2023-011. Improper Acceptance of Materials Due to Lack of Effective Internal Controls Over the Quality Assurance Program
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
23 CFR Section 637 requires UDOT to follow an approved Quality Assurance Program (QAP) to assure the quality of materials and construction of all Federal-aid highway projects. For 7 of 40 (17.5%) items reviewed, the Resident Engineer accepted construction materials that were not tested in compliance with UDOT’s QAP as approved by the Federal Highway Administration.
Section 1010-1015 of UDOT’s Materials Manual of Instruction describes UDOT’s QAP, and states that materials acceptance decisions for applicable materials must be based on manufacturer information, or sampling and testing procedures performed by qualified testing personnel. Qualified testing personnel must pass two independent assurance (IA) tests each calendar year for each certification area, and one test must be a split sample.
In our testing of 40 accepted materials covered by the QAP, we noted the following errors: (see file for table) These erroneous acceptance decisions and the inconsistent applications of the QAP occurred because internal controls were not adequate to ensure UDOT personnel fully understood the elements of the QAP.
The lack of understanding and the inconsistent application of the QAP could result in inferior construction materials and workmanship being accepted, paid for, and used on UDOT projects.
Recommendation:
We recommend that UDOT strengthen its internal controls to ensure that all relevant personnel are properly trained and familiar with the QAP requirements, and that they apply those requirements consistently.
UDOT’s Response:
Concur
2023-011. Improper Acceptance of Materials Due to Lack of Effective Internal Controls Over the Quality Assurance Program
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
23 CFR Section 637 requires UDOT to follow an approved Quality Assurance Program (QAP) to assure the quality of materials and construction of all Federal-aid highway projects. For 7 of 40 (17.5%) items reviewed, the Resident Engineer accepted construction materials that were not tested in compliance with UDOT’s QAP as approved by the Federal Highway Administration.
Section 1010-1015 of UDOT’s Materials Manual of Instruction describes UDOT’s QAP, and states that materials acceptance decisions for applicable materials must be based on manufacturer information, or sampling and testing procedures performed by qualified testing personnel. Qualified testing personnel must pass two independent assurance (IA) tests each calendar year for each certification area, and one test must be a split sample.
In our testing of 40 accepted materials covered by the QAP, we noted the following errors: (see file for table) These erroneous acceptance decisions and the inconsistent applications of the QAP occurred because internal controls were not adequate to ensure UDOT personnel fully understood the elements of the QAP.
The lack of understanding and the inconsistent application of the QAP could result in inferior construction materials and workmanship being accepted, paid for, and used on UDOT projects.
Recommendation:
We recommend that UDOT strengthen its internal controls to ensure that all relevant personnel are properly trained and familiar with the QAP requirements, and that they apply those requirements consistently.
UDOT’s Response:
Concur
2023-012. Noncompliance Resulting from the Failure to Implement Effective Internal Controls Over Value Engineering Program
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
UDOT has not implemented effective internal controls over their Value Engineering (VE) Program to ensure VE analyses are properly performed on all applicable projects in accordance with federal requirements and UDOT policy and procedures. Consequently, UDOT was unable to provide evidence of the following VE program requirements:
• VE analyses are being completed on all applicable projects; and
• Proper documentation, assessment, and reporting of the completed VE analyses.
23 CFR Part 627.7a(5) “The [State Transportation Agency’s (STA)] VE program shall: Establish and document policies, procedures, and controls to ensure a VE analysis is conducted and all approved recommendations are implemented for all applicable projects administered by local public agencies; and ensure the results of these analyses are included in the VE program monitoring and reporting.”
The issues noted above are the result of inconsistent staff training and inadequate resources to run the expanding VE program effectively. Without appropriate internal controls, VE may not be performed for all applicable projects and approved recommendations identified from VE may not be incorporated into the plans, specifications, and estimates of projects.
Recommendation:
We recommend that UDOT implement effective internal controls and ensure staff over their VE Program are properly trained and have adequate resources to ensure compliance with Federal requirements and UDOT policy.
