement policy. Cause The Organization’s internal controls were insufficient to ensure that required procurement documentation was prepared, retained, and reviewed in accordance with its written procurement policy and Uniform Guidance requirements. Questioned Costs Not applicable. Effect The Organization did not retain documentation sufficient to comply the procurement standards set out at 2 CFR Part 200 as it related to the selected procurement transactions. Repeat Finding No
Finding 2025-002 Significant deficiency in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Contact Person(s): Nicholas Lee, Chief Financial Officer Corrective action planned: Management will revise the organization's procurement policy to amend the current dollar threshold, which was determined to be overly restrictive and inconsistent with operational needs and federal procurement standards under 2 CFR Part 200. The updated threshold will align with the Uniform Guidance requirements and provide clear guidance for competitive procurement processes. In addition, the organization will implement a standardized Vendor Justification Form. This form will be required for applicable purchases and will document the rationale for vendor selection, including the price analysis, sole source justification (if applicable), and confirmation that the procurement procedures were followed in accordance with federal requirements. These corrective actions are intended to strengthen internal controls over procurement, improve documentation consistency, and ensure compliance with 2 CFR 200 requirements. Anticipated completion date: August 31, 2026
Finding 2025-003 Significant deficiency in internal controls over compliance and instance of noncompliance related to matching requirements. Identification of the Federal Program Federal Agency: The United States Department of Housing and Urban Development Program Title: Continuum of Care Program Assistance Listing Number: 14.267 Award Numbers: All Award Periods: All Criteria Internal controls should ensure that the Organization’s population of allowable matching costs only include amounts from allowable sources in accordance with 2 CFR 200.306. Condition During testing of the matching compliance requirement we received an unsubmitted excel workbook identifying the matching costs eligible to be claimed during the period under audit. During testing of the aggregated charges it was identified five out of our 25 matching charges identified were improperly included as eligible in the excel workbook aggregating the matching cost pool as they were from an unallowable source. The error was due to a clerical allocation error within the spreadsheet identifying the matching charges. After correcting for the clerical error the unallowable costs were removed from the cost pool and the Organization determined it still had sufficient allowable and allocable charges to meet the awards matching requirements. Cause The primary cause of this issue is associated with inadequate internal controls relating to the spreadsheet design and review. Effect The effect of ineligible costs were included in the preliminary matching cost pool, there is a risk that reported match amounts could have been inaccurate and that reported cost sharing or matching would not meet the requirements of 2 CFR 200.306. Questioned Costs Not applicable. Recommendation We recommend that the Organization strengthen controls over the preparation and review of the matching cost pool by modifying the Excel workbook or other tools used to identify matching costs to ensure that only specifically designated matching expenses are included, implementing a formal review of the matching cost pool.
Finding 2025-003 Significant deficiency in internal controls over compliance and instance of noncompliance related to matching requirements. Contact Person(s): Nicholas Lee, Chief Financial Officer Corrective action planned: Management identified that the required matching report was not submitted to the funder in accordance with the grant deliverable requirements. The organization has since reviewed the grant agreement to ensure full understanding of all reporting and matching obligations. Corrective actions have been implemented. A centralized grant compliance checklist has been developed to outline all required deliverables, including matching report deadlines. Matching requirements have been incorporated into the organization’s grant reporting calendar with reminder controls in place. Responsibility for tracking and submitting match documentation has been formally assigned to designated Finance personnel, with supervisory review prior to submission. These measures strengthen internal controls over grant compliance and are designed to ensure timely submission of all required matching documentation going forward. Anticipated completion date: Implemented as of December 31, 2025
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 4, 2024. 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 September 4, 2024, which was (716 days ago).
