Oregon ImpactNon-Profit

Finding 2024-001 - Use of federal program grant reimbursements to pay unallowed expenses. Federal Program Title: Highway Safety Cluster. Assistance Listing Numbers: 20.600; 20.616. Federal Agencies: National Highway Traffic Safety Administration Federal Highway Administration. Federal Award Numbers: As listed on Schedule of Expenditures of Federal Awards (SEFA). Grant Award Periods: Various. Compliance Requirement: Activities Allowed or Unallowed. Criteria: 2 CFR Part 200.400 is based on the recipient, in recognition of their unique combination of staff, facilities, and experience, are responsible for employing organization and management techniques necessary to ensure the proper and efficient administration of the Federal award that includes identifying the types of activities which are either specifically allowed or prohibited by federal statutes, regulations, and the terms and conditions of the federal award pertaining to the program. Oregon Department of Transportation grant funds shall be used solely for the Project activities describedin accord with the ODOT Grant Budget and Cost Sharing set forth in the Budget. Grantee agrees to use its best efforts to fully expend the Grant Funds for their stated purposes within the Grant Period, after which time all unspent award funds are no longer available for the project beyond the end of the Grant Period. Condition: At 6/30/24, the Organization's current assets are less than its current liabilities, resulting in a deficit in net assets. Analysis focused on the difference in Accounts Receivable (grant reimbursement requests to ODOT) and Accounts Payable (primarily payables to police agencies for ODOT program costs). These two account balances should closely correlate as the Organization bills ODOT for grant reimbursements based on program expense reimbursements submitted by the police agencies. Analysis found that the Organization has used grant reimbursements to pay unallowed (non-program) related expenses instead of satisfying the accounts payable obligations to the police agencies. Questioned Cost: Questioned costs totaled $101,958 which was calculated as the difference between Grants Receivable and Accounts Payable (police agency payables), less application of current cash balances that can be utilized to reduce payable obligations. Cause: The Organization experienced staff turnover and was unable to fill the vacant position, remaining staff absorbed the additional responsibilities which competed for their time performing program functions and administrative tasks. Insufficient time management for program and administrative functions resulted in staff incorrectly assessing vendor bills as unallowable program costs and/or omitting allowable program expenses from inclusion in program grant expense reimbursement requests. Correlated to time management, the Organization's Executive Director had to perform staff level program functions that were billed at their higher wage rate resulting in payroll costs in excess of budget costs that were disallowed for reimbursement. Effect: The Organization's failure to properly capture, classify, and request reimbursement for allowed program and incurring payroll costs more than budget strained operating cash flows used to satisfy its current liabilities. To maintain current operations, the Organization improperly used ODOT program grant cash reimbursements earmarked for police agency payables, and instead expended the funds on unallowed activities. This is in violation of the grant agreement which states, Grant Funds shall be used solely for the Project activities described in accord with the ODOT Grant Budget and Cost Sharing set forth in the Budget. Repeat Finding: Not applicable. Statistical Sampling: The Organization is in noncompliance with the Activities Allowed or Unallowed requirements which has been identified as a systemic matter affecting all programs administered under the Organization's Highway Safety Cluster program for the fiscal year under audit. Recommendation: The Organization should ensure that there is adequate staffing to conduct program and administrative activities without undue time constraints. Additionally, the Organization should increase management oversight of program expenses and reimbursement requests to ensure that activities allowed and unallowed are properly recorded and captured in its reporting. These changes will afford staff sufficient time to perform accounting functions with increased management oversight to help ensure that allowable activities are captured and charged cost to federal programs and unallowed activities will not be incurred.