UDOT’s Response:
Concur
2023-012. Noncompliance Resulting from the Failure to Implement Effective Internal Controls Over Value Engineering Program
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
UDOT has not implemented effective internal controls over their Value Engineering (VE) Program to ensure VE analyses are properly performed on all applicable projects in accordance with federal requirements and UDOT policy and procedures. Consequently, UDOT was unable to provide evidence of the following VE program requirements:
• VE analyses are being completed on all applicable projects; and
• Proper documentation, assessment, and reporting of the completed VE analyses.
23 CFR Part 627.7a(5) “The [State Transportation Agency’s (STA)] VE program shall: Establish and document policies, procedures, and controls to ensure a VE analysis is conducted and all approved recommendations are implemented for all applicable projects administered by local public agencies; and ensure the results of these analyses are included in the VE program monitoring and reporting.”
The issues noted above are the result of inconsistent staff training and inadequate resources to run the expanding VE program effectively. Without appropriate internal controls, VE may not be performed for all applicable projects and approved recommendations identified from VE may not be incorporated into the plans, specifications, and estimates of projects.
Recommendation:
We recommend that UDOT implement effective internal controls and ensure staff over their VE Program are properly trained and have adequate resources to ensure compliance with Federal requirements and UDOT policy.
UDOT’s Response:
Concur
2023-013. Improper Reimbursement of Utility Expenditures Due to Lack of Effective Internal Controls
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: $27,559
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
UDOT improperly reimbursed utility expenditures for two projects prior to the utility agreements being approved by UDOT and the utility company and prior to completion of the work. 23 CFR Section 645.113(g)(3)) requires a utility agreement to be approved prior to the utility incurring any costs or conducting any work that would be eligible for reimbursement. In addition, 23 CFR Section 645.107(a)) requires reimbursement of utility costs to occur after the work is completed. The expenditures on these projects were paid improperly because UDOT has not implemented effective internal controls over utility reimbursements, personnel did not fully understand the Federal reimbursement requirements, and the Utility companies required UDOT to pay for their costs upfront prior to performing any work. Due to improperly approving and reimbursing expenditures before requirements were met, we are questioning the associated costs for the two projects for the amount of $27,559.
Recommendation:
We recommend that UDOT implement effective internal controls and follow Federal requirements for the reimbursement of utility costs.
UDOT’s Response:
Concur
2023-013. Improper Reimbursement of Utility Expenditures Due to Lack of Effective Internal Controls
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: $27,559
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
UDOT improperly reimbursed utility expenditures for two projects prior to the utility agreements being approved by UDOT and the utility company and prior to completion of the work. 23 CFR Section 645.113(g)(3)) requires a utility agreement to be approved prior to the utility incurring any costs or conducting any work that would be eligible for reimbursement. In addition, 23 CFR Section 645.107(a)) requires reimbursement of utility costs to occur after the work is completed. The expenditures on these projects were paid improperly because UDOT has not implemented effective internal controls over utility reimbursements, personnel did not fully understand the Federal reimbursement requirements, and the Utility companies required UDOT to pay for their costs upfront prior to performing any work. Due to improperly approving and reimbursing expenditures before requirements were met, we are questioning the associated costs for the two projects for the amount of $27,559.
Recommendation:
We recommend that UDOT implement effective internal controls and follow Federal requirements for the reimbursement of utility costs.
