TECHSOUP GLOBALNon-Profit

Criteria: 2 CFR section 200.303(a) The non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance with the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. These internal controls should be incompliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the Untied States of the ?internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: During our audit of payroll costs, we identified two employees where the individuals? wage charged to the grant was more than the incurred amount. As a result, the Organization overcharged the grant by $427. There was a separate instance where an individual?s wage charged to the grant was less than the amount incurred for $258. As a result, the net impact was an overcharge to the grant in the amount of $169. In all instances, the hourly rate data used for the payroll expense calculation did not agree to the personnel file. Cause: The Organization did not reconcile the hourly rates per the employees? personnel file to amounts being charged to the grant. Controls in place did not identify the error. Effect: Payroll costs charged to the grant may not be correct. Repeat finding: This is not a repeat finding. Recommendation: Management should implement a policy over their processes surrounding the payroll expense calculation, the allocation procedures, and reconcile of pay rates. This should include effective reviews by someone with the appropriate knowledge of allowable cost compliance requirements. Views of responsible officials and planned corrective actions: In light of these findings management will be moving oversight of budget related contract and grant management activities from Development staff to Finance staff. Also, as part of the month close process for contract and grant activities, monthly statements will be reconciled to the General Ledger to ensure accuracy. Management is working to implement these solutions prior to the end of the current fiscal year.

Finding 2019-003 ? Financial Close and Reporting ? Significant Deficiency Criteria: General ledger accounts should be reviewed in a timely manner. Further, external reports such as Form SF 425 and other grant reports should be reviewed before being submitted. Condition/Context: Reviews of reconciliations governments grants related to the accounting and reporting processes had no evidence of review for various selections, made so it was unclear when the reviews had taken place on a timely manner. Further, external reports, such as Form SF 425, were submitted without being reviewed. Cause: Management should implement policy over the review process. Effect: Not having general ledger accounts and reports being reviewed may cause untended errors to go unchecked or inaccurate reporting. Repeat finding: This is not a repeat finding. Recommendation: Management should implement a policy over their processes surrounding the accounting and reporting procedures to ensure that appropriate controls are in place. These should include effective reviews by someone with the appropriate knowledge of generally accepted accounting principles. Reconciliations should be prepared and reviewed timely for all general ledger accounts. Furthermore, evidence of review of reconciliations and journal entries should be documented by sign offs. Views of responsible officials and planned corrective actions: Although an existing member of the Finance Department is fully dedicated to reviewing and reconciling accounts related to grants (including government grants), the organization is also in the process of adding an additional full time staff member to the Finance Department which should allow for a more timely reconciliation of all the general ledger accounts in the organization. Historically almost all grant reports have been reviewed by multiple knowledgeable employees prior to submission, however, the organization is also in the process of establishing a more formal process where the VP of Finance or a member of the Development Department will review all grant reports (including Form SF 425) prior to submission.