2022-018: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553 and 10.555 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements.
Pursuant to Title 7 Agriculture Part 210 National School Lunch Program and Part 220 School Breakfast Program, state agencies are required to submit a report on school program operations (FNS-10) to Food and Nutrition Service (FNS) each month.
Condition: Membership enrollment amounts reported on the FNS-10 report were inaccurate.
Cause: The Nevada Department of Agriculture (NDA) did not have adequate internal controls to ensure accurate information was reported to the federal awarding agency.
Effect: Inaccurate information was reported to FNS.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of seven out of a population of 36 reports was selected for testing. The October 2021 FNS-10 report includes annual information (rather than monthly). Line 12b – Membership (Enrollment) of Public Schools was reported as 13. The actual enrollment supported by the underlying documentation of public schools was 22.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA enhance internal controls to ensure accurate information is reported to the federal awarding agency.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-019: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 6 out of a population of 54 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA implement internal controls to ensure subaward
information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-018: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553 and 10.555 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements.
Pursuant to Title 7 Agriculture Part 210 National School Lunch Program and Part 220 School Breakfast Program, state agencies are required to submit a report on school program operations (FNS-10) to Food and Nutrition Service (FNS) each month.
Condition: Membership enrollment amounts reported on the FNS-10 report were inaccurate.
Cause: The Nevada Department of Agriculture (NDA) did not have adequate internal controls to ensure accurate information was reported to the federal awarding agency.
Effect: Inaccurate information was reported to FNS.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of seven out of a population of 36 reports was selected for testing. The October 2021 FNS-10 report includes annual information (rather than monthly). Line 12b – Membership (Enrollment) of Public Schools was reported as 13. The actual enrollment supported by the underlying documentation of public schools was 22.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA enhance internal controls to ensure accurate information is reported to the federal awarding agency.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-019: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 6 out of a population of 54 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA implement internal controls to ensure subaward
information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-019: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 6 out of a population of 54 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA implement internal controls to ensure subaward
information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-019: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 6 out of a population of 54 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA implement internal controls to ensure subaward
information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-019: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 6 out of a population of 54 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA implement internal controls to ensure subaward
information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-022: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Department of Employment, Training, and Rehabilitation (DETR) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligation dates were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three out of a population of eight applicable subawards obligations during the year was selected for testing.:
Obligation dates were reported as October 1, 2021 for all three subawards rather than August 2, 2021 (two subawards) or September 22, 2021 (one subaward).
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Department of Employment, Training, and Rehabilitation agrees with this finding.
2022-023: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Subrecipient Monitoring
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement.
Condition: The assistance listing number was not identified at the time of disbursement.
Cause: The Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure the assistance listing number was communicated on each disbursement to a subrecipient.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 out of a population of 571 payments to subrecipients was selected for testing. DETR did not communicate the award’s assistance listing number at the time of disbursement for all 60 payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure the assistance listing number is communicated on each disbursement to a subrecipient.
Views of Responsible Officials: The Department of Employment, Training and Rehabilitation agrees with this finding.
2022-022: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Department of Employment, Training, and Rehabilitation (DETR) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligation dates were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three out of a population of eight applicable subawards obligations during the year was selected for testing.:
Obligation dates were reported as October 1, 2021 for all three subawards rather than August 2, 2021 (two subawards) or September 22, 2021 (one subaward).
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Department of Employment, Training, and Rehabilitation agrees with this finding.
2022-023: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Subrecipient Monitoring
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement.
Condition: The assistance listing number was not identified at the time of disbursement.
Cause: The Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure the assistance listing number was communicated on each disbursement to a subrecipient.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 out of a population of 571 payments to subrecipients was selected for testing. DETR did not communicate the award’s assistance listing number at the time of disbursement for all 60 payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure the assistance listing number is communicated on each disbursement to a subrecipient.
Views of Responsible Officials: The Department of Employment, Training and Rehabilitation agrees with this finding.
2022-022: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Department of Employment, Training, and Rehabilitation (DETR) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligation dates were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three out of a population of eight applicable subawards obligations during the year was selected for testing.:
Obligation dates were reported as October 1, 2021 for all three subawards rather than August 2, 2021 (two subawards) or September 22, 2021 (one subaward).
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Department of Employment, Training, and Rehabilitation agrees with this finding.
2022-023: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Subrecipient Monitoring
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement.
Condition: The assistance listing number was not identified at the time of disbursement.
Cause: The Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure the assistance listing number was communicated on each disbursement to a subrecipient.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 out of a population of 571 payments to subrecipients was selected for testing. DETR did not communicate the award’s assistance listing number at the time of disbursement for all 60 payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure the assistance listing number is communicated on each disbursement to a subrecipient.
Views of Responsible Officials: The Department of Employment, Training and Rehabilitation agrees with this finding.
2022-020: U.S. Department of Labor
Unemployment Insurance, 17.225
Reporting
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements.
The Nevada Department of Employment, Training and Rehabilitation (DETR) must submit the ETA 2112 UI Financial Transaction Summary as directed by the Employment & Training Administration Handbook. This report is a monthly summary of transactions, which account for all funds received in, passed through, or paid out of the state unemployment fund.
Condition: Amounts reported on the ETA 2112 were misreported by category (benefit type).
Cause: DETR did not have adequate internal controls to ensure benefit payments were appropriately categorized by type.
Effect: Inaccurate information was reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of four out of 12 monthly reports was selected for testing. Errors were noted on each of the four reports tested as follows:
Month Ended July 31, 2021
• Deposit and disbursement total variances of $29,400.
• Off-setting variances in specific benefits ranging from $1,069 to $522,826.
Month Ended August 31, 2021
• Off-setting variances in specific benefits ranging from $2,993 to $3,244,522.
Month Ended December 31, 2021
• Off-setting variances in specific benefits ranging from $4,785 to $373,125.
Month Ended April 30, 2022
• Off-setting variances in specific benefits ranging from $2,992 to $161,515.
Repeat Finding from Prior Year: Yes – prior year finding 2021-026.
Recommendation: We recommend the DETR enhance the internal controls to ensure benefit payments are appropriately categorized by type.
Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.
2022-021: U.S. Department of Labor
Unemployment Insurance, 17.225
Special Tests and Provisions – UI Benefit Payments
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards.
Criteria: State Workforce Agencies are required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is the quality control system designed to assess the accuracy of UI benefit payments and denied claims. The State’s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt and in-depth investigations to determine the degree of accuracy in the administration of the program. The requirements are promulgated in the ET Handbook No. 395 (Handbook).
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
State of Nevada, Department of Employment, Training and Rehabilitation, Manual of Operations, Chapter 7800, Part V, Section 7862 Supervisor Case Review states that the supervisor review is intended as a final check of information gathered and processed during the audit to ensure horizontal consistency, consistent and correct coding, and ensure all required elements are complete and included. Items/Areas of concern will be addressed to the investigator of the case and resolved prior to closing the case.
Department of Labor ET Handbook 395, Part VI, Section 11 Completion of Cases and Timely Data Entry states that a minimum of 70% of cases must be completed within 60 days of the week ending date of the batch, and 95% of cases must be completed within 90 days of the week ending batch; and a minimum of 98% of cases for the year must be completed within 120 days of the ending date of the calendar year.
Condition: Investigations performed by the BAM supervisor or senior investigator are not reviewed by someone other than the investigator. In addition, completion of cases and timely data entry requirements were not met.
Cause: The Nevada Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure appropriate segregation of duties on all BAM investigations and to ensure the timely data entry requirements were met.
Effect: Errors may occur in a BAM investigation that are not detected or may not be detected timely.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 completed BAM cases out of a population of 734 was selected for testing. The investigator and reviewer were the same person for 17 of the cases tested. In addition, a time lapse report of case completion was examined for paid claims accuracy. Of these investigations, 85.19% of the cases were completed within 90 days, rather than the 95% required. In addition, the total completion percentage was 92.12% complete, rather than the 98% completion required.
Repeat Finding from Prior Year: Yes – prior year finding 2021-028.
Recommendation: We recommend DETR implement internal controls to ensure appropriate segregation of duties on all BAM investigations and to ensure timeliness requirements are met.
Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.
2022-020: U.S. Department of Labor
Unemployment Insurance, 17.225
Reporting
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements.
The Nevada Department of Employment, Training and Rehabilitation (DETR) must submit the ETA 2112 UI Financial Transaction Summary as directed by the Employment & Training Administration Handbook. This report is a monthly summary of transactions, which account for all funds received in, passed through, or paid out of the state unemployment fund.
Condition: Amounts reported on the ETA 2112 were misreported by category (benefit type).
Cause: DETR did not have adequate internal controls to ensure benefit payments were appropriately categorized by type.
Effect: Inaccurate information was reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of four out of 12 monthly reports was selected for testing. Errors were noted on each of the four reports tested as follows:
Month Ended July 31, 2021
• Deposit and disbursement total variances of $29,400.
• Off-setting variances in specific benefits ranging from $1,069 to $522,826.
Month Ended August 31, 2021
• Off-setting variances in specific benefits ranging from $2,993 to $3,244,522.
Month Ended December 31, 2021
• Off-setting variances in specific benefits ranging from $4,785 to $373,125.
Month Ended April 30, 2022
• Off-setting variances in specific benefits ranging from $2,992 to $161,515.
Repeat Finding from Prior Year: Yes – prior year finding 2021-026.
Recommendation: We recommend the DETR enhance the internal controls to ensure benefit payments are appropriately categorized by type.
Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.
2022-021: U.S. Department of Labor
Unemployment Insurance, 17.225
Special Tests and Provisions – UI Benefit Payments
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards.
Criteria: State Workforce Agencies are required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is the quality control system designed to assess the accuracy of UI benefit payments and denied claims. The State’s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt and in-depth investigations to determine the degree of accuracy in the administration of the program. The requirements are promulgated in the ET Handbook No. 395 (Handbook).
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
State of Nevada, Department of Employment, Training and Rehabilitation, Manual of Operations, Chapter 7800, Part V, Section 7862 Supervisor Case Review states that the supervisor review is intended as a final check of information gathered and processed during the audit to ensure horizontal consistency, consistent and correct coding, and ensure all required elements are complete and included. Items/Areas of concern will be addressed to the investigator of the case and resolved prior to closing the case.
Department of Labor ET Handbook 395, Part VI, Section 11 Completion of Cases and Timely Data Entry states that a minimum of 70% of cases must be completed within 60 days of the week ending date of the batch, and 95% of cases must be completed within 90 days of the week ending batch; and a minimum of 98% of cases for the year must be completed within 120 days of the ending date of the calendar year.
Condition: Investigations performed by the BAM supervisor or senior investigator are not reviewed by someone other than the investigator. In addition, completion of cases and timely data entry requirements were not met.
Cause: The Nevada Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure appropriate segregation of duties on all BAM investigations and to ensure the timely data entry requirements were met.
Effect: Errors may occur in a BAM investigation that are not detected or may not be detected timely.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 completed BAM cases out of a population of 734 was selected for testing. The investigator and reviewer were the same person for 17 of the cases tested. In addition, a time lapse report of case completion was examined for paid claims accuracy. Of these investigations, 85.19% of the cases were completed within 90 days, rather than the 95% required. In addition, the total completion percentage was 92.12% complete, rather than the 98% completion required.
Repeat Finding from Prior Year: Yes – prior year finding 2021-028.
Recommendation: We recommend DETR implement internal controls to ensure appropriate segregation of duties on all BAM investigations and to ensure timeliness requirements are met.
Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.
2022-024: U.S. Department of the Treasury
Coronavirus Relief Fund, 21.019
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 21.019 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements.
The Nevada Governor’s Finance Office (GFO) must submit quarterly Financial Progress Reports that contain COVID-19 related costs incurred during the covered period to Treasury OIG. Critical information includes:
• The total amount of payments received from Treasury.
• The amount of funds received that were expended or obligated for each project or activity.
• A detailed list and a description of all projects or activities for which funds were expended or obligated.
• Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made that are greater than $50,000.
Condition: Some expenditures were not reported in the appropriate classification or by vendor.
Cause: GFO did not have adequate internal controls to ensure Financial Progress Reports were prepared in accordance with governing requirements.
Effect: Inaccurate information was reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two Financial Progress Reports from a population of four was selected for testing. Obligations for Direct Payments greater than $50,000 did not agree to underlying support. Transfers to other agencies within the State were reported as direct payments to the State of Nevada rather than reported by the vendor that those agencies expended funds to. In addition, payments to subrecipients were reported as direct payments to vendors rather than as a subrecipient payment.
The cumulative impact is as follows:
Reporting Period Ended December 31, 2021
For reporting category - direct payments > $50,000:
Obligations were reported as $371,850,696. However, supporting documentation showed obligations of $44,591,536. Of the $371,850,696 $327,259,160 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or an aggregate payment to an individual. Expenditures were reported as $4,297,856. However, we identified $4,109,950 in expenditures that were reported as a direct payment to other state agencies, counties, or cities. The $4,109,950 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or aggregate payment to an individual.
Reporting Period Ended June 30, 2022
For reporting category - direct payments > $50,000:
Obligations were reported as $33,920,290. However, we identified $7,773,744 in obligations that were reported as a direct payment to other state agencies, counties, or cities. The $7,773,744 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or aggregate payment to an individual.
Repeat Finding from Prior Year: Yes – prior year finding 2021-030.
Recommendation: We recommend the GFO enhance internal controls to ensure Financial Progress Reports are prepared in accordance with governing requirements.
Views of Responsible Officials: The Nevada Governor’s Finance Office agrees with this finding.
2022-025: U.S. Department of the Treasury
Coronavirus Relief Fund, 21.019
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.019 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities communicate the award’s assistance listing number to the subrecipient at the time of disbursement.
Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable.
Condition: Assistance listing numbers were not communicated at disbursement and there was no evidence that subrecipient audit reports were monitored.
Cause: Adequate internal controls were not in place to ensure compliance with subrecipient monitoring requirements for the following agencies:
•Nevada Supreme Court
•Nevada Governor’s Finance Office
Effect: Noncompliance at the subrecipient level may occur and not be detected by the State.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 4 subrecipients out of a population of 18 across all State agencies was selected for testing. A nonstatistical sample of 12 pass-through payments out of a population of 56 was selected for testing.
The following errors were noted by agency:
Nevada Governor’s Finance Office
We tested four subrecipients and nine pass-through payments applicable to the Governors Finance Office. No documentation was available to provide that any of the four subrecipient audit reports had been monitored.
In addition, the assistance listing was not communicated at the time of disbursement for one pass-through payment tested. Nevada Supreme Court We tested three pass-through payments applicable to the Nevada Supreme Court. The assistance listing was not communicated at the time of disbursement for all three pass-through payments.
Repeat Finding from Prior Year: Yes – prior year finding 2021-031.
Recommendation: We recommend the State agencies listed above enhance internal controls to ensure compliance with subrecipient monitoring requirements.
Views of Responsible Officials: The agencies listed above agree with this finding.
2022-026: U.S. Department of Treasury
Emergency Rental Assistance Program, 21.023
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 OMB Compliance Supplement provides that states are required to submit Federal Financial Reports (SF-425). In addition, states are required to submit Quarterly Reports for Emergency Rental Assistance as amended by the Consolidated Appropriations Act of 2021 (ERA1) and Emergency Rental Assistance from the American Rescue Plan Act (ERA2).
