ATHENS ALLIANCE COALITION, INC.
(A Nonprofit Organization)
PROGRAM-SPECIFIC AUDIT OF US TREASURY CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS PROGRAM
For the Year Ended December 31, 2022
To the Board of Directors
Athens Alliance Coalition, Inc. Athens, Georgia
Report on the Audit of the Schedule of Expenditures of Federal Awards Opinion
We have audited the schedule of expenditures of federal awards for U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds Program – Cash Basis of Athens Alliance Coalition, Inc. for the year ended December 31, 2022, and the related notes (the schedule).
In our opinion, the accompanying schedule of expenditures of federal awards presents fairly, in all material respects, the expenditures of federal awards for U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds Program – Cash Basis of Athens Alliance Coalition, Inc, for the year ended December 31, 2022, in accordance with the cash basis of accounting described in Note 2 of the schedule.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Schedule section of our report. We are required to be independent of Athens Alliance Coalition, Inc. and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter—Basis of Accounting
We draw attention to Note 2 of the schedule, which describes the basis of accounting. The schedule is prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Schedule
Management is responsible for the preparation and fair presentation of the schedule in accordance with the cash basis of accounting described in Note 2 of the schedule, and for determining that the cash basis of accounting is an acceptable basis for the preparation of the schedule in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the schedule that is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibilities for the Audit of the Schedule
Our objectives are to obtain reasonable assurance about whether the schedule as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of certain internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in aggregate, they would influence the judgment made by a reasonable user based on the schedule.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the schedule, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the schedule
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Athens Alliance Coalition, Inc.’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the schedule
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated April 30, 2023, on our consideration of Athens Alliance Coalition’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters with respect to the schedule. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Athens Alliance Coalition Inc.’s internal control over financial reporting or on compliance with respect to the schedule. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Athens Alliance Coalition Inc.’s internal control over financial reporting and compliance with respect to the schedule.
Rushton,LLC Certified Public Accountants Gainesville, Georgia April 30, 2023ATHENS ALLIANCE COALITION, INC.
Schedule of Expenditures of Federal Awards - Cash Basis
For the year ended December 31, 2022
ATHENS ALLIANCE COALITION, INC.
Notes to Schedule of Expenditure of Federal Awards – Cash Basis
For the year ended December 31, 2022
NOTE 1 - GENERAL
Athens Alliance Coalition, Inc. (“AAC”) was established in 2016. The Athens Alliance Coalition, Inc. is a not-for-profit corporation, that operates the First Steps Homelessness Encampment, a homelessness facility that provides shelter and behavioral health services for the homeless population in Athens-Clarke County, Georgia.
Athens Alliance Coalition, Inc. was awarded subrecipient federal funds from the Unified Government of Athens-Clarke County, Georgia (“ACC”). The Unified Government of Athens-Clarke County, Georgia awarded funding to AAC from its American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds Program award received from the U.S. Department of the Treasury to commence and operate the First Steps Homelessness Encampment.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Athens Alliance Coalition, Inc., under programs for the federal government for the year ended December 31, 2022. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards (Uniform Guidance). Because this schedule presents only a selected portion of the operations of the Athens Alliance Coalition, Inc., it is not intended to and does not present the financial position, changes in net assets or cash flows of Athens Alliance Coalition, Inc.
Basis of Accounting
Expenditures are reported on the Schedule are reported on the cash basis of accounting, and accordingly, represent the total cash expended for the program. The schedule does not include transactions that would be included using the accrual basis of accounting contemplated by generally accepted accounting principles.
De Minimis Indirect Cost Rate
Athens Alliance Coalition, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
Payments to Subrecipients
For the current year, Athens Alliance Coalition, Inc. did not pass federal funds through to subrecipients.
Subsequent Events
The schedule and related disclosures include evaluations of events through April 30, 2023, which is the date the schedule was available to be issued.
ATHENS ALLIANCE COALITION, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the year ended December 31, 2022
1. SUMMARY OF THE AUDITORS RESULTS
A. Schedule of Expenditures of Federal Awards
Type of auditor’s report issued: Unmodified
Internal control over financial reporting: Material weakness(es) identified? Yes Significant deficiencies identified Not considered material weaknesses? Yes
Noncompliance material to the schedule of noted? Yes
B. Federal Awards
Internal control over major programs: Material weakness(es) identified? Yes Significant deficiencies identified not considered material weaknesses? Yes
Type of auditor’s report issued on compliance for the program: Unmodified
Any audit findings disclosed that are required to be reported in accordance with the Uniform Guidance? No
Identification of major programs:
21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Dollar threshold used to distinguish Between Type A and Type B programs: $750,000
Auditee qualified as low-risk auditee? No
2. FINANCIAL STATEMENT FINDINGS
A. Current Year Audit Findings
2022-001
Condition: The Organization’s financial structure lacks appropriate segregation of financial duties Adequate segregation of financial duties is not present among purchasing, receipting, and approval of financial transactions.