What is a management decision? →Finding 2023‐002 Material weakness in internal controls over compliance for earmarking and material noncompliance for earmarking in the U.S. Refugee Admissions Program. Federal Agency: Department of State Pass-Through Agency: Lutheran Immigration and Refugee Service Program Title: U.S. Refugee Admissions Program Assistance Listing Number: 19.510 Award Numbers: 323-22-00 and 323-23-00 Award Periods: January 1, 2022 to September 30, 2022 and October 1, 2022 to September 30, 2023 Criteria The underlying awards identify an earmarking requirement requiring thresholds of direct assistance to be provided on behalf of each eligible arriving refugee. Award number 323-22-00 states at least $1,225 is to be used to cover payments made to or on behalf of a refugee for cash disbursements or for material goods, as needed, to meet the requirements of the program. No less than $1,025 of this $1,225 must be spent for or on behalf of each refugee during that refugees reception and replacement (R&P) service delivery period. Up to $200 of this $1,225 may be pooled into a flexible fund to spend on behalf of other vulnerable refugees assigned to the same affiliate/sub-office who have unmet needs during their R&P period (within 90 days of the refugee’s arrival date). Award number 323-23-00 states at least $1,275 is to be used to cover payments made to or on behalf of refugees for cash disbursements or for material goods, as needed, to meet the requirements of the program. No less than $1,075 of this $1,275 must be spend for or on behalf of each refugee during that refugees reception and replacement (R&P) service delivery period. Up to $200 of this $1,275 may be pooled into a flexible fund to spend on behalf of other vulnerable refugees assigned to the same affiliate/sub-office who have unmet needs during their R&P period (within 90 days of the refugee’s arrival date). Condition/Context for Evaluation During our audit we were unable to obtain reporting that identified how much direct assistance was made to or on behalf of each refugee. Effect or Potential Effect The Organization may not have met earmarking requirements as outlined in the underlying award agreements and have controls to effectively monitor that earmarking requirements were met. Questioned Costs Not applicable. Cause Internal controls were not in place to ensure earmarking requirements were met. Repeat Finding Not applicable. Recommendation We recommend that the Organization implement a process to identify the value of direct assistance that was provided to each eligible refugee as recorded within the financial records. Further, we recommend internal controls over compliance are implemented to monitor that direct assistance is distributed to meet the earmarking requirements included within the grant terms. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2023‐002 Material weakness in internal controls over compliance for earmarking and material noncompliance for earmarking in the U.S. Refugee Admissions Program. Contact Person(s): Nicholas Lee, Chief Financial Officer Corrective action planned: The accounting team will work alongside the program management to develop and maintain a client tracker. Monthly meetings will be established to review spend, and resolve any questions. The client tracker will be established for the entire FYE June 30, 2024, and completed by August 31, 2024. The meetings will be established prior to the FYE June 30, 2024. Anticipated completion date: August 31, 2024
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 14, 2023. 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 December 14, 2023, which was (981 days ago).
What is a management decision? →Finding 2022-002Significant deficiency in internal controls over compliance for reporting related to the submission of Single Audit reportingpackage.Federal Agency: All awardsProgram Title: All awardsALN: All awardsAward Number: All awardsAward Period: All awardsCriteriaIn accordance with 2 CFR 200.512, the audit must be completed and the data collection form and reporting package mustbe submitted within the earlier of 30 calendar days after receipt of the auditor?s report(s), or nine months after the end ofthe audit period.Condition/Context for EvaluationThere was not a system of controls in place to prevent a late submission of the Single Audit reporting package, including thedata collection form to the Federal Audit Clearinghouse.Effect or Potential EffectThe Single Audit reporting package and related data collection form for the year ended June 30, 2022 was not submitted bythe due date.Questioned CostsNot applicable.CauseInternal controls were not in place to ensure timely filing.Repeat FindingThis is a repeat finding of 2021-001RecommendationWe recommend that the Organization review the internal controls in place to ensure the data collection form and reportingpackage can be submitted timely to the Federal Audit Clearinghouse.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-002Significant deficiency in internal controls over compliance for reporting related to the submission of Single Audit reportingpackage.Contact Person(s):Nicholas Lee, Chief Financial OfficerCorrective action planned:The agency again experienced turnover in staffing and unplanned absences that constrained resources for the consolidatedSingle Audit. The system of controls is in place, which relies on appropriate staffing and training to ensure timelycompletion and submission of the Single Audit reporting package. Staffing positions have been filled and stabilized to satisfythe compliance requirements.Anticipated completion date:May 31, 2023