Condition: There was no review of the SF-425 reports or Quarterly Reports by an individual independent of the preparation of the reports.
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure reports are reviewed prior to submission.
Effect: Inaccurate information may be submitted to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two SF-425 reports out of a population of four and four Quarterly Reports out of a population of eight was selected for testing. There was no evidence of segregation of duties on any of the reports selected for testing.
Repeat Finding from Prior Year: No
Recommendation: We recommend NHD implement internal controls to ensure reports are reviewed prior to submission.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-027: U.S. Department of Treasury
Emergency Rental Assistance Program, 21.023
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements.
The OMB Compliance Supplement provides that all grantees must submit Quarterly Reports with reporting periods of one calendar quarter and several cumulative fields covering all activity from the date of award through the quarter close. The key line items are the cumulative amount obligated and the cumulative amount expended. These Quarterly Reports are required for expenditures of Emergency Rental Assistance as amended by the Consolidated Appropriations Act of 2021 (ERA1) and Emergency Rental Assistance from the American Rescue Plan Act (ERA2).
Condition: Quarterly Reports submitted for ERA2 were not prepared with the same underlying methodology as the ERA1 Quarterly Reports and adequate documentation was not available to support the inconsistent reporting.
Cause: The Nevada Housing Division (NHD) did not have adequate internal controls to ensure required reports were prepared consistently and with appropriate supporting documentation.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of four Quarterly Reports out of a population of eight was selected for testing. The December 31, 2021 and March 31, 2022 ERA 2 Quarterly Reports were supported by partial underlying information. However, the information reported (i.e., what constituted an obligation and an expenditure) was different than the ERA 1 Quarterly Reports for the same quarter ends. Supporting documentation was not available to describe why the deviation in reporting methodology took place for the same quarter ends.
Repeat Finding from Prior Year: Yes – prior year finding 2021-034.
Recommendation: We recommend NHD enhance internal controls to ensure the Quarterly Reports are prepared consistently and with appropriate supporting documentation.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-029: U.S. Department of Treasury
Homeowners Assistance Fund, 21.026
Cash Management
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 305(b)(1) states that pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized.
In accordance with Title 2 of U.S Code of Federal Regulation (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 305(b)(8) and section 305(b)(9), HAF participants must maintain advance payments of their Federal awards in interest-bearing accounts, except in cases specified by that provision of regulations. HAF participants may retain up to $500 in earned interest annually from the date Treasury disbursed HAF award funds to the HAF participant. Any additional interest earned must be remitted annually to the Department of Health and Human Services Payment Management System.
Condition: The Nevada Housing Division (NHD) did not adequately monitor cash drawdowns by their subrecipients to ensure that the time elapsing between transfer of federal funds to the subrecipient and their disbursement for the program purpose was minimized. NHD did not track interest earned on funds advanced by the Department of Treasury and did not remit NHD’s interest earned greater than $500.
Cause: NHD did not have internal controls to ensure time between disbursement of federal funds to the subrecipient and their disbursement for program purposes was minimized and to ensure interest was appropriately tracked and remitted in accordance with federal regulations.
Effect: An interest liability occurred due to cash advances not being spent as close as administratively feasible to when received and NHD’s interest was not remitted.
Questioned Costs: None
Context/Sampling: The entire population of two subrecipient payments were selected for testing. The subaward provided for an initial advance funding of $3,000,000 for initial program costs, which was advanced on September 16, 2021. A second payment was made on May 17, 2022 for $9,000,000 when the original $3,000,000 had not yet been spent.
Interest of $213,019 was earned on funds advanced to NHD for the year ended June 30, 2022 and was not remitted to the Department of Health and Human Services Payment Management System in accordance with federal regulations.
Repeat Finding from Prior Year: No
Recommendation: We recommend NHD implement internal controls to ensure time between disbursement of federal funds to the subrecipient and their disbursement for program purposes is minimized and to ensure interest is appropriately tracked and remitted.
Views of Responsible Officials: The Nevada Housing Division partially agrees with this finding.
2022-030: U.S. Department of Treasury
Homeowners Assistance Fund, 21.026
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 OMB Compliance Supplement requires that state homeowner assistance fund (HAF) participants submit a one-time interim report.
Condition: There was no evidence that the one-time interim report was reviewed by an individual separate from the preparer.
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure there was documented review of the one-time interim report.
Effect: Incorrect information may be submitted to the federal awarding agency.
Questioned Costs: None
Context/Sampling: We tested the entire population of one report submitted during the year.
Repeat Finding from Prior Year: No
Recommendation: We recommend NHD implement internal controls to ensure there is documented review of reports submitted to federal awarding agencies.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-031: U.S. Department of Treasury
Homeowners Assistance Fund, 21.026
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: We tested the entire population of one subaward obligated during the year. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NHD implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-032: U.S. Department of Health and Human Services
Homeowner Assistance Fund, 21.026
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Condition: Subawards and disbursements did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed.
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure compliance with subrecipient monitoring requirements.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NHD.
Questioned Costs: None
Context/Sampling: The entire population of one subrecipient was selected for testing, which included two payments. The subaward was missing required information, a risk assessment was not performed, and both payments were missing the assistance listing number.
Repeat Finding from Prior Year: No
Recommendation: We recommend NHD implement internal controls to ensure compliance with subrecipient monitoring requirements.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-033: U.S. Department of the Treasury
Coronavirus State and Local Fiscal Recovery Fund, 21.027
Allowable Activities
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that recipients may use funds for any eligible expenses subject to restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Treasury’s Interim Final Rule and Final Rule at 31 CFR sections 35.7 and 35.8, and Treasury’s FAQs.
The Final Rule provides that recipients may use funds to replace lost public sector revenue to provide government services to the extent of the reduction in revenue experienced due to the pandemic. The lost revenue calculation is described in the Final Rule and provides an illustrative example of the definition of general revenue within the census bureau classification structure of revenue in the FAQs.
Condition: Lost revenue was not calculated consistently in accordance with the Final Rule’s definition of general revenue.
Cause: The Nevada Governor’s Finance Office (GFO) did not have adequate internal controls to ensure the revenue loss calculation was prepared in accordance with governing requirements.
Effect: The maximum allowable expenditures to be spent on government services pursuant to lost public sector revenue was inaccurate.
Questioned Costs: None
Context/Sampling: Cumulative lost revenue, applicable to fiscal year 2022 was calculated for calendar years 2020 and 2021. We examined the calculation performed by GFO and noted general revenues that were improperly excluded (from the base years and calculated years). We reperformed the calculation and noted the following:
•We calculated a growth rate of 6.5% from the base years, whereas GFOused a growth rate of 5.2% (minimum rate allowable).
•For calendar year 2020, GFO determined revenue loss to be$1,086,485,000. We recalculated revenue loss using all generalrevenues and revenue loss was determined to be $2,058,142,958. Thiswas a variance of $971,657,958 where GFO was understated in thecalculation of lost revenue (which does not cause any unallowableexpenditures).
•For calendar year 2021, we and GFO both calculated lost revenue of $0,although the revenue comparisons were different based on therevenues and growth rate used.
Repeat Finding from Prior Year: No
Recommendation: We recommend GFO enhance internal controls to ensure the revenue loss calculation is prepared in accordance with the governing requirements.
Views of Responsible Officials: The Nevada Governor’s Finance Office agrees with this finding.
2022-034: U.S. Department of Treasury
Coronavirus State and Local Fiscal Recovery Fund, 21.027
Procurement, Suspension, and Debarment
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards.
Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred.
Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Procedures were not followed to verify if an entity was suspended or debarred before entering into a covered transaction.
Cause: The Nevada Governor’s Finance Office (GFO) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions or to ensure procedures were followed to verify an entity was not suspended or debarred prior to entering into a covered transaction.
The Nevada Housing Division (NHD) did not have adequate internal controls to ensure procedures were followed to verify subrecipients were not suspended or debarred prior to entering into a covered transaction.
Effect: Contractors may not be aware of required terms and conditions. A covered transaction may be entered into with an entity or subrecipient that is suspended or debarred.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 procurement transactions out of approximately 2,500 was selected for testing, including 12 contracts subject to Appendix II to Part 200. A nonstatistical sample of three subrecipients out of a population of six was selected for testing.
The following errors were noted by agency: Nevada Governor’s Finance Office Two of the contracts were missing certain applicable provisions. Suspension and debarment verification procedures were not performed for two vendors. Nevada Housing Division Suspension and debarment verification procedures were not performed for one subrecipient.
Repeat Finding from Prior Year: No
Recommendation: We recommend the State agencies listed above enhance internal controls to ensure all contracts under federal awards contain the applicable provisions and procedures are followed to ensure entities are not suspended or debarred prior to entering into covered transactions.
Views of Responsible Officials: The State of Nevada agrees with this finding.
2022-035: U.S. Department of the Treasury
Coronavirus State and Local Fiscal Recovery Fund, 21.027
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward and the assistance listing number is communicated at the time of disbursement to subrecipients.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes.
Condition: Subawards did not contain all the required information, assistance listing numbers were not communicated at the time of disbursement, an evaluation of each subrecipients risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed and monitoring procedures were not performed.
Cause: Adequate internal controls were not in place to ensure compliance with subrecipient monitoring requirements for the following agencies:
•Nevada Governor’s Finance Office
•Nevada Housing Division
Effect: Noncompliance at the subrecipient level may occur and not be detected by the State.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subrecipients out of a population of six across all State agencies was selected for testing. A nonstatistical sample of five pass-through payments out of a population of 20 was selected for testing.
The following errors were noted by agency:
Nevada Governor’s Finance Office
We tested 5 pass-through payments applicable to the Nevada Governor’s Finance Office. The assistance listing was not communicated at the time of disbursement for all pass-through payments tested.
Nevada Housing Division
We tested one subrecipient applicable to the Nevada Housing Division. A risk assessment was not performed, the subaward was missing required information and no monitoring procedures were performed as necessary to ensure the subaward was used for authorized purposes.
Repeat Finding from Prior Year: No
Recommendation: We recommend the State agencies listed above enhance internal controls to ensure compliance with subrecipient monitoring requirements.
Views of Responsible Officials: The State of Nevada agrees with this finding.
2022-036: U.S. Department of Treasury
Coronavirus State and Local Fiscal Recovery Fund, 21.027
Other
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Governor’s Finance Office (GFO) did not have adequate internal controls to ensure payments to subrecipients were appropriately reported on the SEFA.
Effect: Prior to correction, amounts passed through to subrecipients on the SEFA were overstated by $332,407,747.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: No
Recommendation: We recommend GFO enhance internal controls to ensure payments to subrecipients are appropriately reported on the SEFA.
Views of Responsible Officials: The Governors Finance Office agrees with this finding.
2022-037: U.S. Department of Education
Title I Grants to Local Educational Agencies, 84.010
Matching, Level of Effort, and Earmarking
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Information the Nevada Department of Education (NDE) compiled to monitor local educational agency compliance with maintenance of effort requirements did not agree to underlying supporting documentation.
Cause: NDE did not have sufficient internal controls to ensure information included in the maintenance of effort monitoring document agreed to underlying documentation.
Effect: Noncompliance with maintenance of effort requirements may not be detected.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of five school districts and four charter schools out of a population of 17 school districts and 37 charter schools was selected for testing. Amounts included in the calculation for one school district and one charter school did not agree to underlying supporting documentation.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure information included in the maintenance of effort monitoring document agrees to underlying documentation.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-038: U.S. Department of Education
Title I Grants to Local Educational Agencies, 84.010
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies must submit their average state per pupil expenditure data to the National Center for Education Statistics (State Per Pupil Expenditure Report).
Condition: Formula errors in the State Per Pupil Expenditure Report resulted in amounts reported for certain pass-through dollars to be inaccurate.
Cause: The Nevada Department of Education (NDE) did not have internal controls to ensure the State Per Pupil Expenditure Report was completed accurately.
Effect: Inaccurate information was reported to the National Center for Education Statistics.
Questioned Costs: None
Context/Sampling: The State Per Pupil Expenditure Report for the year ended June 30, 2021 (submitted in August 2022) was selected for testing. There were no expenditures reported for “Object Code 970 pass-through dollars”; however, the actual amount was $2,408,320. This error had no effect on the final per pupil expenditure calculation.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure the State Per Pupil Expenditure Report is completed accurately.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-039: U.S. Department of Education
Title I Grants to Local Educational Agencies, 84.010
Reporting
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported timely in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have internal controls to ensure subaward information was submitted timely in accordance with the FFATA.
Effect: Subaward obligations were not reported timely in the FSRS.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of four out of a population of 17 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-036.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted timely in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-040: U.S. Department of Education
Title I Grants to Local Educational Agencies, 84.010
Special Tests and Provisions
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that a State Educational Agency (SEA) must apply section 4306(c) of the ESEA to calculate a hold-harmless base for the prior year that reflects the new or significantly expanded enrollment of the charter school local educational agency (LEA).
Condition: Documentation that the hold-harmless base for the prior year that reflects the new or significantly expanded enrollment of the charter school LEA was not maintained and thus not able to be tested.
Cause: The Nevada Department of Education (NDE) did not have internal controls to ensure appropriate documentation of the calculation of the hold-harmless base for the prior year that reflects the new or significantly expanded enrollment of the charter school LEA was maintained.
Effect: Noncompliance with section 4306(c) of the ESEA may have occurred and not be detected or corrected.
Questioned Costs: None
Context/Sampling: No information was maintained by NDE; therefore, testing was not able to be performed.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure appropriate documentation of compliance with section 4306(c) of the ESEA is maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-042: U.S. Department of Education
Education Stabilization Fund, 84.425
Earmarking
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects grant awards S425U210018 and S425W210029 included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides the following requirements:
• ESSER
o An SEA must allocate at least 90% of ESSER funds to LEAs using the statutorily prescribed formula.
• ARP ESSER
o Under section 2001(f) of the ARP act, each SEA must reserve: (1) at least 5% of ARP ESSER funds for evidence-based interventions that address the academic impact of lost instructional time; (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs.
• Allowances for Administrative Costs
o Under section 18001(e) of the CARES act and section 313(e) of the CRRSA act, an SEA may reserve up to 0.5% of it’s total ESSER I and ESSER II allocations for administrative cost.
o Under Section 2001(f)(4) of the ARP Act, an SEA may reserve not more than 0.5% of the state’s total ARP ESSER award for administrative costs.
o Under section 312(d)(5) of the CRRSA Act, an SEA may reserve up to 0.5% of it’s total allocation or up to $200,000, whichever is greater, to administer the EANS program.
Condition: The Nevada Department of Education (NDE) did not meet the earmarking set aside for evidence-based summer enrichment programs and evidence-based after school programs. In addition, there is no evidence that compliance with the earmarking requirements (i.e., actual amounts meeting the allocations or that there could be future changes to allocated amounts) is monitored.
Cause: NDE did not have adequate internal controls to ensure earmarking requirements were initially met and to ensure on-going compliance was monitored.
Effect: Earmarking requirements were not met and may not be met in the future.
