FAC Explorer

Audit 26278

FY End
2022-12-31
Total Expended
$838,000
Findings
4
Programs
1
Organization: Village of Honor (MI)
Year: 2022 Accepted: 2023-07-19
Auditor: Gabridge & CO

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
22113 2022-003 Material Weakness - I
22114 2022-004 - - P
598555 2022-003 Material Weakness - I
598556 2022-004 - - P

Programs

ALN Program Spent Major Findings
10.760 Water and Waste Disposal Systems for Rural Communities $838,000 Yes 2

Contacts

Name Title Type
KA8BGHWTJ8E5 Bill Ward Auditee
2313258432 Joe Verlin Auditor
No contacts on file

Notes to SEFA

Title: NOTE 3 - RECONCILIATION TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting, which is described in Note 1 to the Village's financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: For purposes of charging indirect costs to federal awards, the Village has not elected to use the 10 percent de minimis cost rate as permitted by ?200.414 of the Uniform Guidance. See page 45 of the .pdf for a reconcilation of federal awards from the basic financial statements to the Schedule.
Title: NOTE 4 - BALANCE OF GUARANTEED LOANS Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting, which is described in Note 1 to the Village's financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: For purposes of charging indirect costs to federal awards, the Village has not elected to use the 10 percent de minimis cost rate as permitted by ?200.414 of the Uniform Guidance. See page 45 of the .pdf for a summary of the balances of guaranteed loans.
Title: NOTE 1 - BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting, which is described in Note 1 to the Village's financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: For purposes of charging indirect costs to federal awards, the Village has not elected to use the 10 percent de minimis cost rate as permitted by ?200.414 of the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of the Village of Honor (the Village) under programs of 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 Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Village, it is not intended to and does not present the financial position, changes in net position or cash flows of the Village.The Villages reporting entity is defined in Note 1 of the Villages Audited Financial Statements.

Finding Details

Finding 2022-003
2022-003 - Controls over Suspension and Debarment Finding Type: Material Weakness over Federal Awards Programs: Water and Waste Disposal Systems for Rural Communities (Assistance Listing Number 10.760) Criteria: Per 2 CFR ? 200.214 Suspension and debarment: Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition/Finding: The Village had no controls in place, as required by the Uniform Guidance, to ensure that all parties that the Village enters into covered transactions with are eligible for participation in federal assistance programs or activities. However, during our testing, we found that all covered transactions entered into by the Village were with eligible parties. Cause: The Village did not have written policies and procedures over procurement, including suspension and debarment, as required by the Uniform Guidance. Effect: As a result of this condition, the Village had increased risk of inadvertently entering into a covered transaction with an ineligible party. Questioned Costs: No costs have been questioned as a result of this finding. Repeat Finding: No Recommendation: We recommend that the Village Council and management adopt, and follow, written policies and procedures (that conform with requirements of the Uniform Guidance) to ensure that future contracts are properly documented and awarded in a manner that documents that the Village verified all parties under covered transactions are eligible for participation in federal programs or activities. View of Responsible Officials (Corrective Action): See corrective action plan.
Finding 2022-004
2022-004 - Written Policies Required by the Uniform Grant Guidance Finding Type: Immaterial Noncompliance Programs: Water and Waste Disposal Systems for Rural Communities (Assistance Listing Number 10.760) Criteria: The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant awarded on or after December 26, 2014, to have written policies pertaining to allowability of costs charged to federal programs, controlled activities over allowable costs and allowable activities, cash management, financial management, procurement, compensation/payroll, travel costs, and relocation cost of employees (?200.300 - 328)). Condition/Finding: Although the Village has processes in place to cover these areas, the Village lacks formal written policies covering these areas. Cause: This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance. Effect: As a result of this condition, the Village did not fully comply with the Uniform Guidance applicable to the above noted grants. Questioned Costs: No costs have been questioned as a result of this finding. Repeat Finding: No Recommendation: We recommend that the Village ensures these policies are updated to conform with the Uniform Guidance as soon as practical, but no later than the end of fiscal year 2023. View of Responsible Officials (Corrective Action): See corrective action plan.
Finding 2022-003
2022-003 - Controls over Suspension and Debarment Finding Type: Material Weakness over Federal Awards Programs: Water and Waste Disposal Systems for Rural Communities (Assistance Listing Number 10.760) Criteria: Per 2 CFR ? 200.214 Suspension and debarment: Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition/Finding: The Village had no controls in place, as required by the Uniform Guidance, to ensure that all parties that the Village enters into covered transactions with are eligible for participation in federal assistance programs or activities. However, during our testing, we found that all covered transactions entered into by the Village were with eligible parties. Cause: The Village did not have written policies and procedures over procurement, including suspension and debarment, as required by the Uniform Guidance. Effect: As a result of this condition, the Village had increased risk of inadvertently entering into a covered transaction with an ineligible party. Questioned Costs: No costs have been questioned as a result of this finding. Repeat Finding: No Recommendation: We recommend that the Village Council and management adopt, and follow, written policies and procedures (that conform with requirements of the Uniform Guidance) to ensure that future contracts are properly documented and awarded in a manner that documents that the Village verified all parties under covered transactions are eligible for participation in federal programs or activities. View of Responsible Officials (Corrective Action): See corrective action plan.
Finding 2022-004
2022-004 - Written Policies Required by the Uniform Grant Guidance Finding Type: Immaterial Noncompliance Programs: Water and Waste Disposal Systems for Rural Communities (Assistance Listing Number 10.760) Criteria: The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant awarded on or after December 26, 2014, to have written policies pertaining to allowability of costs charged to federal programs, controlled activities over allowable costs and allowable activities, cash management, financial management, procurement, compensation/payroll, travel costs, and relocation cost of employees (?200.300 - 328)). Condition/Finding: Although the Village has processes in place to cover these areas, the Village lacks formal written policies covering these areas. Cause: This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance. Effect: As a result of this condition, the Village did not fully comply with the Uniform Guidance applicable to the above noted grants. Questioned Costs: No costs have been questioned as a result of this finding. Repeat Finding: No Recommendation: We recommend that the Village ensures these policies are updated to conform with the Uniform Guidance as soon as practical, but no later than the end of fiscal year 2023. View of Responsible Officials (Corrective Action): See corrective action plan.