2021-001
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Contact Person(s):Nicholas Lee, Chief Financial OfficerCorrective action planned:The Organization will provide additional training to employees responsible for incurring costs in accordance with 2 CFR200.403. Additional resources have been assigned to review and ensure documentation and policies are retained to supportthe distribution of charges between projects. Anticipated completion date:June 30, 2023
Finding 2022-004Significant deficiency in internal controls over compliance and instance of noncompliance related to matchingrequirements.Federal Agency: Department of Housing and Urban DevelopmentProgram Title: Continuum of Care ProgramAssistance Listing Number: 14.267Award Number: 6204649Award Period: 1/1/21 - 12/31/21CriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D ? Post Federal AwardRequirements, Section 200.306.Condition/Context for EvaluationFor the Ronald Commons award tested the project was identified as 12 units of permanent supportive housing out of 60total units of housing at the property. Accordingly, shared costs of the property were allocated to the project based upon itsshare of funded units. However, the portion of the shared costs which were not allocated to the federal award and projectwere identified as the eligible matching expenditures. Accordingly, these charges were for the shared costs that were costsof the property outside of the defined project. Effect or Potential EffectThe Organization claimed matching expenditures that were not allocable to the project as defined in the award agreement.Questioned Costs$41,254CauseInternal controls were not designed to ensure that the matching funds were from an allowable source.Repeat FindingNot applicable.RecommendationWe recommend that the Organization develops further internal controls to ensure that all matching funds claimed are froma source that is limited to the project.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-004Significant deficiency in internal controls over compliance and instance of noncompliance related to matchingrequirements.Contact Person(s):Nicholas Lee, Chief Financial OfficerCorrective action planned:Vacated staff position filled and additional support staff retraining on matching funds claimed to ensure the source is limitedto the project is underway.Anticipated completion date:June 30, 2023
Finding 2022-005Significant deficiency in internal controls over compliance for reporting.Federal Agency: Department of Health and Human ServicesProgram Title: Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionAssistance Listing Number: 93.498Award Number: N/AAward Period: 1/1/20 - 12/31/21CriteriaThe Provider Relief Reporting should be supported by records that accurately accumulate and summarize the data.Condition/Context for EvaluationDue to a clerical error made when aggregating data for reporting into the Provider Relief Fund (PRF) reporting portal theamounts entered for the 3rd and 4th quarter 2019 actual amounts included in the calculation of lost revenues attributable tocoronavirus per the report were mistakenly reporting the actual 1st and 2nd quarter revenue for calendar year 2020. Inaddition, the 2nd quarter of 2021 was reported with revenue of $166,978 less than what was calculated from the supportingfinancial records.Effect or Potential EffectThe Organization inaccurately reported the amount of lost revenues. Actual Cumulative Lost Revenues for the reportingperiod was $3,340,736 compared to a reported amount of $5,556,375. Lost revenues remained in excess of the total awardamount of $438,460. Questioned CostsN/ACauseThere were not adequate controls in place to ensure that the information aggregated from the Organizations financialreports were properly input into the reporting portal.Repeat FindingNot applicable.RecommendationWe recommend that the Organization develops further internal controls to ensure that all amounts reported agree to theunderlying systems information.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-005Significant deficiency in internal controls over compliance for reporting.Contact Person(s):Nicholas Lee, Chief Financial OfficerCorrective action planned:Reports submitted after March 31, 2022 to the Provider Relief Fund portal are reviewed by a finance employee other thanthe creator. The March 31, 2023 reporting period was submitted with corrected prior quarter revenues.Anticipated completion date:March 31, 2023