Criteria: § 200.303(a) requires non-federal entities to establish and maintain effective internal control over the federal awards 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. Segregation of employees’ duties is a common practice in an effective internal control structure. Segregation of duties is when specific employee functions related to important accounting areas (such as cash receipting and cash disbursements) are separated among different individuals to significantly reduce the risk that any one individual could intentionally or unintentionally misappropriate assets.
ATHENS ALLIANCE COALITION, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the year ended December 31, 2022
2. FINANCIAL STATEMENT FINDINGS, continued
2022-001, continued
Effect: Failure to implement and maintain adequate segregation of duties exposes the Organization to greater risk of noncompliance with federal awards requirements
Cause: The Chief Executive Officer initiates and approves all financial transactions without any oversight from the board of directors.
Recommendation: We recommend that the Organization implement an internal control policy to review and approve the Chief Executive Officer’s financial activity. The individual assigned to review and approve the Executive Director’s transactions should possess the financial acumen to review and approve financial transactions and identify any issues or concerns
Management Response: Management concurs with this finding. Management will immediately implement procedures to segregate financial duties to the extent possible with available resources.
2022-002
Condition: The Organization’s Chief Executive Officer utilizes a debit card for federal award program purchases Effectively, the Chief Executive Officer executes and authorizes his own purchases.
Criteria: § 200.303(a) requires non-federal entities to establish and maintain effective internal control over the federal awards 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. The duties of purchasing and approval should be segregated among several personnel or members of the board of directors. Segregation of employees’ duties is a common practice in an effective internal control structure.
Effect: Failure to maintain adequate segregation of duties exposes the assets of the Organization to greater risk of misappropriation and noncompliance with federal, state, and grant contract guidelines
Cause: The Chief Executive Officer utilizes a debit card for federal award program purchases.
Recommendation: We recommend the Executive Director immediately discontinue the use of the debit card.
Management Response: Management concurs with this finding. Management will immediately cease use of the debit card.
2022-003
Condition: The Organization’s procurement policy does not clearly describe and document the details required for adequate financial management of the Organization. For example, the policy does not explicitly state who has authority to execute and approve financial transactions such as payroll and check signing Inclusion of these elements are essential to an effective procurement policy.
ATHENS ALLIANCE COALITION, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the year ended December 31, 2022
2. FINANCIAL STATEMENT FINDINGS, continued
2022-003, continued
Criteria: § 200.318 requires non-federal entities to have and use documented procurement procedures § 200.320 outlines procurement methods required to make purchases in compliance within the federal guidelines At a minimum, an effective procurement policy should clearly outline who has the authority to execute and approve financial transactions such as payroll and check signing. Further, it should outline the threshold levels for execution and approval of financial transactions.
Effect: Failure to implement an adequate procurement policy exposes the assets of the Organization to greater risk of misappropriation and noncompliance with federal, state, and grant contract guidelines
Cause: The Organization’s procurement policy does not clearly outline who has the authority to execute and approve (including threshold levels) financial transactions
Recommendation: We recommend the Organization immediately update its procurement policy to explicitly state who has the authority to execute and approve financial transactions. The policy should include guidance on threshold levels for purchase amounts
Management Response: Management concurs with this finding. Management will implement a more robust procurement policy immediately.
2022-004
Condition: The Organization does not maintain supporting documentation for approved payrates in employee personnel files.
Criteria: § 200.303(a) requires non-federal entities to establish and maintain effective internal control over the federal awards 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. An effective internal control structure necessitates a formal policy that documents approved payrates in employee personnel files.
Effect: Failure to implement an adequate policy for documenting approved pay rates exposes the assets of the Organization to greater risk of misappropriation due to fraud.
Cause: The Organization has not implemented a policy to maintain supporting documents of approved payrates in employee personnel files.
Recommendation: At a minimum, the board of directors should approve pay rates for all employees yearly. Updated, approved payrates should be maintained in each employee’s personnel files or on an approved master list.
Management Response: Management concurs with this finding. Management will immediately implement a payroll policy that requires documentation of approved payrates in employee personnel files.