Finding 2024-001 - Weakness in Controls over Accounting and Financial Reporting. Criteria: Management is responsible for establishing and maintaining effective internal control over financial reporting. Internal controls should allow management or employees in the normal course of performing their assigned functions to prevent or detect material misstatements in the financial reporting. Condition: At 6/30/2024 the organization’s current assets are less than its current liabilities, resulting in a deficit in net assets. Analysis focused on the difference between Accounts Receivable (grant reimbursement requests) and Accounts Payable (police agency payables.) These two account balances should closely correlate as the organization bills for grant reimbursements based on program expense reimbursements submitted by the police agencies. Analysis found a material weakness in the organization's controls over identifying and recording vendor bills that resulted in incorrectly omitting allowable costs from program grant expense reimbursement requests. Additionally, the Executive Director performed staff level program functions that were billed at their higher wage rate resulting in payroll costs in excess of allowed budget costs that were disallowed for reimbursement. Not properly identifying and requesting reimbursement for allowable program costs and incurring payroll costs in excess of allowed budgets has strained on the organization's operating cash flows resulting in deficits and delays in satisfying the accounts payable obligations to the police agencies for which reimbursed funds have been requested. Cause: The Organization experienced staff turnover and was unable to fill the vacant position; remaining staff absorbed the additional responsibilities which competed for their time performing program functions and administrative tasks. Insufficient time management for program and administrative functions resulted in staff incorrectly assessing vendor bills as unallowable program costs and/or omitting allowable program expenses from inclusion in program grant expense reimbursement requests. Correlated to lack of available staffing and insufficient time management, the Organization’s Executive Director performed staff level program functions that were billed at their higher wage rate resulting in payroll costs in excess of budget costs that were disallowed for reimbursement. Effect: The Organization’s failure to properly capture, classify, and request reimbursement for allowed program costs and incurring payroll costs more than allowed budgets strained operating cash flows used to satisfy its current liabilities. To maintain current operations, the Organization has delayed the payment of outstanding accounts payable to police agencies and instead expended these funds on current operational expenses. Recommendation: The Organization should ensure that there is adequate staffing to conduct program and administrative activities without undue time constraints. Additionally, the Organization should increase management oversight of program expenses and reimbursement requests to ensure they are properly recorded and captured in its reporting. These changes will afford staff sufficient time to perform accounting functions with increased management oversight to help ensure that allowable activities are captured and charged costs to federal programs and unallowed activities will not be incurred. Views of Responsible Officals and Planned Corrective Action: Janelle Lawrence, Executive Director. Date of Discussion: November 14, 2025. The Organization agrees with the recommendation. Planned Corrective Actions: To reduce misidentification of expenses for allowed activities, the Organization has implemented a dual-review process for all grant expenses to ensure that eligible costs are identified and submitted. Staff will also receive updated training on allowable expense categories to reduce misinterpretation. In monitoring payroll activities, the Organization has revised its grant payroll allocation process to ensure that duties performed under specific roles are billed at the appropriate rate. Future budgets will more clearly distinguish between roles and corresponding pay rates to prevent overages. All projects will undergo budget-to-expense reconciliation on a monthly basis to safeguard against missed claims and ensure that grant resources are maximized without exceeding allowable limits.

Finding 2024-001 - Use of federal program grant reimbursements to pay unallowed expenses. Federal Program Title: Highway Safety Cluster. Assistance Listing Numbers: 20.600; 20.616. Federal Agencies: National Highway Traffic Safety Administration Federal Highway Administration. Federal Award Numbers: As listed on Schedule of Expenditures of Federal Awards (SEFA). Grant Award Periods: Various. Compliance Requirement: Activities Allowed or Unallowed. Criteria: 2 CFR Part 200.400 is based on the recipient, in recognition of their unique combination of staff, facilities, and experience, are responsible for employing organization and management techniques necessary to ensure the proper and efficient administration of the Federal award that includes identifying the types of activities which are either specifically allowed or prohibited by federal statutes, regulations, and the terms and conditions of the federal award pertaining to the program. Oregon Department of Transportation grant funds shall be used solely for the Project activities describedin accord with the ODOT Grant Budget and Cost Sharing set forth in the Budget. Grantee agrees to use its best efforts to fully expend the Grant Funds for their stated purposes within the Grant Period, after which time all unspent award funds are no longer available for the project beyond the end of the Grant Period. Condition: At 6/30/24, the Organization's current assets are less than its current liabilities, resulting in a deficit in net assets. Analysis focused on the difference in Accounts Receivable (grant reimbursement requests to ODOT) and Accounts Payable (primarily payables to police agencies for ODOT program costs). These two account balances should closely correlate as the Organization bills ODOT for grant reimbursements based on program expense reimbursements submitted by the police agencies. Analysis found that the Organization has used grant reimbursements to pay unallowed (non-program) related expenses instead of satisfying the accounts payable obligations to the police agencies. Questioned Cost: Questioned costs totaled $101,958 which was calculated as the difference between Grants Receivable and Accounts Payable (police agency payables), less application of current cash balances that can be utilized to reduce payable obligations. Cause: The Organization experienced staff turnover and was unable to fill the vacant position, remaining staff absorbed the additional responsibilities which competed for their time performing program functions and administrative tasks. Insufficient time management for program and administrative functions resulted in staff incorrectly assessing vendor bills as unallowable program costs and/or omitting allowable program expenses from inclusion in program grant expense reimbursement requests. Correlated to time management, the Organization's Executive Director had to perform staff level program functions that were billed at their higher wage rate resulting in payroll costs in excess of budget costs that were disallowed for reimbursement. Effect: The Organization's failure to properly capture, classify, and request reimbursement for allowed program and incurring payroll costs more than budget strained operating cash flows used to satisfy its current liabilities. To maintain current operations, the Organization improperly used ODOT program grant cash reimbursements earmarked for police agency payables, and instead expended the funds on unallowed activities. This is in violation of the grant agreement which states, Grant Funds shall be used solely for the Project activities described in accord with the ODOT Grant Budget and Cost Sharing set forth in the Budget. Repeat Finding: Not applicable. Statistical Sampling: The Organization is in noncompliance with the Activities Allowed or Unallowed requirements which has been identified as a systemic matter affecting all programs administered under the Organization's Highway Safety Cluster program for the fiscal year under audit. Recommendation: The Organization should ensure that there is adequate staffing to conduct program and administrative activities without undue time constraints. Additionally, the Organization should increase management oversight of program expenses and reimbursement requests to ensure that activities allowed and unallowed are properly recorded and captured in its reporting. These changes will afford staff sufficient time to perform accounting functions with increased management oversight to help ensure that allowable activities are captured and charged cost to federal programs and unallowed activities will not be incurred.