Finding 2022-006Significant deficiency in compliance and internal controls over compliance and instance of noncompliance related to periodof performance.Federal Agency: Department of the TreasuryProgram Title: Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 21.027Award Number: DA-239Award Period: 1/1/2022 - 12/31/2022CriteriaPer the standards contained in Title 2 US Code of Federal Regulations Uniform Administrative Requirements, Cost Principlesand Audit Requirements for Federal Awards, Subpart D - Post Federal Award Requirements, Section 200.309, only allowablecosts incurred during the period of performance may be charged to the federal award.Condition/Context for EvaluationDuring our audit, from a sample of 40 transactions tested for period of performance, we identified 16 instances where thecost was incurred prior to the beginning of the award?s period of performance. Identified charges incurred prior to thebeginning of the period of performance totaled $1,702. Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged to the federal award costs incurred outside of the period of performance.Questioned Costs$1,702CauseThe Organization?s controls did not operate effectively to prevent or detect expenditures that were incurred outside of thefederal award?s period of performance. Repeat FindingNot applicable.RecommendationWe recommend that the Organization review its internal control processes and procedures to ensure there are adequatecontrols in place to identify and prevent charges to federal awards that did not occur within the award?s period ofperformance.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-006Significant deficiency in compliance and internal controls over compliance and instance of noncompliance related to periodof performance.Contact Person(s):Nicholas Lee, Chief Financial OfficerCorrective action planned:Vacated billing staff position filled and additional support staff retraining underway to ensure incurred costs documentationis available for processing during the period of performance and subsequent cost reimbursements bills are submitted tofederal awards within appropriate period of performance timeframe.Anticipated completion date:June 30, 2023
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on December 7, 2022. 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 June 7, 2023, which was (1171 days ago).
What is a management decision? →Finding 2021-001 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 CFDA Number: All awards Award Number: All awards Award Period: All awards Criteria In accordance with 2 CFR 200.512, the 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. Under Office of Management and Budget Memorandum M-21-20 entities were provided an additional six months beyond the normal due date for submitting Single Audit reporting packages with the Federal Audit Clearinghouse. Condition/Context for Evaluation There was not a system of controls in place to prevent a late submission of the Single Audit reporting package, including the data collection form to the Federal Audit Clearinghouse. Effect or Potential Effect The Single Audit reporting package and related data collection form for the year ended June 30, 2021 was not submitted by the extended due date. Questioned Costs Not applicable. Cause Internal controls were not in place to ensure timely filing. Repeat Finding Not applicable. Recommendation We recommend that the Organization review the internal controls in place to ensure the data collection form and reporting package can be submitted timely to the Federal Audit Clearinghouse. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Contact Person(s): Nicholas Lee, Chief Financial Officer Corrective action planned: Two significant events occurred that impacted the system of controls in a way that only time and retraining could rectify. First, the agency affiliated with another agency, which required additional discovery and coordination to prepare for both Financial and Single audits. Second, the agency experienced turnover in key financial positions that constrained resources for the first time affiliated agencies and consolidated audits. The system of controls is in place, which relies on appropriate staffing and training to ensure timely completion and submission of the Single Audit reporting package. Key financial positions have been filled and staffing stabilized to satisfy the compliance requirements. Anticipated completion date: September 30, 2022
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on November 19, 2019. 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 May 19, 2020, which was (2285 days ago).