UDOT’s Response:
Concur
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-015. Obligation of CRF Funds Not Completed Within Proper Timeframe
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
On August 3, 2022, the Governor’s Office of Planning and Budget (GOPB) obligated approximately $48 million of Coronavirus Relief Funds (CRF), seven months past the final obligation date of December 31, 2021. GOPB subsequently expended the funds on December 30, 2022, three months after the final obligation liquidation date of September 30, 2022 due to delays in FEMA reimbursements received after this date.¬¬
The US Department of the Treasury’s (Treasury) program guidance indicates payments from CRF “may only be used to cover costs that were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.” The Treasury further revised its definition of “incurred” as of December 14, 2021, to align with Uniform Guidance’s definition of obligation (2 CFR 200.1). This means an order should be placed for property and services or entering into contracts, subawards, and similar transactions that require payment by December 31, 2021 to properly obligate CRF funds. In addition, the Treasury’s revised guidance clarified that recipients “are required to expend their funds received from the CRF to cover these obligations by September 30, 2022.” Regarding FEMA reimbursements, the Prime Recipient Quarterly Grant Solutions Closeout Procedure Guide, which was issued by the Treasury Office of Inspector General (OIG) on February 14, 2022, states that “a prime recipient should refer to Treasury’s guidance when applying CRF proceeds, which are freed up as a result of FEMA’s 100 percent Federal cost share coverage, to other eligible uses under the CARES Act.”
Facing the deadlines to close out CRF or lose funding, GOPB used the funds without appropriately adhering to the obligation and liquidation dates provided in the written guidance issued by the Treasury, including after-the-fact FEMA reimbursements. Failure to follow Treasury’s written period of performance guidance for timely obligation and liquidation of funds may jeopardize the use of funding and require repayment by the State. We considered GOPB’s use of the $48 million to ultimately be for eligible purposes under CRF’s allowable activities. As such, we did not question these costs.
Recommendation:
We recommend GOPB follow the Treasury’s written period of performance guidance with regard to obligation and liquidation of funds as it closes out the CRF program.
GOPB’s Response:
GOPB agrees with the basis for this finding. GOPB followed an alternative interpretation of the Treasury's CRF guidance regarding the use of CRF proceeds for costs incurred in response to correspondence with the U.S. Treasury. It was believed actions taken were reasonable based on that correspondence and Treasury’s Closeout Procedures Guide.
After the enactment of the CARES Act, the Treasury Department updated guidance on costs incurred multiple times, including with the CRF Guidance Revision Regarding Cost Incurred on December 14, 2021. Based on a review of Treasury guidance and an email exchange between GOPB and the Treasury Office of Inspector General in September 2022, GOPB updated quarterly CRF reports to reallocate CRF proceeds freed up as a result of FEMA reimbursements to other eligible costs incurred prior to December 31, 2021. Those reallocated costs were incurred prior to December 31, 2021 and were eligible CRF obligations and expenditures, even if the state didn’t ultimately determine it would use CRF proceeds to cover those costs until the December 2022 reporting period.
2023-015. Obligation of CRF Funds Not Completed Within Proper Timeframe
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
On August 3, 2022, the Governor’s Office of Planning and Budget (GOPB) obligated approximately $48 million of Coronavirus Relief Funds (CRF), seven months past the final obligation date of December 31, 2021. GOPB subsequently expended the funds on December 30, 2022, three months after the final obligation liquidation date of September 30, 2022 due to delays in FEMA reimbursements received after this date.¬¬
The US Department of the Treasury’s (Treasury) program guidance indicates payments from CRF “may only be used to cover costs that were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.” The Treasury further revised its definition of “incurred” as of December 14, 2021, to align with Uniform Guidance’s definition of obligation (2 CFR 200.1). This means an order should be placed for property and services or entering into contracts, subawards, and similar transactions that require payment by December 31, 2021 to properly obligate CRF funds. In addition, the Treasury’s revised guidance clarified that recipients “are required to expend their funds received from the CRF to cover these obligations by September 30, 2022.” Regarding FEMA reimbursements, the Prime Recipient Quarterly Grant Solutions Closeout Procedure Guide, which was issued by the Treasury Office of Inspector General (OIG) on February 14, 2022, states that “a prime recipient should refer to Treasury’s guidance when applying CRF proceeds, which are freed up as a result of FEMA’s 100 percent Federal cost share coverage, to other eligible uses under the CARES Act.”
Facing the deadlines to close out CRF or lose funding, GOPB used the funds without appropriately adhering to the obligation and liquidation dates provided in the written guidance issued by the Treasury, including after-the-fact FEMA reimbursements. Failure to follow Treasury’s written period of performance guidance for timely obligation and liquidation of funds may jeopardize the use of funding and require repayment by the State. We considered GOPB’s use of the $48 million to ultimately be for eligible purposes under CRF’s allowable activities. As such, we did not question these costs.