Questioned Costs: None
Context/Sampling: We tested all earmarking computations required to be completed in State fiscal year 2022. There was no evidence monitoring of earmarking requirements.
Under section 2001(f) of the ARP act, each SEA must reserve: (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs.
•The minimum amount to allocate to evidence-based summerenrichment programs and evidence-based after school programs was$21,455,664 and the actual amount allocated was $20,040,662.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure earmarking requirements are initially met and implement internal controls to ensure on-going compliance is monitored.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-042: U.S. Department of Education
Education Stabilization Fund, 84.425
Earmarking
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects grant awards S425U210018 and S425W210029 included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides the following requirements:
• ESSER
o An SEA must allocate at least 90% of ESSER funds to LEAs using the statutorily prescribed formula.
• ARP ESSER
o Under section 2001(f) of the ARP act, each SEA must reserve: (1) at least 5% of ARP ESSER funds for evidence-based interventions that address the academic impact of lost instructional time; (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs.
• Allowances for Administrative Costs
o Under section 18001(e) of the CARES act and section 313(e) of the CRRSA act, an SEA may reserve up to 0.5% of it’s total ESSER I and ESSER II allocations for administrative cost.
o Under Section 2001(f)(4) of the ARP Act, an SEA may reserve not more than 0.5% of the state’s total ARP ESSER award for administrative costs.
o Under section 312(d)(5) of the CRRSA Act, an SEA may reserve up to 0.5% of it’s total allocation or up to $200,000, whichever is greater, to administer the EANS program.
Condition: The Nevada Department of Education (NDE) did not meet the earmarking set aside for evidence-based summer enrichment programs and evidence-based after school programs. In addition, there is no evidence that compliance with the earmarking requirements (i.e., actual amounts meeting the allocations or that there could be future changes to allocated amounts) is monitored.
Cause: NDE did not have adequate internal controls to ensure earmarking requirements were initially met and to ensure on-going compliance was monitored.
Effect: Earmarking requirements were not met and may not be met in the future.
Questioned Costs: None
Context/Sampling: We tested all earmarking computations required to be completed in State fiscal year 2022. There was no evidence monitoring of earmarking requirements.
Under section 2001(f) of the ARP act, each SEA must reserve: (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs.
•The minimum amount to allocate to evidence-based summerenrichment programs and evidence-based after school programs was$21,455,664 and the actual amount allocated was $20,040,662.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure earmarking requirements are initially met and implement internal controls to ensure on-going compliance is monitored.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-053: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. State agencies must submit the ACF-696, Child Care and Development Fund Financial Reports quarterly.
Condition: The Division of Welfare and Support Services (DWSS) did not maintain underlying documentation to support the amounts reported in the ACF-696 reports.
Cause: DWSS did not have internal controls to ensure the amounts reported were adequately documented and supported.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two quarterly reports out of a population of four submitted during the audit period were selected for testing. Reconciliations or other records of the underlying accounting system to the amounts reported were not retained by the Division for both reports selected for testing.
Therefore, we were unable to test the accuracy of the amounts reported in the ACFR-696 reports for the quarters ended September 30, 2021 and March 31, 2022.
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure the amounts reported are adequately documented and supported.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-054: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Division of Welfare Support Services (DWSS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subawards obligated during the year out of a population of eight was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-055: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed.
Cause: The Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure risk assessments were performed and subawards contained all required items.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subrecipients out of a population of eight was selected for testing. A risk assessment was not performed for one subrecipient and two subawards were missing communication of whether any research and
development activities were included.
Repeat Finding from Prior Year: Yes – prior year finding 2021-052.
Recommendation: We recommend DWSS enhance internal controls to ensure risk assessments are performed and subawards contain all required items.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-053: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. State agencies must submit the ACF-696, Child Care and Development Fund Financial Reports quarterly.
Condition: The Division of Welfare and Support Services (DWSS) did not maintain underlying documentation to support the amounts reported in the ACF-696 reports.
Cause: DWSS did not have internal controls to ensure the amounts reported were adequately documented and supported.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two quarterly reports out of a population of four submitted during the audit period were selected for testing. Reconciliations or other records of the underlying accounting system to the amounts reported were not retained by the Division for both reports selected for testing.
Therefore, we were unable to test the accuracy of the amounts reported in the ACFR-696 reports for the quarters ended September 30, 2021 and March 31, 2022.
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure the amounts reported are adequately documented and supported.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-054: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Division of Welfare Support Services (DWSS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subawards obligated during the year out of a population of eight was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-055: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed.
Cause: The Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure risk assessments were performed and subawards contained all required items.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subrecipients out of a population of eight was selected for testing. A risk assessment was not performed for one subrecipient and two subawards were missing communication of whether any research and
development activities were included.
Repeat Finding from Prior Year: Yes – prior year finding 2021-052.
Recommendation: We recommend DWSS enhance internal controls to ensure risk assessments are performed and subawards contain all required items.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-053: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. State agencies must submit the ACF-696, Child Care and Development Fund Financial Reports quarterly.
Condition: The Division of Welfare and Support Services (DWSS) did not maintain underlying documentation to support the amounts reported in the ACF-696 reports.
Cause: DWSS did not have internal controls to ensure the amounts reported were adequately documented and supported.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two quarterly reports out of a population of four submitted during the audit period were selected for testing. Reconciliations or other records of the underlying accounting system to the amounts reported were not retained by the Division for both reports selected for testing.
Therefore, we were unable to test the accuracy of the amounts reported in the ACFR-696 reports for the quarters ended September 30, 2021 and March 31, 2022.
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure the amounts reported are adequately documented and supported.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-054: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Division of Welfare Support Services (DWSS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subawards obligated during the year out of a population of eight was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-055: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed.
Cause: The Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure risk assessments were performed and subawards contained all required items.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subrecipients out of a population of eight was selected for testing. A risk assessment was not performed for one subrecipient and two subawards were missing communication of whether any research and
development activities were included.
Repeat Finding from Prior Year: Yes – prior year finding 2021-052.
Recommendation: We recommend DWSS enhance internal controls to ensure risk assessments are performed and subawards contain all required items.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-061: U.S. Department of Health and Human Services
Children’s Health Insurance Program (CHIP), 93.767
Medicaid Cluster:
State Medicaid Fraud Control Units, 93.775
State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777
Medical Assistance Program (Medicaid; Title XIX), 93.778
Eligibility
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.767 and 93.778 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 42 Public Health section 435.403 State Residence provides that the State must provide Medicaid to eligible residents of the State, including residents who are absent from the State, except in cases where another state has determined that the person is a resident there for purposes of Medicaid. The Medicaid State Plan provides that the State has an eligibility determination system for data matching through the Public Assistance Reporting Information System (PARIS). The information that is requested is to be exchanged with states and other entities legally entitled to verify Title XIX applications and individuals eligible for covered Title XIX services consistent with applicable PARIS agreements. The State will transmit and receive data quarterly (February, May, August, and November).
The State enrolls beneficiaries on a mandatory basis into managed care entities (managed care organizations and/or primary care case managers) in the absence of certain allowable waivers. The State contracts with managed care organizations and reimburses them for capitation payments.
Condition: PARIS data was not utilized by the Division of Health Care Financing and Policy (DHCFP) or the Division of Welfare and Supportive Services (DWSS) to monitor residency changes to determine when managed care benefits needed to be terminated because the beneficiary was a resident of another state for Medicaid purposes.
Cause: DHCFP and DWSS did not have internal controls in place to effectively communicate the PARIS data between the two agencies to ensure managed care benefits were terminated when appropriate.
Effect: Individuals are enrolled in Medicaid (and CHIP) plans in multiple states and benefits are not being terminated timely. Therefore, the State of Nevada is paying capitation payments to managed care organizations, when the benefits should have been terminated.
Questioned Costs: Projected questioned costs are $12,743,890 for Medicaid and $186,062 for CHIP.
Context/Sampling: No sampling was used. The PARIS data was obtained and examined in total. The PARIS data included 56,892 participants with dual enrollment. Of those 56,892 participants, 9,722 participants were enrolled in another state after the State of
Nevada. The projected questioned costs were estimated by performing the following:
• Identifying individuals who enrolled in another state after they had enrolled in Nevada (termination date for Nevada).
• Estimating a weighted average capitation payment based on demographics that determine the payment amount.
• Applying the weighted average capitation payments from the termination date through June 30, 2022 to determine the total projected questioned costs.
• The total projected questioned costs were then allocated between Medicaid and CHIP using participant counts in each plan between the ages of 0-18. Participants older than 18 were allocated to Medicaid. The allocated projected questioned costs were then multiplied by a weighted average Federal Medical Assistance Percentage (FMAP) to determine the final projected federal questioned costs.
Repeat Finding from Prior Year: No
Recommendation: We recommend DHCFP and DWSS implement internal controls to effectively communicate the PARIS data between each other and to ensure managed care benefits are terminated when appropriate.
Views of Responsible Officials: The Division of Health Care Financing and Policy and the Division of Welfare and Supportive Services agrees with this finding.
2022-062: U.S. Department of Health and Human Services
Medicaid Cluster:
State Medicaid Fraud Control Units, 93.775
State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777
Medical Assistance Program (Medicaid; Title XIX), 93.778
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.778 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements.
The Nevada Division of Health Care Financing and Policy (DHCFP) is required to submit Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program (CMS-64) reports based on actual recorded expenditures (42 CFR 430.30).
Condition: Amounts reported on the CMS-64 were not supported by the underlying accounting information.
Cause: DHCFP did not have adequate internal controls to ensure CMS-64 reports were accurate or supporting documentation for reconciling items was maintained.
Effect: Inaccurate information may be reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two CMS-64 reports out of a population of four was selected for testing. DHCFP has manual adjustments to key line items within the CMS-64 from the general ledger. DHCFP did not maintain a record of any of the
manual adjustments and we were unable to verify whether the manual adjustment was appropriate. In total, there were $91,007,519 in manual adjustments in the December 31, 2021 CMS-64 report and $121,971,786 in the March 31, 2022 CMS-64 report that we were unable to verify.
Repeat Finding from Prior Year: Yes – prior year finding 2021-061.
Recommendation: We recommend DHCFP enhance internal controls to ensure CMS-64 reports are accurate and supporting documentation is maintained.
Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.
2022-050: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Reporting
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects grant award 2101NVLIEA on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements.
The Nevada Division of Welfare and Supportive Services (DWSS) is required to submit the LIHEAP Carryover and Reallotment Report each year, which indicates the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds.
Condition: The projected unobligated balance (carryover amount) did not agree to the underlying actual unobligated balance and there was no underlying documentation or support to support the variance.
Cause: DWSS did not have adequate internal controls to ensure the unobligated balance was adequately documented and supported.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: The one annual report submitted during the audit period was selected for testing. The projected regular block grant carryover amount was reported as $0 on January 12, 2022. The underlying account records supported a carryover
amount of $298,004 as of September 30, 2021. There was no documentation available to explain why the projected balance was different from the actual balance when the projected balance was reported at a later date.
Repeat Finding from Prior Year: Yes – prior year finding 2021-048.
Recommendation: We recommend DWSS enhance internal controls to ensure the projected unobligated balance is adequately documented and supported.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-047: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Cash Management
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: A reimbursement request was not reviewed and approved by an individual independent of the preparation of the request.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure all reimbursement requests were reviewed and approved in accordance with the Division’s internal control policy.
Effect: Inaccurate reimbursement requests may occur and not detected by DWSS timely.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 14 reimbursement requests out of a population of 68 was selected for testing. One reimbursement request did not have the evidence of review and approval in accordance with DWSS’s internal control policy.
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS enhance internal controls to ensure all reimbursement requests are reviewed and approved in accordance with the Division’s internal control policy.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive agrees with this finding.
2022-048: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Eligibility
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 Low-Income Home Energy Assistance State Plan (State Plan) provides for internal controls related to beneficiary case reviews, in part, as follows:
Supervisors are required to complete a set number of case reviews per worker per month to monitor staff performance. Trainees and staff with performance issues are subject to 100% review prior to the posting of benefits. The Program Manager reviews a subset of the review completed by the supervisors to ensure they are adequately identifying and addressing performance issues.
Condition: Supervisor case reviews were not performed in accordance with the State Plan.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure beneficiary case review policies were followed due to supervisory retirements in which the positions were not refilled
in a timely manner.
Effect: Inaccurate eligibility or benefit determinations may be established and not detected by DWSS.
Questioned Costs: None
Context/Sampling: We examined a listing of beneficiary case reviews performed for the entire year. A total of 20 non trainee reviews were performed out of approximately 396, and only two months out of the year were performed for trainee reviews that were
required to be performed in accordance with the State Plan.
Repeat Finding from Prior Year: Yes – prior year finding 2021-047.
Recommendation: We recommend DWSS enhance internal controls to ensure beneficiary case review policies are followed.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-049: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Eligibility
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: As provided by 42 USC 8624(b)(2), assistance may be provided to:
• Households in which one or more individuals are receiving Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP) benefits, or certain needs-tested veterans’ benefits or;
• Households with incomes which do not exceed the greater of 150% of the State’s established poverty level, or 60% of the State’s median income. Lower income eligibility criteria may be established, but no household may be excluded solely on the basis of income if the household income is less than 110% of the State’s poverty level. The Low-Income Home Energy Assistance State Plan (State Plan) establishes and describes assistance benefit levels, which provides for the calculation of a Fixed Annual Credit (FAC) and ultimately, the amount of assistance provided.
Condition: The amount of assistance to provide was not calculated correctly as it related to social security cost-of-living increases.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure the social security cost of living increases were appropriately adjusted in recipients’ income calculation.
Effect: The recipient was entitled to more assistance than calculated.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 recipients out of a population of approximately 18,865 was selected for testing. We noted an error in the amount of income used in the calculation of benefits for two recipients. The sample totaled $53,854 in benefits paid and the error was $11.85.
Repeat Finding from Prior Year: Yes – prior year finding 2021-046.
Recommendation: We recommend DWSS enhance internal controls to ensure the social security cost of living increases are appropriately adjusted in the recipients’ income calculation.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-051: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: We tested the entire population of 4 subawards obligated during the year. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-050.
Recommendation: We recommend NHD implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-052: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable.
Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, and subrecipients were not monitored to ensure audits required by Uniform Guidance were performed.
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure compliance with subrecipient monitoring requirements.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two subrecipients out of a population of four was selected for testing. A risk assessment was not performed and the subawards were missing required information for both subrecipients. In addition, there was
no documentation available to demonstrate that the two subrecipients were monitored to ensure Uniform Guidance audits were obtained, if required, or that management decisions were issued, if applicable.
Repeat Finding from Prior Year: Yes – prior year finding 2021-051.
Recommendation: We recommend the NHD implement internal controls to ensure compliance with subrecipient monitoring requirements.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-047: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Cash Management
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: A reimbursement request was not reviewed and approved by an individual independent of the preparation of the request.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure all reimbursement requests were reviewed and approved in accordance with the Division’s internal control policy.
Effect: Inaccurate reimbursement requests may occur and not detected by DWSS timely.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 14 reimbursement requests out of a population of 68 was selected for testing. One reimbursement request did not have the evidence of review and approval in accordance with DWSS’s internal control policy.