What is a management decision? →Finding 2019-001: Significant deficiency in internal controls over allowable compensation costs. Federal Agency: Department of State CFDA Number/Title: 19.510/U.S. Refugee Admissions Program Pass-Through Funder: Lutheran Immigration and Refugee Services Award Numbers: SPRMCO18CA0003; SPRMCO19CA0003 Award Periods: 10/1/2017 - 12/31/2018; 1/1/2019 - 9/30/2019 Federal Agency: Department of Justice CFDA Number/Title: 16.575/ Crime Victims Assistance Pass-Through Funder: State of Washington Department of Commerce Award Numbers: F17-31219-544; 19-31219-024; 19-31310-140; F17-31219-569; 19-31219-051; F17-31219-727; F17-31219-357 Award Periods: 1/1/2018 - 6/30/2019; 7/1/2018 - 6/30/2019; 7/1/2018 - 6/30/2019; 1/1/2019 - 6/30/2019; 7/1/2018 - 6/30/2019; 7/1/2018 - 6/30/2019; 1/1/2018 - 9/30/2019 Criteria Per the standards contained in Title 2 US Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirement for Federal Awards, Subpart D - Post Federal Award Requirements, Section 200.303, non-federal entities are required to 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 and Context for Evaluation The Organization maintains an internal control process that requires a program manager to electronically sign off as a reviewer on timecards, supporting the allocation of compensation expenditures to the program as an allowable activity and cost. During our audit, we tested an initial sample of 25 compensation disbursements and identified 1 instance in which the time card did not have proper approval from the program manager. Further, the Organization maintains an internal control process that requires all wage rates to be authorized. During our audit, we tested an initial sample of 25 payroll disbursements and identified 2 instances in which the wage rate did not have documented approval. Our sample was not a statistical sample. Questioned Costs Not applicable Effect or Potential Effect Charges to federal awards for payroll expenditures may not be in compliance with the allowable activities and allowable cost principle requirements. Cause The Organization did not follow internal control policies that require timecards and wage rates to have documented approvals. Repeat Finding Finding 2019-001 is not a repeat finding. Recommendation We recommend that the Organization obtain proper authorizations in accordance with its internal control policies. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2019-001: Contact Person Karyn Huffman, Chief Financial Officer 206-816-3212 khuffman@lcsnw.org Explanation and Specific Reasons for Disagreement With the Audit Finding or That Corrective Action is not Required (if Applicable) No disagreement. Corrective Action Planned LCS installed an electronic timekeeping system with its first full year of operations during the fiscal year ending June 30, 2019. In established controls and procedures, we committed to strong internal controls for approval of time signifying completeness and validity of time charged to all programs. LCS is strengthening entity level controls and control procedures to ensure controls are in place to ensure completeness and validity of time charged by: Enforcing through executive and leadership team accountability for supervisors and manager the internal controls over pay rate changes and approval of time reporting. Accountability includes incorporating proper pay change and time reporting approvals into markers of manager and Human Resources personnel performance. Payroll process controls design review and operational effectiveness self-assessment testing to ensure that late approvals have follow-up and documentation processes. Process includes escalation, training and tracking for accountability should managers fail to approve employee time properly; Annual training requirement for managers who approve time to support accountability and ability to perform the review meaningfully; and Internal control processes with Human Resources and Finance to validate that pay rate changes followed automated workflow approval processes. Anticipated Completion Date November, 2019
Finding 2019-002 Significant deficiency in internal control and instances of noncompliance related to allowable costs. Federal Agency: Department of State CFDA Number/Title: 19.510/U.S. Refugee Admissions Program Pass-Through Funder: Lutheran Immigration and Refugee Services Award Numbers: SPRMCO18CA0003; SPRMCO19CA0003 Award Periods: 10/1/2017 - 12/31/2018; 1/1/2019 - 9/30/2019 Criteria Per the standards contained in Title 2 US Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart D - Post Federal Award Requirements, Section 200.430, incentive compensation is allowable to the extent that costs are paid pursuant to an agreement entered into in good faith between the entity and the employee before the services were rendered. Per the standards contained in Title 2 US Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart D - Post Federal Award Requirements, Section 200.445, costs of goods or services for personal use of employees are unallowable regardless of whether the cost is reported as taxable income to the employees. Condition and Context for Evaluation During our audit, out of a sample of 40 direct expenditures selected for testing, we noted the following 2 instances in which an expenditure was for an unallowable cost charged directly to the federal award: - We noted the Organization directly charged