Recommendation:
We recommend GOPB follow the Treasury’s written period of performance guidance with regard to obligation and liquidation of funds as it closes out the CRF program.
GOPB’s Response:
GOPB agrees with the basis for this finding. GOPB followed an alternative interpretation of the Treasury's CRF guidance regarding the use of CRF proceeds for costs incurred in response to correspondence with the U.S. Treasury. It was believed actions taken were reasonable based on that correspondence and Treasury’s Closeout Procedures Guide.
After the enactment of the CARES Act, the Treasury Department updated guidance on costs incurred multiple times, including with the CRF Guidance Revision Regarding Cost Incurred on December 14, 2021. Based on a review of Treasury guidance and an email exchange between GOPB and the Treasury Office of Inspector General in September 2022, GOPB updated quarterly CRF reports to reallocate CRF proceeds freed up as a result of FEMA reimbursements to other eligible costs incurred prior to December 31, 2021. Those reallocated costs were incurred prior to December 31, 2021 and were eligible CRF obligations and expenditures, even if the state didn’t ultimately determine it would use CRF proceeds to cover those costs until the December 2022 reporting period.
2023-015. Obligation of CRF Funds Not Completed Within Proper Timeframe
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
On August 3, 2022, the Governor’s Office of Planning and Budget (GOPB) obligated approximately $48 million of Coronavirus Relief Funds (CRF), seven months past the final obligation date of December 31, 2021. GOPB subsequently expended the funds on December 30, 2022, three months after the final obligation liquidation date of September 30, 2022 due to delays in FEMA reimbursements received after this date.¬¬
The US Department of the Treasury’s (Treasury) program guidance indicates payments from CRF “may only be used to cover costs that were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.” The Treasury further revised its definition of “incurred” as of December 14, 2021, to align with Uniform Guidance’s definition of obligation (2 CFR 200.1). This means an order should be placed for property and services or entering into contracts, subawards, and similar transactions that require payment by December 31, 2021 to properly obligate CRF funds. In addition, the Treasury’s revised guidance clarified that recipients “are required to expend their funds received from the CRF to cover these obligations by September 30, 2022.” Regarding FEMA reimbursements, the Prime Recipient Quarterly Grant Solutions Closeout Procedure Guide, which was issued by the Treasury Office of Inspector General (OIG) on February 14, 2022, states that “a prime recipient should refer to Treasury’s guidance when applying CRF proceeds, which are freed up as a result of FEMA’s 100 percent Federal cost share coverage, to other eligible uses under the CARES Act.”
Facing the deadlines to close out CRF or lose funding, GOPB used the funds without appropriately adhering to the obligation and liquidation dates provided in the written guidance issued by the Treasury, including after-the-fact FEMA reimbursements. Failure to follow Treasury’s written period of performance guidance for timely obligation and liquidation of funds may jeopardize the use of funding and require repayment by the State. We considered GOPB’s use of the $48 million to ultimately be for eligible purposes under CRF’s allowable activities. As such, we did not question these costs.
Recommendation:
We recommend GOPB follow the Treasury’s written period of performance guidance with regard to obligation and liquidation of funds as it closes out the CRF program.
GOPB’s Response:
GOPB agrees with the basis for this finding. GOPB followed an alternative interpretation of the Treasury's CRF guidance regarding the use of CRF proceeds for costs incurred in response to correspondence with the U.S. Treasury. It was believed actions taken were reasonable based on that correspondence and Treasury’s Closeout Procedures Guide.
After the enactment of the CARES Act, the Treasury Department updated guidance on costs incurred multiple times, including with the CRF Guidance Revision Regarding Cost Incurred on December 14, 2021. Based on a review of Treasury guidance and an email exchange between GOPB and the Treasury Office of Inspector General in September 2022, GOPB updated quarterly CRF reports to reallocate CRF proceeds freed up as a result of FEMA reimbursements to other eligible costs incurred prior to December 31, 2021. Those reallocated costs were incurred prior to December 31, 2021 and were eligible CRF obligations and expenditures, even if the state didn’t ultimately determine it would use CRF proceeds to cover those costs until the December 2022 reporting period.