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS enhance internal controls to ensure all reimbursement requests are reviewed and approved in accordance with the Division’s internal control policy.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive agrees with this finding.
2022-048: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Eligibility
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 Low-Income Home Energy Assistance State Plan (State Plan) provides for internal controls related to beneficiary case reviews, in part, as follows:
Supervisors are required to complete a set number of case reviews per worker per month to monitor staff performance. Trainees and staff with performance issues are subject to 100% review prior to the posting of benefits. The Program Manager reviews a subset of the review completed by the supervisors to ensure they are adequately identifying and addressing performance issues.
Condition: Supervisor case reviews were not performed in accordance with the State Plan.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure beneficiary case review policies were followed due to supervisory retirements in which the positions were not refilled
in a timely manner.
Effect: Inaccurate eligibility or benefit determinations may be established and not detected by DWSS.
Questioned Costs: None
Context/Sampling: We examined a listing of beneficiary case reviews performed for the entire year. A total of 20 non trainee reviews were performed out of approximately 396, and only two months out of the year were performed for trainee reviews that were
required to be performed in accordance with the State Plan.
Repeat Finding from Prior Year: Yes – prior year finding 2021-047.
Recommendation: We recommend DWSS enhance internal controls to ensure beneficiary case review policies are followed.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-049: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Eligibility
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: As provided by 42 USC 8624(b)(2), assistance may be provided to:
• Households in which one or more individuals are receiving Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP) benefits, or certain needs-tested veterans’ benefits or;
• Households with incomes which do not exceed the greater of 150% of the State’s established poverty level, or 60% of the State’s median income. Lower income eligibility criteria may be established, but no household may be excluded solely on the basis of income if the household income is less than 110% of the State’s poverty level. The Low-Income Home Energy Assistance State Plan (State Plan) establishes and describes assistance benefit levels, which provides for the calculation of a Fixed Annual Credit (FAC) and ultimately, the amount of assistance provided.
Condition: The amount of assistance to provide was not calculated correctly as it related to social security cost-of-living increases.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure the social security cost of living increases were appropriately adjusted in recipients’ income calculation.
Effect: The recipient was entitled to more assistance than calculated.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 recipients out of a population of approximately 18,865 was selected for testing. We noted an error in the amount of income used in the calculation of benefits for two recipients. The sample totaled $53,854 in benefits paid and the error was $11.85.
Repeat Finding from Prior Year: Yes – prior year finding 2021-046.
Recommendation: We recommend DWSS enhance internal controls to ensure the social security cost of living increases are appropriately adjusted in the recipients’ income calculation.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-051: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: We tested the entire population of 4 subawards obligated during the year. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-050.
Recommendation: We recommend NHD implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-052: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable.
Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, and subrecipients were not monitored to ensure audits required by Uniform Guidance were performed.
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure compliance with subrecipient monitoring requirements.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two subrecipients out of a population of four was selected for testing. A risk assessment was not performed and the subawards were missing required information for both subrecipients. In addition, there was
no documentation available to demonstrate that the two subrecipients were monitored to ensure Uniform Guidance audits were obtained, if required, or that management decisions were issued, if applicable.
Repeat Finding from Prior Year: Yes – prior year finding 2021-051.
Recommendation: We recommend the NHD implement internal controls to ensure compliance with subrecipient monitoring requirements.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-056: U.S. Department of Health and Human Services
Foster Care – Title IV-E, 93.658
Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.658 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides that a State must claim federal financial participation for costs associated with a program only in accordance with its approved cost allocation plan. Since cost allocation plans are of a narrative nature, the Federal government needs assurance that the cost allocation plan has been implemented as approved.
Condition: Allocation methods used in cost allocation did not agree to the approved cost allocation plan and allocation statistics did not agree to underlying support.
Cause: The Nevada Division of Child and Family Services (DCFS) did not have adequate internal controls to ensure costs were allocated accurately and in accordance with the cost allocation plan.
Effect: Costs may be charged to the federal programs that do not agree to the cost allocation plan.
Questioned Costs: None as known and projected costs are less than $25,000.
Context/Sampling: A nonstatistical sample of two out of four quarters was selected for testing. One allocation method did not agree to the submitted cost allocation plan for the March 31, 2022. In addition, one allocation statistic included an error that
impacted the allocation percentages by 0.32% for one allocation method in the March 31, 2022 cost allocation.
Repeat Finding from Prior Year: Yes – prior year finding 2021-054.
Recommendation: We recommend DCFS enhance internal controls to ensure costs are allocated accurately and in accordance with the cost allocation plan.
Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.
2022-057: U.S. Department of Health and Human Services
Foster Care – Title IV-E, 93.658
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.658 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Division of Child and Family Services (DCFS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: We tested the entire population of two subawards obligated during the year. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-055.
Recommendation: We recommend DCFS implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.
2022-058: U.S. Department of Health and Human Services
Foster Care – Title IVE-E, 93.658
Subrecipient Monitoring
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 93.658 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement.
Condition: The assistance listing number was not identified at the time of disbursement.
Cause: The Division of Child and Family Services (DCFS) did not have adequate internal controls to ensure the assistance listing number was communicated on each disbursement to a subrecipient.
Effect: Noncompliance at the subrecipient level may occur and not be detected by DCFS.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of four subrecipient payments out of a population of 31 was selected for testing. The assistance listing number was not communicated on one payment.
Repeat Finding from Prior Year: No
Recommendation: We recommend DCFS enhance internal controls to ensure the assistance listing number is communicated on each disbursement to a subrecipient.
Views of Responsible Officials: The Nevada Department of Child and Family Services agrees with this finding.
2022-059: U.S. Department of Health and Human Services
Children’s Health Insurance Program (CHIP), 93.767
Eligibility
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.767 on the Schedule of Expenditures of Federal Awards.
Criteria: States are required to determine eligibility in accordance with the eligibility requirements defined in the approved State plan (42 CFR 457). The State plan describes certain aid categories, including the eligibility criteria and potential benefits allowed under the aid categories for eligible individuals.
Condition: Individuals were deemed eligible but were placed in an incorrect aid category or did not have supporting documentation available for review.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure aid categories were accurate or applications for CHIP were maintained.
Effect: Individuals may receive benefits that they are not entitled to or not receive benefits for which they are entitled to.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 out of a population of 32,789 eligible participants was selected for testing. One individual had the incorrect aid code classified and two individuals did not have applications available for review.
Repeat Finding from Prior Year: Yes – prior year finding 2021-056.
Recommendation: We recommend DWSS enhance internal controls to ensure that aid categories are accurate and applications for CHIP are maintained.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-060: U.S. Department of Health and Human Services
Children’s Health Insurance Program (CHIP), 93.767
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.767 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements.
The Nevada Division of Health Care Financing and Policy (DHCFP) is required to submit Quarterly Children’s Health Insurance Program Statement Expenditures for Title XXI (CMS-21) reports based on actual recorded expenditures (Sections 2105(e) and 2107(b)(1) of Title XXI).
Condition: Amounts reported on the CMS-21 were not supported by the underlying accounting information.
Cause: DHCFP did not have adequate internal controls to ensure CMS-21 reports were accurate.
Effect: Inaccurate information was reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two CMS-21 reports out of a population of four was selected for testing. DHCFP was unable to provide support for one variance identified.
The December 31, 2021 CMS-21 report had the following unreconciled variance (Total Computable Column).
• Lines 1B/1D: $253 (less reported than general ledger support)
Repeat Finding from Prior Year: Yes – prior year finding 2021-057.
Recommendation: We recommend DHCFP enhance internal controls to ensure CMS-21 reports are accurate.
Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.
2022-061: U.S. Department of Health and Human Services
Children’s Health Insurance Program (CHIP), 93.767
Medicaid Cluster:
State Medicaid Fraud Control Units, 93.775
State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777
Medical Assistance Program (Medicaid; Title XIX), 93.778
Eligibility
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.767 and 93.778 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 42 Public Health section 435.403 State Residence provides that the State must provide Medicaid to eligible residents of the State, including residents who are absent from the State, except in cases where another state has determined that the person is a resident there for purposes of Medicaid. The Medicaid State Plan provides that the State has an eligibility determination system for data matching through the Public Assistance Reporting Information System (PARIS). The information that is requested is to be exchanged with states and other entities legally entitled to verify Title XIX applications and individuals eligible for covered Title XIX services consistent with applicable PARIS agreements. The State will transmit and receive data quarterly (February, May, August, and November).
The State enrolls beneficiaries on a mandatory basis into managed care entities (managed care organizations and/or primary care case managers) in the absence of certain allowable waivers. The State contracts with managed care organizations and reimburses them for capitation payments.
Condition: PARIS data was not utilized by the Division of Health Care Financing and Policy (DHCFP) or the Division of Welfare and Supportive Services (DWSS) to monitor residency changes to determine when managed care benefits needed to be terminated because the beneficiary was a resident of another state for Medicaid purposes.
Cause: DHCFP and DWSS did not have internal controls in place to effectively communicate the PARIS data between the two agencies to ensure managed care benefits were terminated when appropriate.
Effect: Individuals are enrolled in Medicaid (and CHIP) plans in multiple states and benefits are not being terminated timely. Therefore, the State of Nevada is paying capitation payments to managed care organizations, when the benefits should have been terminated.
Questioned Costs: Projected questioned costs are $12,743,890 for Medicaid and $186,062 for CHIP.
Context/Sampling: No sampling was used. The PARIS data was obtained and examined in total. The PARIS data included 56,892 participants with dual enrollment. Of those 56,892 participants, 9,722 participants were enrolled in another state after the State of
Nevada. The projected questioned costs were estimated by performing the following:
• Identifying individuals who enrolled in another state after they had enrolled in Nevada (termination date for Nevada).
• Estimating a weighted average capitation payment based on demographics that determine the payment amount.
• Applying the weighted average capitation payments from the termination date through June 30, 2022 to determine the total projected questioned costs.
• The total projected questioned costs were then allocated between Medicaid and CHIP using participant counts in each plan between the ages of 0-18. Participants older than 18 were allocated to Medicaid. The allocated projected questioned costs were then multiplied by a weighted average Federal Medical Assistance Percentage (FMAP) to determine the final projected federal questioned costs.
Repeat Finding from Prior Year: No
Recommendation: We recommend DHCFP and DWSS implement internal controls to effectively communicate the PARIS data between each other and to ensure managed care benefits are terminated when appropriate.
Views of Responsible Officials: The Division of Health Care Financing and Policy and the Division of Welfare and Supportive Services agrees with this finding.
2022-063: U.S. Department of Health and Human Services
Opioid STR, 93.788
Earmarking
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.788 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 grant agreements provide that no more than five percent of the total grant award may be used for administrative and infrastructure development costs. In addition, no more than two percent of the total grant award may be used for data collection and reporting.
Condition: The Nevada Division of Public and Behavioral Health (DPBH) did not have evidence of monitoring administrative, infrastructure development, data collection, and reporting costs to ensure they did not exceed the maximum allowable.
Cause: DPBH did not have internal controls to provide for the monitoring of earmarking requirements.
Effect: Costs may be expended above the maximum allowable.
Questioned Costs: None
Context/Sampling: No sampling was performed; earmarking requirements were tested in total. DPBH did not exceed the maximum allowable spending; however, there was no evidence that the earmarking requirement was actively monitored.
Repeat Finding from Prior Year: No
Recommendation: We recommend DPBH implement internal controls to provide for the monitoring of earmarking requirements.
Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.
2022-064: U.S. Department of Health and Human Services
Opioid STR, 93.788
Procurement, Suspension, and Debarment
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.788 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Non-Federal entities are prohibited from contracting with parties that are suspended or debarred under covered transactions.
Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Procedures were not followed to verify if an entity was suspended or debarred before entering into a covered transaction.
Cause: The Nevada Division of Public and Behavioral Health (DPBH) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions or to ensure procedures were followed to verify an entity was not suspended or debarred prior to entering into a covered transaction.
Effect: Contractors may not be aware of required terms and conditions. A covered transaction may be entered into with an entity that is suspended or debarred.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 procurement transactions out of a population of 263 was selected for testing, including 11 contracts subject to Appendix II to Part 200. Eight vendor contracts selected did not contained the applicable provisions required by Appendix II to Part 200 and of those eight, seven were missing procedures to verify the vendor was not suspended or debarred.
Repeat Finding from Prior Year: No
Recommendation: We recommend DPBH enhance internal controls to ensure all contracts under federal awards contain the applicable contract provisions and to ensure procedures are followed to verify an entity was not suspended or debarred prior
to entering into a covered transaction.
Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.
2022-065: U.S. Department of Health and Human Services
Opioid STR, 93.788
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.788 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 grant agreements require that award recipients submit an annual and a midyear Performance Progress Report (PPR).
Condition: The Nevada Division of Public and Behavioral Health (DPBH) did not maintain underlying documentation to support the amounts reported in annual and midyear PPRs.
Cause: DPBH did not have internal controls to maintain adequate document retention to support compliance with the reporting requirements.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: The annual performance report and the mid-year performance report submitted during the audit period were selected for testing. Support was not maintained to reconcile or verify the accuracy of the amounts reported to the federal awarding
agency for either report.
Repeat Finding from Prior Year: No
Recommendation: We recommend DPBH implement internal controls to maintain adequate document retention to support compliance with the reporting requirements.
Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.
2022-018: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553 and 10.555 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements.
Pursuant to Title 7 Agriculture Part 210 National School Lunch Program and Part 220 School Breakfast Program, state agencies are required to submit a report on school program operations (FNS-10) to Food and Nutrition Service (FNS) each month.
Condition: Membership enrollment amounts reported on the FNS-10 report were inaccurate.
Cause: The Nevada Department of Agriculture (NDA) did not have adequate internal controls to ensure accurate information was reported to the federal awarding agency.
Effect: Inaccurate information was reported to FNS.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of seven out of a population of 36 reports was selected for testing. The October 2021 FNS-10 report includes annual information (rather than monthly). Line 12b – Membership (Enrollment) of Public Schools was reported as 13. The actual enrollment supported by the underlying documentation of public schools was 22.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA enhance internal controls to ensure accurate information is reported to the federal awarding agency.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-019: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 6 out of a population of 54 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA implement internal controls to ensure subaward
information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-018: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553 and 10.555 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements.
Pursuant to Title 7 Agriculture Part 210 National School Lunch Program and Part 220 School Breakfast Program, state agencies are required to submit a report on school program operations (FNS-10) to Food and Nutrition Service (FNS) each month.
Condition: Membership enrollment amounts reported on the FNS-10 report were inaccurate.
Cause: The Nevada Department of Agriculture (NDA) did not have adequate internal controls to ensure accurate information was reported to the federal awarding agency.
