JAPANESE GARDEN SOCIETY OF OREGONNon-Profit

Finding number: 2021-001 Finding type: Federal award finding Federal Assistance Listing No.: 59.075 Program name: COVID-19 ? Shuttered Venue Operators Grant (SVOG) Program Federal agency: U.S. Small Business Administration Pass-through entity: n/a Grant number: n/a Federal award year: 2021 Control deficiency type: Material weakness over compliance Instance of noncompliance: No Compliance requirements: Allowable costs Questioned costs: None Repeat finding: No Criteria: The Code of Federal Regulations (CFR) Section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The organization should have controls to ensure that costs charged to federal awards comply with the cost principles contained in Subpart E ? Cost Principles (2 CFR 200.400). Condition: While the Society had more than sufficient qualifying costs in excess of the federal award amount, fundraising payroll costs were coded to the federal award. Fundraising costs are not an allowable use of SVOG funds and is further prohibited in line with 2 CFR 200.442. Cause: The Society did not have policies and procedures over cost principles establishing allowability or unallowability of certain items of costs in accordance with 2 CFR sections 200.420 through 200.476. Effect: Noncompliance such as unallowable costs charged to the federal award could occur and not be detected or corrected. Audit Recommendation: We recommend that management implement procedures over the administration of federal awards, including establishing written policies and procedures to ensure compliance with Uniform Guidance cost principles. Management?s Response: The initial draft of our written policies and procedures over cost principles establishing allowability or unallowability of certain costs in accordance with 2 CFR sections 200.420 through 200.476 is in progress and will be completed by July 31, 2022, with the final copy to be in place by August 31, 2022. This will ensure that no unallowable costs could be inadvertently charged to a federal award in the future, and, combined with a review of all charged costs being done by a staff member who is independent of the award tracking and reporting, will ensure compliance with Uniform Guidance cost principles.

Finding number: 2020-001 Finding type: Federal award finding Federal Assistance Listing No.: 21.019 Program name: COVID-19 ? Coronavirus Relief Fund Federal agency: Department of the Treasury Pass-through entity: Oregon Cultural Trust Grant number: OCTM21055 Federal award year: 2020 Control deficiency type: Significant deficiency over compliance Instance of noncompliance: Yes Compliance requirements: Allowable activities /Allowable costs and Reporting Questioned costs: None Repeat finding: No Criteria: The Code of Federal Regulations(CFR) Section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During our audit, we noted the Society?s lack of proper internal controls over the costs requested from the Coronavirus Relief Fund (CRF) grant to cover expenditures. The Society requested CRF to cover expenditures not actually incurred but to cover expenditures that it would have incurred had it not lost earned revenues. Cause: Society staff misunderstood what costs can be covered by the CRF grant, although it had consulted with the pass-through entity. Also, the request for funds from the CRF grant was not reviewed by another independent person. Effect: Noncompliance such as unallowable costs charged to the federal award or requested in excess of allow-able costs could occur and not be detected or corrected. In addition, the misunderstanding resulted in the Society submitting a final report to the pass-through entity with amounts representing reductions in expenditures related to the COVID-19 pandemic, rather than actual costs incurred. The Society was able to perform an after-the-fact analysis to support adequate allowable costs chargeable to the CRF grant. Subsequently, an amended and corrected report was submitted to the pass-through entity. Audit Recommendation: We recommend that management implement procedures over the administration of federal awards, including establishing a proper review and approval of requests of federal awards. We also recommend that all federal awards are reviewed upon receipt for compliance requirements by more than one staff member with the appropriate training and experience. Management?s Response: The Japanese Garden Society of Oregon will develop and implement a process to review all direct and pass-through awards for compliance requirements, determine and assess procedures to meet those compliance requirements, and establish review procedures to be performed by an individual independent of those assigned to meet the compliance requirements. Upon receipt, all Federal awards, and their compliance requirements, will be reviewed by a member of the Development Department, as well as a member of the Finance Department.