Audit 289562

2021-001 - Procurement, Suspension and Debarment (Significant Deficiency) Condition: During our testwork over procurement, we noted that there were no procurement policy and payments made to vendors before checking suspension or debarment status on www.sam.gov. Criteria: Uniform Grant Guidance and 2 CFR Part 200 Subpart C and D: §200.213 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. These regulations 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. Cause: DSAL did not establish adequate internal controls and procedures and procurement policy to ensure and maintain documentation to show that vendors were not suspended, debarred, or otherwise excluded from participating in contracts that are funded through Federal awards. Effect: DSAL is not in compliance with Federal regulations related to the grant and this could put its funding in jeopardy or require DSAL to reimburse the program for improper grant distributions. Auditor's Recommendation: We recommend that DSAL establish a policy and implement procedures to ensure the suspension or debarment status of vendors before entering into contract or transactions funded through Federal grants. Management Response: Management agrees with the findings and has provided the accompanying corrective action plan. Estimated Completion Date: November 20, 2022 Responsible Party: Patrick Eiser - DSAL Operations Director

2021-002 - Activities Allowed or Unallowed (Material Weakness) Condition: During our testwork of the internal controls and compliance over the Activities Allowed and Unallowed process, we noted controls that were designed to ensure that JAG program related expenses were actually incurred were ineffective in certain circumstances. Criteria: The terms and conditions for participation in the JAG program specifies that the procurement activities of the DSAL should be meet the BSCC’s minimum requirements for a contract under the JAG Award and vendor doesn’t meet the minimum requirement under that the total amount of the contract exceeds the threshold of $5,000 per the BSCC administrative guide for an informal procurement and the contract predates the JAG Award and therefore does not fall within the performance period. Cause: The above finding was caused by the control and policy not being designed with sufficient precision and not following the BSCC’s administrative guide to ensure a detail level of review was conducted to identify whether the contracts did meet the BSCC’s minimum requirements for a contract and contract was made in the performance period under the JAG Award. Effect: The schedule of expenditure of federal awards is inappropriately stated as of June 30, 2021, because ineligible costs were charged to the program. Management Response: Management agrees with the findings and has provided the accompanying corrective action plan. Estimated Completion Date: November 20, 2022 Responsible party: Patrick Eiser - DSAL Operations Director

2021 - 003 - Compliance with Reporting Requirements of OMB –Single Audit - Material Weakness Condition: The SF-SAC Single Audit Data Collection Form for the year ended June 30, 2021, was not submitted to the Federal Audit Clearinghouse by the required deadline by DSAL. Criteria: Per Uniform Guidance 2 CFR 200, the single audit reporting package, and the data collection form (SF- SAC) must be submitted to the Federal Audit Clearinghouse within 30 calendar days after receipt of the auditor's report(s), or 9 months after the end of the audit period, whichever comes first. Cause: All required information required for the Single Audit was not available to complete within the required timeframe. Effect: Late filings with the Federal Clearinghouse affect the determination of DSAL being considered a “low risk auditee”pursuant to OMB guidance. Auditor's Recommendation: We recommend DSAL attempt to meet the annual filing requirements. Management's Response: Management agrees with the findings and has provided the accompanying corrective action plan. Estimated Completion Date: March 31, 2024 Responsible Party: Patrick Eiser - DSAL Operations Director

2021-001 - Procurement, Suspension and Debarment (Significant Deficiency) Condition: During our testwork over procurement, we noted that there were no procurement policy and payments made to vendors before checking suspension or debarment status on www.sam.gov. Criteria: Uniform Grant Guidance and 2 CFR Part 200 Subpart C and D: §200.213 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. These regulations 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. Cause: DSAL did not establish adequate internal controls and procedures and procurement policy to ensure and maintain documentation to show that vendors were not suspended, debarred, or otherwise excluded from participating in contracts that are funded through Federal awards. Effect: DSAL is not in compliance with Federal regulations related to the grant and this could put its funding in jeopardy or require DSAL to reimburse the program for improper grant distributions. Auditor's Recommendation: We recommend that DSAL establish a policy and implement procedures to ensure the suspension or debarment status of vendors before entering into contract or transactions funded through Federal grants. Management Response: Management agrees with the findings and has provided the accompanying corrective action plan. Estimated Completion Date: November 20, 2022 Responsible Party: Patrick Eiser - DSAL Operations Director

2021-002 - Activities Allowed or Unallowed (Material Weakness) Condition: During our testwork of the internal controls and compliance over the Activities Allowed and Unallowed process, we noted controls that were designed to ensure that JAG program related expenses were actually incurred were ineffective in certain circumstances. Criteria: The terms and conditions for participation in the JAG program specifies that the procurement activities of the DSAL should be meet the BSCC’s minimum requirements for a contract under the JAG Award and vendor doesn’t meet the minimum requirement under that the total amount of the contract exceeds the threshold of $5,000 per the BSCC administrative guide for an informal procurement and the contract predates the JAG Award and therefore does not fall within the performance period. Cause: The above finding was caused by the control and policy not being designed with sufficient precision and not following the BSCC’s administrative guide to ensure a detail level of review was conducted to identify whether the contracts did meet the BSCC’s minimum requirements for a contract and contract was made in the performance period under the JAG Award. Effect: The schedule of expenditure of federal awards is inappropriately stated as of June 30, 2021, because ineligible costs were charged to the program. Management Response: Management agrees with the findings and has provided the accompanying corrective action plan. Estimated Completion Date: November 20, 2022 Responsible party: Patrick Eiser - DSAL Operations Director

2021 - 003 - Compliance with Reporting Requirements of OMB –Single Audit - Material Weakness Condition: The SF-SAC Single Audit Data Collection Form for the year ended June 30, 2021, was not submitted to the Federal Audit Clearinghouse by the required deadline by DSAL. Criteria: Per Uniform Guidance 2 CFR 200, the single audit reporting package, and the data collection form (SF- SAC) must be submitted to the Federal Audit Clearinghouse within 30 calendar days after receipt of the auditor's report(s), or 9 months after the end of the audit period, whichever comes first. Cause: All required information required for the Single Audit was not available to complete within the required timeframe. Effect: Late filings with the Federal Clearinghouse affect the determination of DSAL being considered a “low risk auditee”pursuant to OMB guidance. Auditor's Recommendation: We recommend DSAL attempt to meet the annual filing requirements. Management's Response: Management agrees with the findings and has provided the accompanying corrective action plan. Estimated Completion Date: March 31, 2024 Responsible Party: Patrick Eiser - DSAL Operations Director