Effect: Inaccurate information was reported to FNS.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of seven out of a population of 36 reports was selected for testing. The October 2021 FNS-10 report includes annual information (rather than monthly). Line 12b – Membership (Enrollment) of Public Schools was reported as 13. The actual enrollment supported by the underlying documentation of public schools was 22.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA enhance internal controls to ensure accurate information is reported to the federal awarding agency.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-019: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 6 out of a population of 54 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA implement internal controls to ensure subaward
information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-019: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 6 out of a population of 54 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA implement internal controls to ensure subaward
information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-019: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 6 out of a population of 54 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA implement internal controls to ensure subaward
information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-019: U.S. Department of Agriculture
Child Nutrition Cluster:
School Breakfast Program, 10.553
National School Lunch Program, 10.555
Special Milk Program for Children, 10.556
Summer Food Service Program for Children, 10.559
Fresh Fruit and Vegetable Program, 10.582
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 6 out of a population of 54 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NDA implement internal controls to ensure subaward
information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.
2022-022: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Department of Employment, Training, and Rehabilitation (DETR) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligation dates were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three out of a population of eight applicable subawards obligations during the year was selected for testing.:
Obligation dates were reported as October 1, 2021 for all three subawards rather than August 2, 2021 (two subawards) or September 22, 2021 (one subaward).
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Department of Employment, Training, and Rehabilitation agrees with this finding.
2022-023: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Subrecipient Monitoring
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement.
Condition: The assistance listing number was not identified at the time of disbursement.
Cause: The Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure the assistance listing number was communicated on each disbursement to a subrecipient.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 out of a population of 571 payments to subrecipients was selected for testing. DETR did not communicate the award’s assistance listing number at the time of disbursement for all 60 payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure the assistance listing number is communicated on each disbursement to a subrecipient.
Views of Responsible Officials: The Department of Employment, Training and Rehabilitation agrees with this finding.
2022-022: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Department of Employment, Training, and Rehabilitation (DETR) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligation dates were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three out of a population of eight applicable subawards obligations during the year was selected for testing.:
Obligation dates were reported as October 1, 2021 for all three subawards rather than August 2, 2021 (two subawards) or September 22, 2021 (one subaward).
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Department of Employment, Training, and Rehabilitation agrees with this finding.
2022-023: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Subrecipient Monitoring
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement.
Condition: The assistance listing number was not identified at the time of disbursement.
Cause: The Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure the assistance listing number was communicated on each disbursement to a subrecipient.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 out of a population of 571 payments to subrecipients was selected for testing. DETR did not communicate the award’s assistance listing number at the time of disbursement for all 60 payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure the assistance listing number is communicated on each disbursement to a subrecipient.
Views of Responsible Officials: The Department of Employment, Training and Rehabilitation agrees with this finding.
2022-022: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Department of Employment, Training, and Rehabilitation (DETR) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligation dates were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three out of a population of eight applicable subawards obligations during the year was selected for testing.:
Obligation dates were reported as October 1, 2021 for all three subawards rather than August 2, 2021 (two subawards) or September 22, 2021 (one subaward).
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Department of Employment, Training, and Rehabilitation agrees with this finding.
2022-023: U.S. Department of Labor
WIOA Cluster:
WIOA Adult Program, 17.258
WIOA Youth Activities, 17.259
WIOA Dislocated Worker Formula Grants, 17.278
Subrecipient Monitoring
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement.
Condition: The assistance listing number was not identified at the time of disbursement.
Cause: The Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure the assistance listing number was communicated on each disbursement to a subrecipient.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 out of a population of 571 payments to subrecipients was selected for testing. DETR did not communicate the award’s assistance listing number at the time of disbursement for all 60 payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend DETR implement internal controls to ensure the assistance listing number is communicated on each disbursement to a subrecipient.
Views of Responsible Officials: The Department of Employment, Training and Rehabilitation agrees with this finding.
2022-020: U.S. Department of Labor
Unemployment Insurance, 17.225
Reporting
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements.
The Nevada Department of Employment, Training and Rehabilitation (DETR) must submit the ETA 2112 UI Financial Transaction Summary as directed by the Employment & Training Administration Handbook. This report is a monthly summary of transactions, which account for all funds received in, passed through, or paid out of the state unemployment fund.
Condition: Amounts reported on the ETA 2112 were misreported by category (benefit type).
Cause: DETR did not have adequate internal controls to ensure benefit payments were appropriately categorized by type.
Effect: Inaccurate information was reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of four out of 12 monthly reports was selected for testing. Errors were noted on each of the four reports tested as follows:
Month Ended July 31, 2021
• Deposit and disbursement total variances of $29,400.
• Off-setting variances in specific benefits ranging from $1,069 to $522,826.
Month Ended August 31, 2021
• Off-setting variances in specific benefits ranging from $2,993 to $3,244,522.
Month Ended December 31, 2021
• Off-setting variances in specific benefits ranging from $4,785 to $373,125.
Month Ended April 30, 2022
• Off-setting variances in specific benefits ranging from $2,992 to $161,515.
Repeat Finding from Prior Year: Yes – prior year finding 2021-026.
Recommendation: We recommend the DETR enhance the internal controls to ensure benefit payments are appropriately categorized by type.
Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.
2022-021: U.S. Department of Labor
Unemployment Insurance, 17.225
Special Tests and Provisions – UI Benefit Payments
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards.
Criteria: State Workforce Agencies are required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is the quality control system designed to assess the accuracy of UI benefit payments and denied claims. The State’s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt and in-depth investigations to determine the degree of accuracy in the administration of the program. The requirements are promulgated in the ET Handbook No. 395 (Handbook).
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
State of Nevada, Department of Employment, Training and Rehabilitation, Manual of Operations, Chapter 7800, Part V, Section 7862 Supervisor Case Review states that the supervisor review is intended as a final check of information gathered and processed during the audit to ensure horizontal consistency, consistent and correct coding, and ensure all required elements are complete and included. Items/Areas of concern will be addressed to the investigator of the case and resolved prior to closing the case.
Department of Labor ET Handbook 395, Part VI, Section 11 Completion of Cases and Timely Data Entry states that a minimum of 70% of cases must be completed within 60 days of the week ending date of the batch, and 95% of cases must be completed within 90 days of the week ending batch; and a minimum of 98% of cases for the year must be completed within 120 days of the ending date of the calendar year.
Condition: Investigations performed by the BAM supervisor or senior investigator are not reviewed by someone other than the investigator. In addition, completion of cases and timely data entry requirements were not met.
Cause: The Nevada Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure appropriate segregation of duties on all BAM investigations and to ensure the timely data entry requirements were met.
Effect: Errors may occur in a BAM investigation that are not detected or may not be detected timely.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 completed BAM cases out of a population of 734 was selected for testing. The investigator and reviewer were the same person for 17 of the cases tested. In addition, a time lapse report of case completion was examined for paid claims accuracy. Of these investigations, 85.19% of the cases were completed within 90 days, rather than the 95% required. In addition, the total completion percentage was 92.12% complete, rather than the 98% completion required.
Repeat Finding from Prior Year: Yes – prior year finding 2021-028.
Recommendation: We recommend DETR implement internal controls to ensure appropriate segregation of duties on all BAM investigations and to ensure timeliness requirements are met.
Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.
2022-020: U.S. Department of Labor
Unemployment Insurance, 17.225
Reporting
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements.
The Nevada Department of Employment, Training and Rehabilitation (DETR) must submit the ETA 2112 UI Financial Transaction Summary as directed by the Employment & Training Administration Handbook. This report is a monthly summary of transactions, which account for all funds received in, passed through, or paid out of the state unemployment fund.
Condition: Amounts reported on the ETA 2112 were misreported by category (benefit type).
Cause: DETR did not have adequate internal controls to ensure benefit payments were appropriately categorized by type.
Effect: Inaccurate information was reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of four out of 12 monthly reports was selected for testing. Errors were noted on each of the four reports tested as follows:
Month Ended July 31, 2021
• Deposit and disbursement total variances of $29,400.
• Off-setting variances in specific benefits ranging from $1,069 to $522,826.
Month Ended August 31, 2021
• Off-setting variances in specific benefits ranging from $2,993 to $3,244,522.
Month Ended December 31, 2021
• Off-setting variances in specific benefits ranging from $4,785 to $373,125.
Month Ended April 30, 2022
• Off-setting variances in specific benefits ranging from $2,992 to $161,515.
Repeat Finding from Prior Year: Yes – prior year finding 2021-026.
Recommendation: We recommend the DETR enhance the internal controls to ensure benefit payments are appropriately categorized by type.
Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.
2022-021: U.S. Department of Labor
Unemployment Insurance, 17.225
Special Tests and Provisions – UI Benefit Payments
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards.
Criteria: State Workforce Agencies are required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is the quality control system designed to assess the accuracy of UI benefit payments and denied claims. The State’s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt and in-depth investigations to determine the degree of accuracy in the administration of the program. The requirements are promulgated in the ET Handbook No. 395 (Handbook).
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
State of Nevada, Department of Employment, Training and Rehabilitation, Manual of Operations, Chapter 7800, Part V, Section 7862 Supervisor Case Review states that the supervisor review is intended as a final check of information gathered and processed during the audit to ensure horizontal consistency, consistent and correct coding, and ensure all required elements are complete and included. Items/Areas of concern will be addressed to the investigator of the case and resolved prior to closing the case.
Department of Labor ET Handbook 395, Part VI, Section 11 Completion of Cases and Timely Data Entry states that a minimum of 70% of cases must be completed within 60 days of the week ending date of the batch, and 95% of cases must be completed within 90 days of the week ending batch; and a minimum of 98% of cases for the year must be completed within 120 days of the ending date of the calendar year.
Condition: Investigations performed by the BAM supervisor or senior investigator are not reviewed by someone other than the investigator. In addition, completion of cases and timely data entry requirements were not met.
Cause: The Nevada Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure appropriate segregation of duties on all BAM investigations and to ensure the timely data entry requirements were met.
Effect: Errors may occur in a BAM investigation that are not detected or may not be detected timely.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 completed BAM cases out of a population of 734 was selected for testing. The investigator and reviewer were the same person for 17 of the cases tested. In addition, a time lapse report of case completion was examined for paid claims accuracy. Of these investigations, 85.19% of the cases were completed within 90 days, rather than the 95% required. In addition, the total completion percentage was 92.12% complete, rather than the 98% completion required.
Repeat Finding from Prior Year: Yes – prior year finding 2021-028.
Recommendation: We recommend DETR implement internal controls to ensure appropriate segregation of duties on all BAM investigations and to ensure timeliness requirements are met.
Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.
2022-024: U.S. Department of the Treasury
Coronavirus Relief Fund, 21.019
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 21.019 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements.
The Nevada Governor’s Finance Office (GFO) must submit quarterly Financial Progress Reports that contain COVID-19 related costs incurred during the covered period to Treasury OIG. Critical information includes:
• The total amount of payments received from Treasury.
• The amount of funds received that were expended or obligated for each project or activity.
• A detailed list and a description of all projects or activities for which funds were expended or obligated.
• Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made that are greater than $50,000.
Condition: Some expenditures were not reported in the appropriate classification or by vendor.
Cause: GFO did not have adequate internal controls to ensure Financial Progress Reports were prepared in accordance with governing requirements.
Effect: Inaccurate information was reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two Financial Progress Reports from a population of four was selected for testing. Obligations for Direct Payments greater than $50,000 did not agree to underlying support. Transfers to other agencies within the State were reported as direct payments to the State of Nevada rather than reported by the vendor that those agencies expended funds to. In addition, payments to subrecipients were reported as direct payments to vendors rather than as a subrecipient payment.
The cumulative impact is as follows:
Reporting Period Ended December 31, 2021
For reporting category - direct payments > $50,000:
Obligations were reported as $371,850,696. However, supporting documentation showed obligations of $44,591,536. Of the $371,850,696 $327,259,160 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or an aggregate payment to an individual. Expenditures were reported as $4,297,856. However, we identified $4,109,950 in expenditures that were reported as a direct payment to other state agencies, counties, or cities. The $4,109,950 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or aggregate payment to an individual.
Reporting Period Ended June 30, 2022
For reporting category - direct payments > $50,000:
Obligations were reported as $33,920,290. However, we identified $7,773,744 in obligations that were reported as a direct payment to other state agencies, counties, or cities. The $7,773,744 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or aggregate payment to an individual.
Repeat Finding from Prior Year: Yes – prior year finding 2021-030.
Recommendation: We recommend the GFO enhance internal controls to ensure Financial Progress Reports are prepared in accordance with governing requirements.
Views of Responsible Officials: The Nevada Governor’s Finance Office agrees with this finding.
2022-025: U.S. Department of the Treasury
Coronavirus Relief Fund, 21.019
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.019 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities communicate the award’s assistance listing number to the subrecipient at the time of disbursement.
Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable.
Condition: Assistance listing numbers were not communicated at disbursement and there was no evidence that subrecipient audit reports were monitored.
Cause: Adequate internal controls were not in place to ensure compliance with subrecipient monitoring requirements for the following agencies:
•Nevada Supreme Court
•Nevada Governor’s Finance Office
Effect: Noncompliance at the subrecipient level may occur and not be detected by the State.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 4 subrecipients out of a population of 18 across all State agencies was selected for testing. A nonstatistical sample of 12 pass-through payments out of a population of 56 was selected for testing.
The following errors were noted by agency:
Nevada Governor’s Finance Office
We tested four subrecipients and nine pass-through payments applicable to the Governors Finance Office. No documentation was available to provide that any of the four subrecipient audit reports had been monitored.
In addition, the assistance listing was not communicated at the time of disbursement for one pass-through payment tested. Nevada Supreme Court We tested three pass-through payments applicable to the Nevada Supreme Court. The assistance listing was not communicated at the time of disbursement for all three pass-through payments.
Repeat Finding from Prior Year: Yes – prior year finding 2021-031.
Recommendation: We recommend the State agencies listed above enhance internal controls to ensure compliance with subrecipient monitoring requirements.
Views of Responsible Officials: The agencies listed above agree with this finding.
2022-026: U.S. Department of Treasury
Emergency Rental Assistance Program, 21.023
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 OMB Compliance Supplement provides that states are required to submit Federal Financial Reports (SF-425). In addition, states are required to submit Quarterly Reports for Emergency Rental Assistance as amended by the Consolidated Appropriations Act of 2021 (ERA1) and Emergency Rental Assistance from the American Rescue Plan Act (ERA2).
Condition: There was no review of the SF-425 reports or Quarterly Reports by an individual independent of the preparation of the reports.
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure reports are reviewed prior to submission.
Effect: Inaccurate information may be submitted to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two SF-425 reports out of a population of four and four Quarterly Reports out of a population of eight was selected for testing. There was no evidence of segregation of duties on any of the reports selected for testing.
Repeat Finding from Prior Year: No
Recommendation: We recommend NHD implement internal controls to ensure reports are reviewed prior to submission.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-027: U.S. Department of Treasury
Emergency Rental Assistance Program, 21.023
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements.
The OMB Compliance Supplement provides that all grantees must submit Quarterly Reports with reporting periods of one calendar quarter and several cumulative fields covering all activity from the date of award through the quarter close. The key line items are the cumulative amount obligated and the cumulative amount expended. These Quarterly Reports are required for expenditures of Emergency Rental Assistance as amended by the Consolidated Appropriations Act of 2021 (ERA1) and Emergency Rental Assistance from the American Rescue Plan Act (ERA2).
Condition: Quarterly Reports submitted for ERA2 were not prepared with the same underlying methodology as the ERA1 Quarterly Reports and adequate documentation was not available to support the inconsistent reporting.