2022-005
Condition: During our audit procedures, we noted that monthly expenditure reports were not filed accurately or by the required deadline, the 5th day of the subsequent month.
ATHENS ALLIANCE COALITION, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the year ended December 31, 2022
2. FINANCIAL STATEMENT FINDINGS, continued
2022-005, continued
Criteria: The Organization’s contract with Athens-Clarke County, Georgia section 3.5.1.2 requires the Organization to complete and submit monthly detailed reports outlining expenditures by the 5th of each month.
Effect: Failure to file accurate monthly reports on time places the Organization in noncompliance with contract requirements.
Cause: The Organization did not file monthly expenditure reports on time. The reports submitted to were also incomplete and inaccurate.
Recommendation: We recommend the Organization immediately implement a policy that ensures accurate monthly expenditure reports are filed by the 5th of each month.
Management Response: Management concurs with this finding. Management will implement a policy to ensure accurate monthly expenditure reports are filed on time each month.
B. Prior Year Audit Findings Follow-Ups
None reported
3. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
U.S. Department of the Treasury Program Name: Coronavirus State and Local Fiscal Recovery Funds Program
CFDA 21.027
Passed through Athens-Clarke County, Georgia Pass through number SLFRP3907
Finding 2022-001 also applies to federal award audit requirements. See Section 2 of the schedule for details on this finding.
Finding 2022-002 also applies to federal award audit requirements. See Section 2 of the schedule for details on this finding.
Finding 2022-003 also applies to federal award audit requirements. See Section 2 of the schedule for details on this finding.
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Schedule
Performed in Accordance with Government Auditing Standards
To the Board of Directors Athens Alliance Coalition, Inc.
Athens, Georgia
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the schedule of expenditures of federal awards for U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds Program – Cash Basis of Athens Alliance Coalition, Inc. for the year ended December 31, 2022, and the related notes (the schedule) and have issued our report thereon dated April 30, 2023.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the schedule, we considered Athens Alliance Coalitions, Inc.’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the schedule, but not for the purpose of expressing an opinion on the effectiveness of Athens Alliance Coalitions, Inc.’s internal control. Accordingly, we do not express an opinion on the effectiveness of Athens Alliance Coalition, Inc.’s internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's schedule will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies described in the accompanying schedule of fundings and questioned costs as items 2022-001 through 2022-003 to be material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item 2022-004 to be significant deficiency.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Athens Alliance Coalitions, Inc.'s schedule is free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the schedule. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance or other matters that are required to be reported under
Government Auditing Standards and which is described in the accompanying schedule of findings and questioned costs as item 2022-005.
Athens Alliance Coalition Inc. ’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on Athens Alliance Coalitions, Inc.'s response to the findings identified in our audit and described in the accompanying schedule of findings and questioned costs. Athens Alliance Coalitions, Inc.'s response was not subjected to the other auditing procedures applied in the audit of the schedule and, accordingly, we express no opinion the response.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Rushton,LLC
Certified Public AccountantsGainesville,
April
Georgia 30, 2023Independent Auditor’s Report on Compliance for a Federal Program and Report on Internal Control over Compliance
To the Board of Directors
Athens Alliance Coalition, Inc. Athens, Georgia
Report on Compliance for U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds Program
Opinion on Compliance for U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds Program
We have audited the Athens Alliance Coalition, Inc.’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on its U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds Program for the year ended December 31, 2022.
In our opinion, Athens Alliance Coalition, Inc. complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds Program for the year ended December 31, 2022.
Basis for Opinion on U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of Athens Alliance Coalition, Inc. and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds Program. Our audit does not provide a legal determination of Athens Alliance Coalition, Inc.’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds Program
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on Athens Alliance Coalition, Inc.’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about Athens Alliance Coalition, Inc.’s compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding Athens Alliance Coalition, Inc.’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
Obtain an understanding of Athens Alliance Coalition, Inc.’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of Athens Alliance Coalition, Inc.’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control over Compliance
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be a material weaknesses or significant deficiency in internal control over compliance and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we did identify certain deficiencies in internal control over compliance that we consider to be material weaknesses.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected and corrected on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2022-001 through 2022-003 to be material weaknesses.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
Athens Alliance Coalition Inc. ’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on Athens Alliance Coalition Inc.’s response to the internal control over compliance findings identified in our compliance audit described in the accompanying schedule of findings and questioned costs. The Athens Alliance Coalition’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly we express no opinion on the responses.
Purpose of this Report
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Rushton,LLC
Certified Public Accountants
Gainesville, Georgia
April 30, 2023