Finding 2024-001 - Weakness in Controls over Accounting and Financial Reporting. Criteria: Management is responsible for establishing and maintaining effective internal control over financial reporting. Internal controls should allow management or employees in the normal course of performing their assigned functions to prevent or detect material misstatements in the financial reporting. Condition: At 6/30/2024 the organization’s current assets are less than its current liabilities, resulting in a deficit in net assets. Analysis focused on the difference between Accounts Receivable (grant reimbursement requests) and Accounts Payable (police agency payables.) These two account balances should closely correlate as the organization bills for grant reimbursements based on program expense reimbursements submitted by the police agencies. Analysis found a material weakness in the organization's controls over identifying and recording vendor bills that resulted in incorrectly omitting allowable costs from program grant expense reimbursement requests. Additionally, the Executive Director performed staff level program functions that were billed at their higher wage rate resulting in payroll costs in excess of allowed budget costs that were disallowed for reimbursement. Not properly identifying and requesting reimbursement for allowable program costs and incurring payroll costs in excess of allowed budgets has strained on the organization's operating cash flows resulting in deficits and delays in satisfying the accounts payable obligations to the police agencies for which reimbursed funds have been requested. Cause: The Organization experienced staff turnover and was unable to fill the vacant position; remaining staff absorbed the additional responsibilities which competed for their time performing program functions and administrative tasks. Insufficient time management for program and administrative functions resulted in staff incorrectly assessing vendor bills as unallowable program costs and/or omitting allowable program expenses from inclusion in program grant expense reimbursement requests. Correlated to lack of available staffing and insufficient time management, the Organization’s Executive Director performed staff level program functions that were billed at their higher wage rate resulting in payroll costs in excess of budget costs that were disallowed for reimbursement. Effect: The Organization’s failure to properly capture, classify, and request reimbursement for allowed program costs and incurring payroll costs more than allowed budgets strained operating cash flows used to satisfy its current liabilities. To maintain current operations, the Organization has delayed the payment of outstanding accounts payable to police agencies and instead expended these funds on current operational expenses. Recommendation: The Organization should ensure that there is adequate staffing to conduct program and administrative activities without undue time constraints. Additionally, the Organization should increase management oversight of program expenses and reimbursement requests to ensure they are properly recorded and captured in its reporting. These changes will afford staff sufficient time to perform accounting functions with increased management oversight to help ensure that allowable activities are captured and charged costs to federal programs and unallowed activities will not be incurred. Views of Responsible Officals and Planned Corrective Action: Janelle Lawrence, Executive Director. Date of Discussion: November 14, 2025. The Organization agrees with the recommendation. Planned Corrective Actions: To reduce misidentification of expenses for allowed activities, the Organization has implemented a dual-review process for all grant expenses to ensure that eligible costs are identified and submitted. Staff will also receive updated training on allowable expense categories to reduce misinterpretation. In monitoring payroll activities, the Organization has revised its grant payroll allocation process to ensure that duties performed under specific roles are billed at the appropriate rate. Future budgets will more clearly distinguish between roles and corresponding pay rates to prevent overages. All projects will undergo budget-to-expense reconciliation on a monthly basis to safeguard against missed claims and ensure that grant resources are maximized without exceeding allowable limits.