Cause: The Nevada Housing Division (NHD) did not have adequate internal controls to ensure required reports were prepared consistently and with appropriate supporting documentation.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of four Quarterly Reports out of a population of eight was selected for testing. The December 31, 2021 and March 31, 2022 ERA 2 Quarterly Reports were supported by partial underlying information. However, the information reported (i.e., what constituted an obligation and an expenditure) was different than the ERA 1 Quarterly Reports for the same quarter ends. Supporting documentation was not available to describe why the deviation in reporting methodology took place for the same quarter ends.
Repeat Finding from Prior Year: Yes – prior year finding 2021-034.
Recommendation: We recommend NHD enhance internal controls to ensure the Quarterly Reports are prepared consistently and with appropriate supporting documentation.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-029: U.S. Department of Treasury
Homeowners Assistance Fund, 21.026
Cash Management
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 305(b)(1) states that pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized.
In accordance with Title 2 of U.S Code of Federal Regulation (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 305(b)(8) and section 305(b)(9), HAF participants must maintain advance payments of their Federal awards in interest-bearing accounts, except in cases specified by that provision of regulations. HAF participants may retain up to $500 in earned interest annually from the date Treasury disbursed HAF award funds to the HAF participant. Any additional interest earned must be remitted annually to the Department of Health and Human Services Payment Management System.
Condition: The Nevada Housing Division (NHD) did not adequately monitor cash drawdowns by their subrecipients to ensure that the time elapsing between transfer of federal funds to the subrecipient and their disbursement for the program purpose was minimized. NHD did not track interest earned on funds advanced by the Department of Treasury and did not remit NHD’s interest earned greater than $500.
Cause: NHD did not have internal controls to ensure time between disbursement of federal funds to the subrecipient and their disbursement for program purposes was minimized and to ensure interest was appropriately tracked and remitted in accordance with federal regulations.
Effect: An interest liability occurred due to cash advances not being spent as close as administratively feasible to when received and NHD’s interest was not remitted.
Questioned Costs: None
Context/Sampling: The entire population of two subrecipient payments were selected for testing. The subaward provided for an initial advance funding of $3,000,000 for initial program costs, which was advanced on September 16, 2021. A second payment was made on May 17, 2022 for $9,000,000 when the original $3,000,000 had not yet been spent.
Interest of $213,019 was earned on funds advanced to NHD for the year ended June 30, 2022 and was not remitted to the Department of Health and Human Services Payment Management System in accordance with federal regulations.
Repeat Finding from Prior Year: No
Recommendation: We recommend NHD implement internal controls to ensure time between disbursement of federal funds to the subrecipient and their disbursement for program purposes is minimized and to ensure interest is appropriately tracked and remitted.
Views of Responsible Officials: The Nevada Housing Division partially agrees with this finding.
2022-030: U.S. Department of Treasury
Homeowners Assistance Fund, 21.026
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 OMB Compliance Supplement requires that state homeowner assistance fund (HAF) participants submit a one-time interim report.
Condition: There was no evidence that the one-time interim report was reviewed by an individual separate from the preparer.
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure there was documented review of the one-time interim report.
Effect: Incorrect information may be submitted to the federal awarding agency.
Questioned Costs: None
Context/Sampling: We tested the entire population of one report submitted during the year.
Repeat Finding from Prior Year: No
Recommendation: We recommend NHD implement internal controls to ensure there is documented review of reports submitted to federal awarding agencies.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-031: U.S. Department of Treasury
Homeowners Assistance Fund, 21.026
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: We tested the entire population of one subaward obligated during the year. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend NHD implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-032: U.S. Department of Health and Human Services
Homeowner Assistance Fund, 21.026
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Condition: Subawards and disbursements did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed.
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure compliance with subrecipient monitoring requirements.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NHD.
Questioned Costs: None
Context/Sampling: The entire population of one subrecipient was selected for testing, which included two payments. The subaward was missing required information, a risk assessment was not performed, and both payments were missing the assistance listing number.
Repeat Finding from Prior Year: No
Recommendation: We recommend NHD implement internal controls to ensure compliance with subrecipient monitoring requirements.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-033: U.S. Department of the Treasury
Coronavirus State and Local Fiscal Recovery Fund, 21.027
Allowable Activities
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that recipients may use funds for any eligible expenses subject to restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Treasury’s Interim Final Rule and Final Rule at 31 CFR sections 35.7 and 35.8, and Treasury’s FAQs.
The Final Rule provides that recipients may use funds to replace lost public sector revenue to provide government services to the extent of the reduction in revenue experienced due to the pandemic. The lost revenue calculation is described in the Final Rule and provides an illustrative example of the definition of general revenue within the census bureau classification structure of revenue in the FAQs.
Condition: Lost revenue was not calculated consistently in accordance with the Final Rule’s definition of general revenue.
Cause: The Nevada Governor’s Finance Office (GFO) did not have adequate internal controls to ensure the revenue loss calculation was prepared in accordance with governing requirements.
Effect: The maximum allowable expenditures to be spent on government services pursuant to lost public sector revenue was inaccurate.
Questioned Costs: None
Context/Sampling: Cumulative lost revenue, applicable to fiscal year 2022 was calculated for calendar years 2020 and 2021. We examined the calculation performed by GFO and noted general revenues that were improperly excluded (from the base years and calculated years). We reperformed the calculation and noted the following:
•We calculated a growth rate of 6.5% from the base years, whereas GFOused a growth rate of 5.2% (minimum rate allowable).
•For calendar year 2020, GFO determined revenue loss to be$1,086,485,000. We recalculated revenue loss using all generalrevenues and revenue loss was determined to be $2,058,142,958. Thiswas a variance of $971,657,958 where GFO was understated in thecalculation of lost revenue (which does not cause any unallowableexpenditures).
•For calendar year 2021, we and GFO both calculated lost revenue of $0,although the revenue comparisons were different based on therevenues and growth rate used.
Repeat Finding from Prior Year: No
Recommendation: We recommend GFO enhance internal controls to ensure the revenue loss calculation is prepared in accordance with the governing requirements.
Views of Responsible Officials: The Nevada Governor’s Finance Office agrees with this finding.
2022-034: U.S. Department of Treasury
Coronavirus State and Local Fiscal Recovery Fund, 21.027
Procurement, Suspension, and Debarment
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards.
Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred.
Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Procedures were not followed to verify if an entity was suspended or debarred before entering into a covered transaction.
Cause: The Nevada Governor’s Finance Office (GFO) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions or to ensure procedures were followed to verify an entity was not suspended or debarred prior to entering into a covered transaction.
The Nevada Housing Division (NHD) did not have adequate internal controls to ensure procedures were followed to verify subrecipients were not suspended or debarred prior to entering into a covered transaction.
Effect: Contractors may not be aware of required terms and conditions. A covered transaction may be entered into with an entity or subrecipient that is suspended or debarred.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 procurement transactions out of approximately 2,500 was selected for testing, including 12 contracts subject to Appendix II to Part 200. A nonstatistical sample of three subrecipients out of a population of six was selected for testing.
The following errors were noted by agency: Nevada Governor’s Finance Office Two of the contracts were missing certain applicable provisions. Suspension and debarment verification procedures were not performed for two vendors. Nevada Housing Division Suspension and debarment verification procedures were not performed for one subrecipient.
Repeat Finding from Prior Year: No
Recommendation: We recommend the State agencies listed above enhance internal controls to ensure all contracts under federal awards contain the applicable provisions and procedures are followed to ensure entities are not suspended or debarred prior to entering into covered transactions.
Views of Responsible Officials: The State of Nevada agrees with this finding.
2022-035: U.S. Department of the Treasury
Coronavirus State and Local Fiscal Recovery Fund, 21.027
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward and the assistance listing number is communicated at the time of disbursement to subrecipients.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes.
Condition: Subawards did not contain all the required information, assistance listing numbers were not communicated at the time of disbursement, an evaluation of each subrecipients risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed and monitoring procedures were not performed.
Cause: Adequate internal controls were not in place to ensure compliance with subrecipient monitoring requirements for the following agencies:
•Nevada Governor’s Finance Office
•Nevada Housing Division
Effect: Noncompliance at the subrecipient level may occur and not be detected by the State.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subrecipients out of a population of six across all State agencies was selected for testing. A nonstatistical sample of five pass-through payments out of a population of 20 was selected for testing.
The following errors were noted by agency:
Nevada Governor’s Finance Office
We tested 5 pass-through payments applicable to the Nevada Governor’s Finance Office. The assistance listing was not communicated at the time of disbursement for all pass-through payments tested.
Nevada Housing Division
We tested one subrecipient applicable to the Nevada Housing Division. A risk assessment was not performed, the subaward was missing required information and no monitoring procedures were performed as necessary to ensure the subaward was used for authorized purposes.
Repeat Finding from Prior Year: No
Recommendation: We recommend the State agencies listed above enhance internal controls to ensure compliance with subrecipient monitoring requirements.
Views of Responsible Officials: The State of Nevada agrees with this finding.
2022-036: U.S. Department of Treasury
Coronavirus State and Local Fiscal Recovery Fund, 21.027
Other
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Governor’s Finance Office (GFO) did not have adequate internal controls to ensure payments to subrecipients were appropriately reported on the SEFA.
Effect: Prior to correction, amounts passed through to subrecipients on the SEFA were overstated by $332,407,747.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: No
Recommendation: We recommend GFO enhance internal controls to ensure payments to subrecipients are appropriately reported on the SEFA.
Views of Responsible Officials: The Governors Finance Office agrees with this finding.
2022-037: U.S. Department of Education
Title I Grants to Local Educational Agencies, 84.010
Matching, Level of Effort, and Earmarking
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Information the Nevada Department of Education (NDE) compiled to monitor local educational agency compliance with maintenance of effort requirements did not agree to underlying supporting documentation.
Cause: NDE did not have sufficient internal controls to ensure information included in the maintenance of effort monitoring document agreed to underlying documentation.
Effect: Noncompliance with maintenance of effort requirements may not be detected.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of five school districts and four charter schools out of a population of 17 school districts and 37 charter schools was selected for testing. Amounts included in the calculation for one school district and one charter school did not agree to underlying supporting documentation.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure information included in the maintenance of effort monitoring document agrees to underlying documentation.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-038: U.S. Department of Education
Title I Grants to Local Educational Agencies, 84.010
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies must submit their average state per pupil expenditure data to the National Center for Education Statistics (State Per Pupil Expenditure Report).
Condition: Formula errors in the State Per Pupil Expenditure Report resulted in amounts reported for certain pass-through dollars to be inaccurate.
Cause: The Nevada Department of Education (NDE) did not have internal controls to ensure the State Per Pupil Expenditure Report was completed accurately.
Effect: Inaccurate information was reported to the National Center for Education Statistics.
Questioned Costs: None
Context/Sampling: The State Per Pupil Expenditure Report for the year ended June 30, 2021 (submitted in August 2022) was selected for testing. There were no expenditures reported for “Object Code 970 pass-through dollars”; however, the actual amount was $2,408,320. This error had no effect on the final per pupil expenditure calculation.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure the State Per Pupil Expenditure Report is completed accurately.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-039: U.S. Department of Education
Title I Grants to Local Educational Agencies, 84.010
Reporting
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported timely in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have internal controls to ensure subaward information was submitted timely in accordance with the FFATA.
Effect: Subaward obligations were not reported timely in the FSRS.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of four out of a population of 17 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-036.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted timely in accordance with the FFATA.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-040: U.S. Department of Education
Title I Grants to Local Educational Agencies, 84.010
Special Tests and Provisions
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that a State Educational Agency (SEA) must apply section 4306(c) of the ESEA to calculate a hold-harmless base for the prior year that reflects the new or significantly expanded enrollment of the charter school local educational agency (LEA).
Condition: Documentation that the hold-harmless base for the prior year that reflects the new or significantly expanded enrollment of the charter school LEA was not maintained and thus not able to be tested.
Cause: The Nevada Department of Education (NDE) did not have internal controls to ensure appropriate documentation of the calculation of the hold-harmless base for the prior year that reflects the new or significantly expanded enrollment of the charter school LEA was maintained.
Effect: Noncompliance with section 4306(c) of the ESEA may have occurred and not be detected or corrected.
Questioned Costs: None
Context/Sampling: No information was maintained by NDE; therefore, testing was not able to be performed.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure appropriate documentation of compliance with section 4306(c) of the ESEA is maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-042: U.S. Department of Education
Education Stabilization Fund, 84.425
Earmarking
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects grant awards S425U210018 and S425W210029 included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides the following requirements:
• ESSER
o An SEA must allocate at least 90% of ESSER funds to LEAs using the statutorily prescribed formula.
• ARP ESSER
o Under section 2001(f) of the ARP act, each SEA must reserve: (1) at least 5% of ARP ESSER funds for evidence-based interventions that address the academic impact of lost instructional time; (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs.
• Allowances for Administrative Costs
o Under section 18001(e) of the CARES act and section 313(e) of the CRRSA act, an SEA may reserve up to 0.5% of it’s total ESSER I and ESSER II allocations for administrative cost.
o Under Section 2001(f)(4) of the ARP Act, an SEA may reserve not more than 0.5% of the state’s total ARP ESSER award for administrative costs.
o Under section 312(d)(5) of the CRRSA Act, an SEA may reserve up to 0.5% of it’s total allocation or up to $200,000, whichever is greater, to administer the EANS program.
Condition: The Nevada Department of Education (NDE) did not meet the earmarking set aside for evidence-based summer enrichment programs and evidence-based after school programs. In addition, there is no evidence that compliance with the earmarking requirements (i.e., actual amounts meeting the allocations or that there could be future changes to allocated amounts) is monitored.
Cause: NDE did not have adequate internal controls to ensure earmarking requirements were initially met and to ensure on-going compliance was monitored.
Effect: Earmarking requirements were not met and may not be met in the future.
Questioned Costs: None
Context/Sampling: We tested all earmarking computations required to be completed in State fiscal year 2022. There was no evidence monitoring of earmarking requirements.
Under section 2001(f) of the ARP act, each SEA must reserve: (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs.
•The minimum amount to allocate to evidence-based summerenrichment programs and evidence-based after school programs was$21,455,664 and the actual amount allocated was $20,040,662.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure earmarking requirements are initially met and implement internal controls to ensure on-going compliance is monitored.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-042: U.S. Department of Education
Education Stabilization Fund, 84.425
Earmarking
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects grant awards S425U210018 and S425W210029 included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides the following requirements:
• ESSER
o An SEA must allocate at least 90% of ESSER funds to LEAs using the statutorily prescribed formula.
• ARP ESSER
o Under section 2001(f) of the ARP act, each SEA must reserve: (1) at least 5% of ARP ESSER funds for evidence-based interventions that address the academic impact of lost instructional time; (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs.
• Allowances for Administrative Costs
o Under section 18001(e) of the CARES act and section 313(e) of the CRRSA act, an SEA may reserve up to 0.5% of it’s total ESSER I and ESSER II allocations for administrative cost.
o Under Section 2001(f)(4) of the ARP Act, an SEA may reserve not more than 0.5% of the state’s total ARP ESSER award for administrative costs.
o Under section 312(d)(5) of the CRRSA Act, an SEA may reserve up to 0.5% of it’s total allocation or up to $200,000, whichever is greater, to administer the EANS program.