an employee bonuses to a federal award not pursuant to an agreement entered before the services were rendered or to an established policy that meets required criteria. - We noted the Organization directly charged costs incurred for flowers for an employee to a federal award. Our sample was not a statistical sample. Questioned Costs $513.80 Effect or Potential Effect The Organization charged unallowable costs to federal awards during the year ended June 30, 2019. Cause The Organization?s controls did not operate effectively to ensure that all costs were allowable in accordance with 2 CFR 200. Repeat Finding Finding 2019-002 is not a repeat finding. Recommendation We recommend that the Organization review its internal control processes and procedures to ensure there are adequate controls in place to ensure that costs charged to awards are allowable in accordance with 2 CFR 200. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2019-002: Contact Person Karyn Huffman, Chief Financial Officer 206-816-3212 khuffman@lcsnw.org Explanation and Specific Reasons for Disagreement With the Audit Finding or That Corrective Action is not Required (if Applicable) No disagreement. Corrective Action Planned LCSNW is committed to ensuring that costs charged to Federal contracts are valid as defined by Uniform Administrative Requirements for the accuracy and validity of costs charged to Federal awards. The two instances identified in the non-statistical sampling of the audit demonstrate the need for stronger detect controls for non-allowable costs. LCSNW has or will install additional detect control processes and policy clarify for these unallowable costs as follows: The non-allowable purchase charged to a federal contract occurred prior to LCSNW installing an electronic expense reporting system. We have established preventative and detective controls as well as additional training for staff to monitor and review for unallowable expenses. With respect to bonuses charged to the federal contract for which a supporting policy was not in place, we are installing additional prevent controls between Finance and HR to ensure all wage changes, including bonuses, follow automated workflow approval processes. Additionally, with the passage of fair pay and equity laws in two of the three states in which we operate, we will update policies to reflect applicability of bonus pay for all employees.
Finding 2019-003 Significant deficiency in internal control and instances of noncompliance related to period of performance requirements. Federal Agency: Department of Justice CFDA Number/Title: 16.575/ Crime Victims Assistance Pass-Through Funder: State of Washington Department of Commerce Award Numbers: F17-31219-544; 19-31219-024; 19-31310-140; F17-31219-569; 19-31219-051; F17-31219-727; F17-31219-357 Award Periods: 1/1/2018 - 6/30/2019; 7/1/2018 - 6/30/2019; 7/1/2018 - 6/30/2019; 1/1/2019 - 6/30/2019; 7/1/2018 - 6/30/2019; 7/1/2018 - 6/30/2019; 1/1/2018 - 9/30/2019 Criteria Per the standards contained in Title 2 US Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart D - Post Federal Award Requirements, Section 200.309, only allowable costs incurred during the period of performance may be charged to the federal award. Condition and Context for Evaluation During our audit, out of a sample of 25 selections for period of performance testing, we note 1 instance in which a charge to the federal award incurred prior to the award?s period of performance. Our sample was not a statistical sample. Questioned Costs $11.93 Effect or Potential Effect The Organization charged to the federal award costs incurred outside of the period of performance. Cause The Organization?s controls did not operate effectively to prevent or detect expenditures that were incurred outside of the federal awards period of performance. Repeat Finding Finding 2019-003 is not a repeat finding. Recommendation We recommend that the Organization review its internal control processes and procedures to ensure there are adequate controls in place to identify and prevent charges to federal awards that did not occur within the award?s period of performance. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2019-003: Contact Person Karyn Huffman, Chief Financial Officer 206-816-3212 khuffman@lcsnw.org Explanation and Specific Reasons for Disagreement With the Audit Finding or That Corrective Action is not Required (if Applicable) No disagreement. Corrective Action Planned LCSNW is committed to ensuring that costs charged to Federal contracts are valid as defined by Uniform Administrative Requirements for the accuracy and validity of costs charged to Federal awards. This error occurred at the beginning of the fiscal year as LCSNW was installing controls and processes to accrue costs incurred but not reported on vendor invoices. Had these processes been in place in June of 2018, this error would have been averted. We implemented a more rigorous accrual process and related controls in Q2 to ensure such expenses are captured and billed in the proper period. Anticipated Completion Date January, 2019
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on December 21, 2017. 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 June 21, 2018, which was (2983 days ago).
What is a management decision? →GSA_MIGRATION
GSA_MIGRATION
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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