2023-015. Obligation of CRF Funds Not Completed Within Proper Timeframe
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
On August 3, 2022, the Governor’s Office of Planning and Budget (GOPB) obligated approximately $48 million of Coronavirus Relief Funds (CRF), seven months past the final obligation date of December 31, 2021. GOPB subsequently expended the funds on December 30, 2022, three months after the final obligation liquidation date of September 30, 2022 due to delays in FEMA reimbursements received after this date.¬¬
The US Department of the Treasury’s (Treasury) program guidance indicates payments from CRF “may only be used to cover costs that were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.” The Treasury further revised its definition of “incurred” as of December 14, 2021, to align with Uniform Guidance’s definition of obligation (2 CFR 200.1). This means an order should be placed for property and services or entering into contracts, subawards, and similar transactions that require payment by December 31, 2021 to properly obligate CRF funds. In addition, the Treasury’s revised guidance clarified that recipients “are required to expend their funds received from the CRF to cover these obligations by September 30, 2022.” Regarding FEMA reimbursements, the Prime Recipient Quarterly Grant Solutions Closeout Procedure Guide, which was issued by the Treasury Office of Inspector General (OIG) on February 14, 2022, states that “a prime recipient should refer to Treasury’s guidance when applying CRF proceeds, which are freed up as a result of FEMA’s 100 percent Federal cost share coverage, to other eligible uses under the CARES Act.”
Facing the deadlines to close out CRF or lose funding, GOPB used the funds without appropriately adhering to the obligation and liquidation dates provided in the written guidance issued by the Treasury, including after-the-fact FEMA reimbursements. Failure to follow Treasury’s written period of performance guidance for timely obligation and liquidation of funds may jeopardize the use of funding and require repayment by the State. We considered GOPB’s use of the $48 million to ultimately be for eligible purposes under CRF’s allowable activities. As such, we did not question these costs.
Recommendation:
We recommend GOPB follow the Treasury’s written period of performance guidance with regard to obligation and liquidation of funds as it closes out the CRF program.
GOPB’s Response:
GOPB agrees with the basis for this finding. GOPB followed an alternative interpretation of the Treasury's CRF guidance regarding the use of CRF proceeds for costs incurred in response to correspondence with the U.S. Treasury. It was believed actions taken were reasonable based on that correspondence and Treasury’s Closeout Procedures Guide.
After the enactment of the CARES Act, the Treasury Department updated guidance on costs incurred multiple times, including with the CRF Guidance Revision Regarding Cost Incurred on December 14, 2021. Based on a review of Treasury guidance and an email exchange between GOPB and the Treasury Office of Inspector General in September 2022, GOPB updated quarterly CRF reports to reallocate CRF proceeds freed up as a result of FEMA reimbursements to other eligible costs incurred prior to December 31, 2021. Those reallocated costs were incurred prior to December 31, 2021 and were eligible CRF obligations and expenditures, even if the state didn’t ultimately determine it would use CRF proceeds to cover those costs until the December 2022 reporting period.
2023-015. Obligation of CRF Funds Not Completed Within Proper Timeframe
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
On August 3, 2022, the Governor’s Office of Planning and Budget (GOPB) obligated approximately $48 million of Coronavirus Relief Funds (CRF), seven months past the final obligation date of December 31, 2021. GOPB subsequently expended the funds on December 30, 2022, three months after the final obligation liquidation date of September 30, 2022 due to delays in FEMA reimbursements received after this date.¬¬
The US Department of the Treasury’s (Treasury) program guidance indicates payments from CRF “may only be used to cover costs that were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.” The Treasury further revised its definition of “incurred” as of December 14, 2021, to align with Uniform Guidance’s definition of obligation (2 CFR 200.1). This means an order should be placed for property and services or entering into contracts, subawards, and similar transactions that require payment by December 31, 2021 to properly obligate CRF funds. In addition, the Treasury’s revised guidance clarified that recipients “are required to expend their funds received from the CRF to cover these obligations by September 30, 2022.” Regarding FEMA reimbursements, the Prime Recipient Quarterly Grant Solutions Closeout Procedure Guide, which was issued by the Treasury Office of Inspector General (OIG) on February 14, 2022, states that “a prime recipient should refer to Treasury’s guidance when applying CRF proceeds, which are freed up as a result of FEMA’s 100 percent Federal cost share coverage, to other eligible uses under the CARES Act.”