Condition: The Nevada Department of Education (NDE) did not meet the earmarking set aside for evidence-based summer enrichment programs and evidence-based after school programs. In addition, there is no evidence that compliance with the earmarking requirements (i.e., actual amounts meeting the allocations or that there could be future changes to allocated amounts) is monitored.
Cause: NDE did not have adequate internal controls to ensure earmarking requirements were initially met and to ensure on-going compliance was monitored.
Effect: Earmarking requirements were not met and may not be met in the future.
Questioned Costs: None
Context/Sampling: We tested all earmarking computations required to be completed in State fiscal year 2022. There was no evidence monitoring of earmarking requirements.
Under section 2001(f) of the ARP act, each SEA must reserve: (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs.
•The minimum amount to allocate to evidence-based summerenrichment programs and evidence-based after school programs was$21,455,664 and the actual amount allocated was $20,040,662.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure earmarking requirements are initially met and implement internal controls to ensure on-going compliance is monitored.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-041: U.S. Department of Education
Education Stabilization Fund, 84.425
Level of Effort – Maintenance of Effort
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must:
• Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and
• Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019.
Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023.
The CRRSA and ARP Acts have two MOE baselines:
• Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019).
• Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019).
Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations.
Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained.
Effect: Level of effort requirements may not be met.
Questioned Costs: None
Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows:
State support for elementary and secondary education
•NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported.
State support for higher education
•Proportional level from base years: 5.4% or $1,117,028,683
•Amounts reported as appropriated: 3.0% or $626,096,643
•Deficient appropriations based on reported levels by $490,932,040
•NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-043: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports.
Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance.
Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely.
Questioned Costs: None
Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows:
GEER 7/1/2020 through 6/31/2021 Report
•The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported.
•The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported.
•Administrative uses were reported as $0, there was no underlyingsupport for the amount reported.
•Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported.
•13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories.
•No underlying support was available for information reported onInstitutions of Higher Education.
•No underlying support was available for information reported on OtherEntities.
EANS 7/1/2020 through 6/30/2021 Report
•The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported
•The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported.
•1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories.
Repeat Finding from Prior Year: Yes – prior year finding 2021-038.
Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-044: U.S. Department of Education
Education Stabilization Fund, 84.425
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee
obligates a subgrant award equal to $30,000.
Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-039.
Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible
Officials: The Nevada Department of Education agrees with this finding.
2022-045: U.S. Department of Education
Education Stabilization Fund, 84.425
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement.
Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information.
Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities.
A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments.
Repeat Finding from Prior Year: No
Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-046: U.S. Department of Education
Education Stabilization Fund, 84.425
Other
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year.
Condition: Amounts were originally reported incorrectly on the SEFA.
Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA.
Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511.
Questioned Costs: None
Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Year: Yes – prior year finding 2021-041.
Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts.
Views of Responsible Officials: The Nevada Department of Education agrees with this finding.
2022-053: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. State agencies must submit the ACF-696, Child Care and Development Fund Financial Reports quarterly.
Condition: The Division of Welfare and Support Services (DWSS) did not maintain underlying documentation to support the amounts reported in the ACF-696 reports.
Cause: DWSS did not have internal controls to ensure the amounts reported were adequately documented and supported.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two quarterly reports out of a population of four submitted during the audit period were selected for testing. Reconciliations or other records of the underlying accounting system to the amounts reported were not retained by the Division for both reports selected for testing.
Therefore, we were unable to test the accuracy of the amounts reported in the ACFR-696 reports for the quarters ended September 30, 2021 and March 31, 2022.
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure the amounts reported are adequately documented and supported.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-054: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Division of Welfare Support Services (DWSS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subawards obligated during the year out of a population of eight was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-055: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed.
Cause: The Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure risk assessments were performed and subawards contained all required items.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subrecipients out of a population of eight was selected for testing. A risk assessment was not performed for one subrecipient and two subawards were missing communication of whether any research and
development activities were included.
Repeat Finding from Prior Year: Yes – prior year finding 2021-052.
Recommendation: We recommend DWSS enhance internal controls to ensure risk assessments are performed and subawards contain all required items.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-053: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. State agencies must submit the ACF-696, Child Care and Development Fund Financial Reports quarterly.
Condition: The Division of Welfare and Support Services (DWSS) did not maintain underlying documentation to support the amounts reported in the ACF-696 reports.
Cause: DWSS did not have internal controls to ensure the amounts reported were adequately documented and supported.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two quarterly reports out of a population of four submitted during the audit period were selected for testing. Reconciliations or other records of the underlying accounting system to the amounts reported were not retained by the Division for both reports selected for testing.
Therefore, we were unable to test the accuracy of the amounts reported in the ACFR-696 reports for the quarters ended September 30, 2021 and March 31, 2022.
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure the amounts reported are adequately documented and supported.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-054: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Division of Welfare Support Services (DWSS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subawards obligated during the year out of a population of eight was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-055: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed.
Cause: The Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure risk assessments were performed and subawards contained all required items.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subrecipients out of a population of eight was selected for testing. A risk assessment was not performed for one subrecipient and two subawards were missing communication of whether any research and
development activities were included.
Repeat Finding from Prior Year: Yes – prior year finding 2021-052.
Recommendation: We recommend DWSS enhance internal controls to ensure risk assessments are performed and subawards contain all required items.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-053: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. State agencies must submit the ACF-696, Child Care and Development Fund Financial Reports quarterly.
Condition: The Division of Welfare and Support Services (DWSS) did not maintain underlying documentation to support the amounts reported in the ACF-696 reports.
Cause: DWSS did not have internal controls to ensure the amounts reported were adequately documented and supported.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two quarterly reports out of a population of four submitted during the audit period were selected for testing. Reconciliations or other records of the underlying accounting system to the amounts reported were not retained by the Division for both reports selected for testing.
Therefore, we were unable to test the accuracy of the amounts reported in the ACFR-696 reports for the quarters ended September 30, 2021 and March 31, 2022.
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure the amounts reported are adequately documented and supported.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-054: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Division of Welfare Support Services (DWSS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subawards obligated during the year out of a population of eight was selected for testing. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-055: U.S. Department of Health and Human Services
CCDF Cluster:
Child Care and Development Block Grant, 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed.
Cause: The Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure risk assessments were performed and subawards contained all required items.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of three subrecipients out of a population of eight was selected for testing. A risk assessment was not performed for one subrecipient and two subawards were missing communication of whether any research and
development activities were included.
Repeat Finding from Prior Year: Yes – prior year finding 2021-052.
Recommendation: We recommend DWSS enhance internal controls to ensure risk assessments are performed and subawards contain all required items.
Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.
2022-061: U.S. Department of Health and Human Services
Children’s Health Insurance Program (CHIP), 93.767
Medicaid Cluster:
State Medicaid Fraud Control Units, 93.775
State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777
Medical Assistance Program (Medicaid; Title XIX), 93.778
Eligibility
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.767 and 93.778 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 42 Public Health section 435.403 State Residence provides that the State must provide Medicaid to eligible residents of the State, including residents who are absent from the State, except in cases where another state has determined that the person is a resident there for purposes of Medicaid. The Medicaid State Plan provides that the State has an eligibility determination system for data matching through the Public Assistance Reporting Information System (PARIS). The information that is requested is to be exchanged with states and other entities legally entitled to verify Title XIX applications and individuals eligible for covered Title XIX services consistent with applicable PARIS agreements. The State will transmit and receive data quarterly (February, May, August, and November).
The State enrolls beneficiaries on a mandatory basis into managed care entities (managed care organizations and/or primary care case managers) in the absence of certain allowable waivers. The State contracts with managed care organizations and reimburses them for capitation payments.
Condition: PARIS data was not utilized by the Division of Health Care Financing and Policy (DHCFP) or the Division of Welfare and Supportive Services (DWSS) to monitor residency changes to determine when managed care benefits needed to be terminated because the beneficiary was a resident of another state for Medicaid purposes.
Cause: DHCFP and DWSS did not have internal controls in place to effectively communicate the PARIS data between the two agencies to ensure managed care benefits were terminated when appropriate.
Effect: Individuals are enrolled in Medicaid (and CHIP) plans in multiple states and benefits are not being terminated timely. Therefore, the State of Nevada is paying capitation payments to managed care organizations, when the benefits should have been terminated.
Questioned Costs: Projected questioned costs are $12,743,890 for Medicaid and $186,062 for CHIP.
Context/Sampling: No sampling was used. The PARIS data was obtained and examined in total. The PARIS data included 56,892 participants with dual enrollment. Of those 56,892 participants, 9,722 participants were enrolled in another state after the State of
Nevada. The projected questioned costs were estimated by performing the following:
• Identifying individuals who enrolled in another state after they had enrolled in Nevada (termination date for Nevada).
• Estimating a weighted average capitation payment based on demographics that determine the payment amount.
• Applying the weighted average capitation payments from the termination date through June 30, 2022 to determine the total projected questioned costs.
• The total projected questioned costs were then allocated between Medicaid and CHIP using participant counts in each plan between the ages of 0-18. Participants older than 18 were allocated to Medicaid. The allocated projected questioned costs were then multiplied by a weighted average Federal Medical Assistance Percentage (FMAP) to determine the final projected federal questioned costs.
Repeat Finding from Prior Year: No
Recommendation: We recommend DHCFP and DWSS implement internal controls to effectively communicate the PARIS data between each other and to ensure managed care benefits are terminated when appropriate.
Views of Responsible Officials: The Division of Health Care Financing and Policy and the Division of Welfare and Supportive Services agrees with this finding.
2022-062: U.S. Department of Health and Human Services
Medicaid Cluster:
State Medicaid Fraud Control Units, 93.775
State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777
Medical Assistance Program (Medicaid; Title XIX), 93.778
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.778 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements.
The Nevada Division of Health Care Financing and Policy (DHCFP) is required to submit Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program (CMS-64) reports based on actual recorded expenditures (42 CFR 430.30).
Condition: Amounts reported on the CMS-64 were not supported by the underlying accounting information.
Cause: DHCFP did not have adequate internal controls to ensure CMS-64 reports were accurate or supporting documentation for reconciling items was maintained.
Effect: Inaccurate information may be reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two CMS-64 reports out of a population of four was selected for testing. DHCFP has manual adjustments to key line items within the CMS-64 from the general ledger. DHCFP did not maintain a record of any of the
manual adjustments and we were unable to verify whether the manual adjustment was appropriate. In total, there were $91,007,519 in manual adjustments in the December 31, 2021 CMS-64 report and $121,971,786 in the March 31, 2022 CMS-64 report that we were unable to verify.
Repeat Finding from Prior Year: Yes – prior year finding 2021-061.
Recommendation: We recommend DHCFP enhance internal controls to ensure CMS-64 reports are accurate and supporting documentation is maintained.
Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.
2022-050: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Reporting
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects grant award 2101NVLIEA on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements.
The Nevada Division of Welfare and Supportive Services (DWSS) is required to submit the LIHEAP Carryover and Reallotment Report each year, which indicates the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds.
Condition: The projected unobligated balance (carryover amount) did not agree to the underlying actual unobligated balance and there was no underlying documentation or support to support the variance.
Cause: DWSS did not have adequate internal controls to ensure the unobligated balance was adequately documented and supported.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: The one annual report submitted during the audit period was selected for testing. The projected regular block grant carryover amount was reported as $0 on January 12, 2022. The underlying account records supported a carryover
amount of $298,004 as of September 30, 2021. There was no documentation available to explain why the projected balance was different from the actual balance when the projected balance was reported at a later date.
Repeat Finding from Prior Year: Yes – prior year finding 2021-048.
Recommendation: We recommend DWSS enhance internal controls to ensure the projected unobligated balance is adequately documented and supported.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-047: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Cash Management
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: A reimbursement request was not reviewed and approved by an individual independent of the preparation of the request.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure all reimbursement requests were reviewed and approved in accordance with the Division’s internal control policy.
Effect: Inaccurate reimbursement requests may occur and not detected by DWSS timely.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 14 reimbursement requests out of a population of 68 was selected for testing. One reimbursement request did not have the evidence of review and approval in accordance with DWSS’s internal control policy.
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS enhance internal controls to ensure all reimbursement requests are reviewed and approved in accordance with the Division’s internal control policy.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive agrees with this finding.
2022-048: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Eligibility
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 Low-Income Home Energy Assistance State Plan (State Plan) provides for internal controls related to beneficiary case reviews, in part, as follows:
Supervisors are required to complete a set number of case reviews per worker per month to monitor staff performance. Trainees and staff with performance issues are subject to 100% review prior to the posting of benefits. The Program Manager reviews a subset of the review completed by the supervisors to ensure they are adequately identifying and addressing performance issues.
Condition: Supervisor case reviews were not performed in accordance with the State Plan.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure beneficiary case review policies were followed due to supervisory retirements in which the positions were not refilled
in a timely manner.
Effect: Inaccurate eligibility or benefit determinations may be established and not detected by DWSS.
Questioned Costs: None
Context/Sampling: We examined a listing of beneficiary case reviews performed for the entire year. A total of 20 non trainee reviews were performed out of approximately 396, and only two months out of the year were performed for trainee reviews that were
required to be performed in accordance with the State Plan.
Repeat Finding from Prior Year: Yes – prior year finding 2021-047.
Recommendation: We recommend DWSS enhance internal controls to ensure beneficiary case review policies are followed.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-049: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Eligibility
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: As provided by 42 USC 8624(b)(2), assistance may be provided to:
• Households in which one or more individuals are receiving Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP) benefits, or certain needs-tested veterans’ benefits or;
• Households with incomes which do not exceed the greater of 150% of the State’s established poverty level, or 60% of the State’s median income. Lower income eligibility criteria may be established, but no household may be excluded solely on the basis of income if the household income is less than 110% of the State’s poverty level. The Low-Income Home Energy Assistance State Plan (State Plan) establishes and describes assistance benefit levels, which provides for the calculation of a Fixed Annual Credit (FAC) and ultimately, the amount of assistance provided.
Condition: The amount of assistance to provide was not calculated correctly as it related to social security cost-of-living increases.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure the social security cost of living increases were appropriately adjusted in recipients’ income calculation.
Effect: The recipient was entitled to more assistance than calculated.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 recipients out of a population of approximately 18,865 was selected for testing. We noted an error in the amount of income used in the calculation of benefits for two recipients. The sample totaled $53,854 in benefits paid and the error was $11.85.
Repeat Finding from Prior Year: Yes – prior year finding 2021-046.
Recommendation: We recommend DWSS enhance internal controls to ensure the social security cost of living increases are appropriately adjusted in the recipients’ income calculation.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-051: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: We tested the entire population of 4 subawards obligated during the year. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-050.
Recommendation: We recommend NHD implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-052: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable.
Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, and subrecipients were not monitored to ensure audits required by Uniform Guidance were performed.
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure compliance with subrecipient monitoring requirements.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two subrecipients out of a population of four was selected for testing. A risk assessment was not performed and the subawards were missing required information for both subrecipients. In addition, there was
no documentation available to demonstrate that the two subrecipients were monitored to ensure Uniform Guidance audits were obtained, if required, or that management decisions were issued, if applicable.
