Progress House Inc.

Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: Sacramento County Category of Finding: Allowable Cost/Cost Principles Federal-Pass through Grantor: 7206000-23-136 AL No: 93.778 Finding: The audit identified noncompliance by the nonprofit organization regarding the requirements stipulated in OMB Circular A-133. This OMB mandates that federal awards must be accounted for and reported separately from other funds. Notably, the organization's current practice involves allocating multiple funding sources to the facilities it operates without ensuring the necessary segregation of federal awards. Furthermore, the audit identified that the auditee did not provide adequate written policies, procedures, and standards of conduct in accordance with the federal regulations (2 CFR 200, Subparts D and E). Cause: The nonprofit organization did not have adequate controls in place to ensure that federal awards were tracked and accounted for separately from other funds. There was a lack of communication and coordination among the different departments responsible for tracking and reporting federal awards. Effect: The failure to account for federal awards separately from other funds could result in the organization inadvertently using federal funds for purposes that are not allowed or in violation of federal regulations. It could also lead to difficulties in properly reporting and accounting for the use of federal awards, which could result in audit findings or compliance issues. Criteria: The Organization should ensure that its practices align with the requirements stated in OMB Circular A-133. Questioned costs – Unknown Repeat finding - Yes Recommendation: The organization should promptly develop, document, and implement the required policies and procedures in accordance with 2 CFR 200. The nonprofit organization should establish and implement effective controls to ensure that federal awards are tracked and accounted for separately from other funds, in accordance with the requirements of OMB Circular A-133. This could include designating a specific account or accounts for federal awards, ensuring that federal awards are coded and tracked separately in the organization's accounting system, and implementing regular reconciliations to ensure that federal awards are properly accounted for. Additionally, the organization should provide training to staff members responsible for handling federal awards to ensure that they are aware of the requirements for tracking and accounting for federal awards separately. Finally, the organization should conduct regular reviews and monitoring of its financial management processes to ensure that federal awards are being used in compliance with all applicable laws and regulations, including proper segregation and allocation of indirect costs.

Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: Sacramento County Category of Finding: Allowable Cost/Cost Principles Federal-Pass through Grantor: 7206000-23-136 AL No: 93.778 Finding: The audit identified that the non-profit organization had delinquent payroll taxes, which were paid after the due date during the next fiscal year. Cause: The Organization did not have adequate controls in place to ensure timely payment of payroll taxes. This could be due to a lack of internal controls, poor communication among departments, or other factors that contributed to delays in processing payroll tax payments. Effect: The failure to pay payroll taxes on time could result in penalties and interest being assessed by the Internal Revenue Service (IRS), which could result in a significant financial impact on the organization. Additionally, this could damage the organization's reputation and relationships with employees, vendors, and other stakeholders. Criteria: In accordance with IRS regulations, the failure to pay payroll taxes on time can result in violations of Internal Revenue Code (IRC) Section 6656. This section imposes penalties and interest on late or delinquent payroll tax payments. IRC Section 6672: Commonly referred to as the Trust Fund Recovery Penalty (TFRP), this section imposes personal liability on individuals, such as corporate officers or responsible parties, for willful failure to collect, account for, and pay withheld payroll taxes to the IRS. It holds individuals personally responsible for unpaid payroll taxes and allows the IRS to assess penalties and pursue collection actions against them. Questioned costs - $19,610 Repeat finding - Yes Recommendation: The non-profit organization should establish and implement effective controls to ensure timely payment of payroll taxes, including regular monitoring and reconciliations to ensure that all payroll taxes are paid on time. This could include designating specific staff members responsible for payroll tax payments, implementing regular reviews of payroll tax processes, and providing training to staff members responsible for payroll tax payments to ensure that they are aware of the requirements for timely payment of payroll taxes. Additionally, the organization should consider implementing automated payroll tax payment systems to streamline the process and improve accuracy and efficiency. Finally, the organization should ensure that it has adequate reserves and resources to cover any penalties or interest assessed by the IRS for late payment of payroll taxes.

Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: Sacramento County Category of Finding: Allowable Cost/Cost Principles Federal-Pass through Grantor: 7206000-23-136 AL No: 93.778 Finding: The audit identified that the auditee did not provide an accurate and complete Schedule of Expenditures of Federal Awards (SEFA) directly to the auditor, as required by OMB Circular A-133. Cause: The auditee did not have adequate controls in place to ensure that the SEFA was prepared and provided to the auditor accurately and in a timely manner. There was a lack of communication and coordination among the different departments responsible for tracking and reporting federal expenditures. Effect: The failure to provide an accurate and complete SEFA directly to the auditor could result in the auditor being unable to properly identify the federal programs subject to audit, potentially leading to audit findings or compliance issues. Additionally, this could result in delays in the audit process and additional time and effort required to complete the audit. Criteria: The auditee should comply with the requirements stated in OMB Circular A-133, which mandates the accurate and timely preparation and direct submission of the SEFA to the auditor. Questioned costs – Unknown Repeat finding - Yes Recommendation: The auditee should establish and implement a formal process for preparing and providing the SEFA directly to the auditor, in accordance with the requirements of OMB Circular A-133. This should include clear roles and responsibilities for each department involved in the process, as well as clear deadlines for recording and reconciling federal expenditures and preparing the SEFA. The auditee should also ensure that all required documentation is readily available and accessible to the staff members responsible for preparing the SEFA, and that any errors or discrepancies are promptly identified and corrected. Finally, the auditee should consider implementing automated tools and systems to streamline the SEFA preparation process and improve accuracy and efficiency, and should provide training to staff members responsible for preparing and providing the SEFA to ensure that they are aware of the requirements and procedures for complying with OMB Circular A-133.

Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: County of Yolo, Placer County, Advocates for Human Potential, Inc. Category of Finding: Allowable Cost/Cost Principles Federal-Pass through Grantor: 2020-2019-PHI01, HHS000025, 7438-CA-BHWD-PHI AL No: 93.959 Finding: The audit identified noncompliance by the nonprofit organization regarding the requirements stipulated in OMB Circular A-133, Section .225(b). This section mandates that federal awards must be accounted for and reported separately from other funds. Notably, the organization's current practice involves allocating multiple funding sources to the facilities it operates without ensuring the necessary segregation of federal awards. Cause: The nonprofit organization did not have adequate controls in place to ensure that federal awards were tracked and accounted for separately from other funds. There was a lack of communication and coordination among the different departments responsible for tracking and reporting federal awards. Effect: The failure to account for federal awards separately from other funds could result in the organization inadvertently using federal funds for purposes that are not allowed or in violation of federal regulations. It could also lead to difficulties in properly reporting and accounting for the use of federal awards, which could result in audit findings or compliance issues. Criteria: The Organization should ensure that its practices align with the requirements stated in OMB Circular A-133, Section .225(b), which mandates the separate accounting and reporting of federal awards. Questioned costs ? Unknown Repeat finding - No Recommendation: The nonprofit organization should establish and implement effective controls to ensure that federal awards are tracked and accounted for separately from other funds, in accordance with the requirements of OMB Circular A-133, Section .225(b). This could include designating a specific account or accounts for federal awards, ensuring that federal awards are coded and tracked separately in the organization's accounting system, and implementing regular reconciliations to ensure that federal awards are properly accounted for. Additionally, the organization should provide training to staff members responsible for handling federal awards to ensure that they are aware of the requirements for tracking and accounting for federal awards separately. Finally, the organization should conduct regular reviews and monitoring of its financial management processes to ensure that federal awards are being used in compliance with all applicable laws and regulations.

Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: County of Yolo, Placer County, Advocates for Human Potential, Inc. Category of Finding: Allowable Cost/Cost Principles Federal-Pass through Grantor: 2020-2019-PHI01, HHS000025, 7438-CA-BHWD-PHI AL No: 93.959 Finding: The audit identified that the non-profit organization had delinquent payroll taxes, which were paid after the due date during the next fiscal year. Cause: The Organization did not have adequate controls in place to ensure timely payment of payroll taxes. This could be due to a lack of internal controls, poor communication among departments, or other factors that contributed to delays in processing payroll tax payments. Effect: The failure to pay payroll taxes on time could result in penalties and interest being assessed by the Internal Revenue Service (IRS), which could result in a significant financial impact on the organization. Additionally, this could damage the organization's reputation and relationships with employees, vendors, and other stakeholders. Criteria: In accordance with IRS regulations, the failure to pay payroll taxes on time can result in violations of Internal Revenue Code (IRC) Section 6656. This section imposes penalties and interest on late or delinquent payroll tax payments. IRC Section 6672: Commonly referred to as the Trust Fund Recovery Penalty (TFRP), this section imposes personal liability on individuals, such as corporate officers or responsible parties, for willful failure to collect, account for, and pay withheld payroll taxes to the IRS. It holds individuals personally responsible for unpaid payroll taxes and allows the IRS to assess penalties and pursue collection actions against them. Questioned costs - $32,605 Repeat finding - No Recommendation: The non-profit organization should establish and implement effective controls to ensure timely payment of payroll taxes, including regular monitoring and reconciliations to ensure that all payroll taxes are paid on time. This could include designating specific staff members responsible for payroll tax payments, implementing regular reviews of payroll tax processes, and providing training to staff members responsible for payroll tax payments to ensure that they are aware of the requirements for timely payment of payroll taxes. Additionally, the organization should consider implementing automated payroll tax payment systems to streamline the process and improve accuracy and efficiency. Finally, the organization should ensure that it has adequate reserves and resources to cover any penalties or interest assessed by the IRS for late payment of payroll taxes.

Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: County of Yolo, Placer County, Advocates for Human Potential, Inc. Category of Finding: Allowable Cost/Cost Principles Federal-Pass through Grantor: 2020-2019-PHI01, HHS000025, 7438-CA-BHWD-PHI AL No: 93.959 Finding: The audit identified that the auditee did not provide an accurate and complete Schedule of Expenditures of Federal Awards (SEFA) directly to the auditor, as required by OMB Circular A-133, Section .310(b)(3). Cause: The auditee did not have adequate controls in place to ensure that the SEFA was prepared and provided to the auditor accurately and in a timely manner. There was a lack of communication and coordination among the different departments responsible for tracking and reporting federal expenditures. Effect: The failure to provide an accurate and complete SEFA directly to the auditor could result in the auditor being unable to properly identify the federal programs subject to audit, potentially leading to audit findings or compliance issues. Additionally, this could result in delays in the audit process and additional time and effort required to complete the audit. Criteria: The auditee should comply with the requirements stated in OMB Circular A-133, Section .310(b)(3), which mandates the accurate and timely preparation and direct submission of the SEFA to the auditor. Questioned costs ? Unknown Repeat finding - No Recommendation: The auditee should establish and implement a formal process for preparing and providing the SEFA directly to the auditor, in accordance with the requirements of OMB Circular A-133, Section .310(b)(3). This should include clear roles and responsibilities for each department involved in the process, as well as clear deadlines for recording and reconciling federal expenditures and preparing the SEFA. The auditee should also ensure that all required documentation is readily available and accessible to the staff members responsible for preparing the SEFA, and that any errors or discrepancies are promptly identified and corrected. Finally, the auditee should consider implementing automated tools and systems to streamline the SEFA preparation process and improve accuracy and efficiency, and should provide training to staff members responsible for preparing and providing the SEFA to ensure that they are aware of the requirements and procedures for complying with OMB Circular A-133, Section .310(b)(3).