Facing the deadlines to close out CRF or lose funding, GOPB used the funds without appropriately adhering to the obligation and liquidation dates provided in the written guidance issued by the Treasury, including after-the-fact FEMA reimbursements. Failure to follow Treasury’s written period of performance guidance for timely obligation and liquidation of funds may jeopardize the use of funding and require repayment by the State. We considered GOPB’s use of the $48 million to ultimately be for eligible purposes under CRF’s allowable activities. As such, we did not question these costs.
Recommendation:
We recommend GOPB follow the Treasury’s written period of performance guidance with regard to obligation and liquidation of funds as it closes out the CRF program.
GOPB’s Response:
GOPB agrees with the basis for this finding. GOPB followed an alternative interpretation of the Treasury's CRF guidance regarding the use of CRF proceeds for costs incurred in response to correspondence with the U.S. Treasury. It was believed actions taken were reasonable based on that correspondence and Treasury’s Closeout Procedures Guide.
After the enactment of the CARES Act, the Treasury Department updated guidance on costs incurred multiple times, including with the CRF Guidance Revision Regarding Cost Incurred on December 14, 2021. Based on a review of Treasury guidance and an email exchange between GOPB and the Treasury Office of Inspector General in September 2022, GOPB updated quarterly CRF reports to reallocate CRF proceeds freed up as a result of FEMA reimbursements to other eligible costs incurred prior to December 31, 2021. Those reallocated costs were incurred prior to December 31, 2021 and were eligible CRF obligations and expenditures, even if the state didn’t ultimately determine it would use CRF proceeds to cover those costs until the December 2022 reporting period.
2023-016. Underlying Accounting Data Does Not Support CRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-024, 2021-020
The methodology used by GOPB to prepare and submit CRF quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system or “official record.” We selected the October 2022 and January 2023 report submissions to test key items on the reports as specified in the OMB Compliance Supplement. We were unable to determine the completeness of the line items as follows:
October 2022 Report
• Manual adjustments made to the original data totaled $98.3 million.
January 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $68.2 million of expenditures more than data used in the preparation schedules.
• Manual adjustments made to the data totaled $54.5 million.
While manual adjustments, corrections, and other changes (i.e., FEMA reimbursements) are not unexpected in reports, we considered the following in relation to GOPB’s report preparation:
• A reconciliation of the underlying accounting data and manual adjustments in the reports to the “official record” of CRF expenditures in FINET has not occurred.
• Underlying accounting data was inconsistently coded from 2020 through 2023 but has not been reconciled to ensure all appropriate expenditures have been reported.
• Manual adjustments include significant amounts of expenditures reimbursed by FEMA that may have been charged to both programs without detection.
• Manual adjustments identified appear to report transactions within the period of performance, but underlying evidence indicates the obligation and liquidation occurred subsequent to period of performance dates in FINET. See Finding 1.
• We could not properly test reported total cumulative obligations for either report because they were not properly documented. FINET does not track obligations and as such, reported obligations are manually included for reporting.
• GOPB did not maintain appropriate internal control separation of duties between preparation and review.
The Treasury’s guidance indicates that the “prime recipient’s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient’s accounting system.” Additionally, the OIG FAQs on reporting and recordkeeping describe the need to correct errors or modifications in a timely manner and to report actual obligations and expenditures rather than estimates.