Repeat Finding from Prior Year: Yes – prior year finding 2021-051.
Recommendation: We recommend the NHD implement internal controls to ensure compliance with subrecipient monitoring requirements.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-047: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Cash Management
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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.
Condition: A reimbursement request was not reviewed and approved by an individual independent of the preparation of the request.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure all reimbursement requests were reviewed and approved in accordance with the Division’s internal control policy.
Effect: Inaccurate reimbursement requests may occur and not detected by DWSS timely.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 14 reimbursement requests out of a population of 68 was selected for testing. One reimbursement request did not have the evidence of review and approval in accordance with DWSS’s internal control policy.
Repeat Finding from Prior Year: No
Recommendation: We recommend DWSS enhance internal controls to ensure all reimbursement requests are reviewed and approved in accordance with the Division’s internal control policy.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive agrees with this finding.
2022-048: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Eligibility
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 Low-Income Home Energy Assistance State Plan (State Plan) provides for internal controls related to beneficiary case reviews, in part, as follows:
Supervisors are required to complete a set number of case reviews per worker per month to monitor staff performance. Trainees and staff with performance issues are subject to 100% review prior to the posting of benefits. The Program Manager reviews a subset of the review completed by the supervisors to ensure they are adequately identifying and addressing performance issues.
Condition: Supervisor case reviews were not performed in accordance with the State Plan.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure beneficiary case review policies were followed due to supervisory retirements in which the positions were not refilled
in a timely manner.
Effect: Inaccurate eligibility or benefit determinations may be established and not detected by DWSS.
Questioned Costs: None
Context/Sampling: We examined a listing of beneficiary case reviews performed for the entire year. A total of 20 non trainee reviews were performed out of approximately 396, and only two months out of the year were performed for trainee reviews that were
required to be performed in accordance with the State Plan.
Repeat Finding from Prior Year: Yes – prior year finding 2021-047.
Recommendation: We recommend DWSS enhance internal controls to ensure beneficiary case review policies are followed.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-049: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Eligibility
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: As provided by 42 USC 8624(b)(2), assistance may be provided to:
• Households in which one or more individuals are receiving Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP) benefits, or certain needs-tested veterans’ benefits or;
• Households with incomes which do not exceed the greater of 150% of the State’s established poverty level, or 60% of the State’s median income. Lower income eligibility criteria may be established, but no household may be excluded solely on the basis of income if the household income is less than 110% of the State’s poverty level. The Low-Income Home Energy Assistance State Plan (State Plan) establishes and describes assistance benefit levels, which provides for the calculation of a Fixed Annual Credit (FAC) and ultimately, the amount of assistance provided.
Condition: The amount of assistance to provide was not calculated correctly as it related to social security cost-of-living increases.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure the social security cost of living increases were appropriately adjusted in recipients’ income calculation.
Effect: The recipient was entitled to more assistance than calculated.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 recipients out of a population of approximately 18,865 was selected for testing. We noted an error in the amount of income used in the calculation of benefits for two recipients. The sample totaled $53,854 in benefits paid and the error was $11.85.
Repeat Finding from Prior Year: Yes – prior year finding 2021-046.
Recommendation: We recommend DWSS enhance internal controls to ensure the social security cost of living increases are appropriately adjusted in the recipients’ income calculation.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-051: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: We tested the entire population of 4 subawards obligated during the year. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-050.
Recommendation: We recommend NHD implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-052: U.S. Department of Health and Human Services
Low-Income Home Energy Assistance, 93.568
Subrecipient Monitoring
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that:
Pass-through entities ensure every subaward includes certain information at the time of the subaward.
Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable.
Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, and subrecipients were not monitored to ensure audits required by Uniform Guidance were performed.
Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure compliance with subrecipient monitoring requirements.
Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two subrecipients out of a population of four was selected for testing. A risk assessment was not performed and the subawards were missing required information for both subrecipients. In addition, there was
no documentation available to demonstrate that the two subrecipients were monitored to ensure Uniform Guidance audits were obtained, if required, or that management decisions were issued, if applicable.
Repeat Finding from Prior Year: Yes – prior year finding 2021-051.
Recommendation: We recommend the NHD implement internal controls to ensure compliance with subrecipient monitoring requirements.
Views of Responsible Officials: The Nevada Housing Division agrees with this finding.
2022-056: U.S. Department of Health and Human Services
Foster Care – Title IV-E, 93.658
Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.658 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides that a State must claim federal financial participation for costs associated with a program only in accordance with its approved cost allocation plan. Since cost allocation plans are of a narrative nature, the Federal government needs assurance that the cost allocation plan has been implemented as approved.
Condition: Allocation methods used in cost allocation did not agree to the approved cost allocation plan and allocation statistics did not agree to underlying support.
Cause: The Nevada Division of Child and Family Services (DCFS) did not have adequate internal controls to ensure costs were allocated accurately and in accordance with the cost allocation plan.
Effect: Costs may be charged to the federal programs that do not agree to the cost allocation plan.
Questioned Costs: None as known and projected costs are less than $25,000.
Context/Sampling: A nonstatistical sample of two out of four quarters was selected for testing. One allocation method did not agree to the submitted cost allocation plan for the March 31, 2022. In addition, one allocation statistic included an error that
impacted the allocation percentages by 0.32% for one allocation method in the March 31, 2022 cost allocation.
Repeat Finding from Prior Year: Yes – prior year finding 2021-054.
Recommendation: We recommend DCFS enhance internal controls to ensure costs are allocated accurately and in accordance with the cost allocation plan.
Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.
2022-057: U.S. Department of Health and Human Services
Foster Care – Title IV-E, 93.658
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listing 93.658 on the Schedule of Expenditures of Federal Awards.
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000.
Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS).
Cause: The Nevada Division of Child and Family Services (DCFS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA.
Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure.
Questioned Costs: None
Context/Sampling: We tested the entire population of two subawards obligated during the year. The quantity and subaward obligation errors were noted as follows:
Repeat Finding from Prior Year: Yes – prior year finding 2021-055.
Recommendation: We recommend DCFS implement internal controls to ensure subaward information is submitted in accordance with the FFATA.
Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.
2022-058: U.S. Department of Health and Human Services
Foster Care – Title IVE-E, 93.658
Subrecipient Monitoring
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listings 93.658 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement.
Condition: The assistance listing number was not identified at the time of disbursement.
Cause: The Division of Child and Family Services (DCFS) did not have adequate internal controls to ensure the assistance listing number was communicated on each disbursement to a subrecipient.
Effect: Noncompliance at the subrecipient level may occur and not be detected by DCFS.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of four subrecipient payments out of a population of 31 was selected for testing. The assistance listing number was not communicated on one payment.
Repeat Finding from Prior Year: No
Recommendation: We recommend DCFS enhance internal controls to ensure the assistance listing number is communicated on each disbursement to a subrecipient.
Views of Responsible Officials: The Nevada Department of Child and Family Services agrees with this finding.
2022-059: U.S. Department of Health and Human Services
Children’s Health Insurance Program (CHIP), 93.767
Eligibility
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.767 on the Schedule of Expenditures of Federal Awards.
Criteria: States are required to determine eligibility in accordance with the eligibility requirements defined in the approved State plan (42 CFR 457). The State plan describes certain aid categories, including the eligibility criteria and potential benefits allowed under the aid categories for eligible individuals.
Condition: Individuals were deemed eligible but were placed in an incorrect aid category or did not have supporting documentation available for review.
Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure aid categories were accurate or applications for CHIP were maintained.
Effect: Individuals may receive benefits that they are not entitled to or not receive benefits for which they are entitled to.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 out of a population of 32,789 eligible participants was selected for testing. One individual had the incorrect aid code classified and two individuals did not have applications available for review.
Repeat Finding from Prior Year: Yes – prior year finding 2021-056.
Recommendation: We recommend DWSS enhance internal controls to ensure that aid categories are accurate and applications for CHIP are maintained.
Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.
2022-060: U.S. Department of Health and Human Services
Children’s Health Insurance Program (CHIP), 93.767
Reporting
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.767 on the Schedule of Expenditures of Federal Awards.
Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements.
The Nevada Division of Health Care Financing and Policy (DHCFP) is required to submit Quarterly Children’s Health Insurance Program Statement Expenditures for Title XXI (CMS-21) reports based on actual recorded expenditures (Sections 2105(e) and 2107(b)(1) of Title XXI).
Condition: Amounts reported on the CMS-21 were not supported by the underlying accounting information.
Cause: DHCFP did not have adequate internal controls to ensure CMS-21 reports were accurate.
Effect: Inaccurate information was reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of two CMS-21 reports out of a population of four was selected for testing. DHCFP was unable to provide support for one variance identified.
The December 31, 2021 CMS-21 report had the following unreconciled variance (Total Computable Column).
• Lines 1B/1D: $253 (less reported than general ledger support)
Repeat Finding from Prior Year: Yes – prior year finding 2021-057.
Recommendation: We recommend DHCFP enhance internal controls to ensure CMS-21 reports are accurate.
Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.
2022-061: U.S. Department of Health and Human Services
Children’s Health Insurance Program (CHIP), 93.767
Medicaid Cluster:
State Medicaid Fraud Control Units, 93.775
State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777
Medical Assistance Program (Medicaid; Title XIX), 93.778
Eligibility
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.767 and 93.778 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 42 Public Health section 435.403 State Residence provides that the State must provide Medicaid to eligible residents of the State, including residents who are absent from the State, except in cases where another state has determined that the person is a resident there for purposes of Medicaid. The Medicaid State Plan provides that the State has an eligibility determination system for data matching through the Public Assistance Reporting Information System (PARIS). The information that is requested is to be exchanged with states and other entities legally entitled to verify Title XIX applications and individuals eligible for covered Title XIX services consistent with applicable PARIS agreements. The State will transmit and receive data quarterly (February, May, August, and November).
The State enrolls beneficiaries on a mandatory basis into managed care entities (managed care organizations and/or primary care case managers) in the absence of certain allowable waivers. The State contracts with managed care organizations and reimburses them for capitation payments.
Condition: PARIS data was not utilized by the Division of Health Care Financing and Policy (DHCFP) or the Division of Welfare and Supportive Services (DWSS) to monitor residency changes to determine when managed care benefits needed to be terminated because the beneficiary was a resident of another state for Medicaid purposes.
Cause: DHCFP and DWSS did not have internal controls in place to effectively communicate the PARIS data between the two agencies to ensure managed care benefits were terminated when appropriate.
Effect: Individuals are enrolled in Medicaid (and CHIP) plans in multiple states and benefits are not being terminated timely. Therefore, the State of Nevada is paying capitation payments to managed care organizations, when the benefits should have been terminated.
Questioned Costs: Projected questioned costs are $12,743,890 for Medicaid and $186,062 for CHIP.
Context/Sampling: No sampling was used. The PARIS data was obtained and examined in total. The PARIS data included 56,892 participants with dual enrollment. Of those 56,892 participants, 9,722 participants were enrolled in another state after the State of
Nevada. The projected questioned costs were estimated by performing the following:
• Identifying individuals who enrolled in another state after they had enrolled in Nevada (termination date for Nevada).
• Estimating a weighted average capitation payment based on demographics that determine the payment amount.
• Applying the weighted average capitation payments from the termination date through June 30, 2022 to determine the total projected questioned costs.
• The total projected questioned costs were then allocated between Medicaid and CHIP using participant counts in each plan between the ages of 0-18. Participants older than 18 were allocated to Medicaid. The allocated projected questioned costs were then multiplied by a weighted average Federal Medical Assistance Percentage (FMAP) to determine the final projected federal questioned costs.
Repeat Finding from Prior Year: No
Recommendation: We recommend DHCFP and DWSS implement internal controls to effectively communicate the PARIS data between each other and to ensure managed care benefits are terminated when appropriate.
Views of Responsible Officials: The Division of Health Care Financing and Policy and the Division of Welfare and Supportive Services agrees with this finding.
2022-063: U.S. Department of Health and Human Services
Opioid STR, 93.788
Earmarking
Significant Deficiency in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.788 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 grant agreements provide that no more than five percent of the total grant award may be used for administrative and infrastructure development costs. In addition, no more than two percent of the total grant award may be used for data collection and reporting.
Condition: The Nevada Division of Public and Behavioral Health (DPBH) did not have evidence of monitoring administrative, infrastructure development, data collection, and reporting costs to ensure they did not exceed the maximum allowable.
Cause: DPBH did not have internal controls to provide for the monitoring of earmarking requirements.
Effect: Costs may be expended above the maximum allowable.
Questioned Costs: None
Context/Sampling: No sampling was performed; earmarking requirements were tested in total. DPBH did not exceed the maximum allowable spending; however, there was no evidence that the earmarking requirement was actively monitored.
Repeat Finding from Prior Year: No
Recommendation: We recommend DPBH implement internal controls to provide for the monitoring of earmarking requirements.
Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.
2022-064: U.S. Department of Health and Human Services
Opioid STR, 93.788
Procurement, Suspension, and Debarment
Material Weakness in Internal Control over Compliance
Grant Award Number: Affects all grant awards included under assistance listing 93.788 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Non-Federal entities are prohibited from contracting with parties that are suspended or debarred under covered transactions.
Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Procedures were not followed to verify if an entity was suspended or debarred before entering into a covered transaction.
Cause: The Nevada Division of Public and Behavioral Health (DPBH) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions or to ensure procedures were followed to verify an entity was not suspended or debarred prior to entering into a covered transaction.
Effect: Contractors may not be aware of required terms and conditions. A covered transaction may be entered into with an entity that is suspended or debarred.
Questioned Costs: None
Context/Sampling: A nonstatistical sample of 60 procurement transactions out of a population of 263 was selected for testing, including 11 contracts subject to Appendix II to Part 200. Eight vendor contracts selected did not contained the applicable provisions required by Appendix II to Part 200 and of those eight, seven were missing procedures to verify the vendor was not suspended or debarred.
Repeat Finding from Prior Year: No
Recommendation: We recommend DPBH enhance internal controls to ensure all contracts under federal awards contain the applicable contract provisions and to ensure procedures are followed to verify an entity was not suspended or debarred prior
to entering into a covered transaction.
Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.
2022-065: U.S. Department of Health and Human Services
Opioid STR, 93.788
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Grant Award Number: Affects all grant awards included under assistance listings 93.788 on the Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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 grant agreements require that award recipients submit an annual and a midyear Performance Progress Report (PPR).
Condition: The Nevada Division of Public and Behavioral Health (DPBH) did not maintain underlying documentation to support the amounts reported in annual and midyear PPRs.
Cause: DPBH did not have internal controls to maintain adequate document retention to support compliance with the reporting requirements.
Effect: Inaccurate information may have been reported to the federal awarding agency.
Questioned Costs: None
Context/Sampling: The annual performance report and the mid-year performance report submitted during the audit period were selected for testing. Support was not maintained to reconcile or verify the accuracy of the amounts reported to the federal awarding
agency for either report.
Repeat Finding from Prior Year: No
Recommendation: We recommend DPBH implement internal controls to maintain adequate document retention to support compliance with the reporting requirements.
Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.