GOPB relied on state agencies to properly code expenditures and to have a proper understanding of the appropriate use of funds. The data in FINET and expenditures reported drastically differed due to these coding differences and required manual adjustments that were not properly documented. GOPB personnel did not prioritize the reconciliation of FINET expenditures and obligations to those reported because of other duties, time constraints, and priorities. In addition to the failure to properly code and track expenditures, an untimely reconciliation and lack of appropriate separation of duties to prepare and review reports can lead GOPB to significantly misreport expenditures, misidentify errors, and miscalculate obligations of funds to be returned to the Treasury, if any.
Recommendations:
We recommend the following to GOPB:
• Perform a reconciliation of reported and actual expenditures in FINET from fiscal years 2021 – 2023 as it closes out the CRF.
• Perform a reconciliation of FEMA reimbursements with reported and actual expenditures to ensure expenditures were not charged to both programs.
• Ensure adequate documentation of expenditures, obligations, and adjustments exist as part of closing out the CRF.
GOPB’s Response:
GOPB agrees with this finding. GOPB acknowledges that because of complexities in coding and tracking during fiscal years 2020 to 2023 and a ten-day federal reporting deadline, not all reported expenditures were reconciled before quarterly reports were submitted. Between July 2022 and January 2023, GOPB made significant progress by compiling and reconciling a master CRF expenditure file. After completing a final reconciliation for the September 31, 2023, CRF quarterly report, GOPB is confident every transaction reported to the Department of the Treasury, including adjustments for FEMA reimbursements and other recategorizations, is reconciled with FINET data.
2023-016. Underlying Accounting Data Does Not Support CRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-024, 2021-020
The methodology used by GOPB to prepare and submit CRF quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system or “official record.” We selected the October 2022 and January 2023 report submissions to test key items on the reports as specified in the OMB Compliance Supplement. We were unable to determine the completeness of the line items as follows:
October 2022 Report
• Manual adjustments made to the original data totaled $98.3 million.
January 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $68.2 million of expenditures more than data used in the preparation schedules.
• Manual adjustments made to the data totaled $54.5 million.
While manual adjustments, corrections, and other changes (i.e., FEMA reimbursements) are not unexpected in reports, we considered the following in relation to GOPB’s report preparation:
• A reconciliation of the underlying accounting data and manual adjustments in the reports to the “official record” of CRF expenditures in FINET has not occurred.
• Underlying accounting data was inconsistently coded from 2020 through 2023 but has not been reconciled to ensure all appropriate expenditures have been reported.
• Manual adjustments include significant amounts of expenditures reimbursed by FEMA that may have been charged to both programs without detection.
• Manual adjustments identified appear to report transactions within the period of performance, but underlying evidence indicates the obligation and liquidation occurred subsequent to period of performance dates in FINET. See Finding 1.
• We could not properly test reported total cumulative obligations for either report because they were not properly documented. FINET does not track obligations and as such, reported obligations are manually included for reporting.
• GOPB did not maintain appropriate internal control separation of duties between preparation and review.
The Treasury’s guidance indicates that the “prime recipient’s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient’s accounting system.” Additionally, the OIG FAQs on reporting and recordkeeping describe the need to correct errors or modifications in a timely manner and to report actual obligations and expenditures rather than estimates.
GOPB relied on state agencies to properly code expenditures and to have a proper understanding of the appropriate use of funds. The data in FINET and expenditures reported drastically differed due to these coding differences and required manual adjustments that were not properly documented. GOPB personnel did not prioritize the reconciliation of FINET expenditures and obligations to those reported because of other duties, time constraints, and priorities. In addition to the failure to properly code and track expenditures, an untimely reconciliation and lack of appropriate separation of duties to prepare and review reports can lead GOPB to significantly misreport expenditures, misidentify errors, and miscalculate obligations of funds to be returned to the Treasury, if any.
Recommendations:
We recommend the following to GOPB:
• Perform a reconciliation of reported and actual expenditures in FINET from fiscal years 2021 – 2023 as it closes out the CRF.
• Perform a reconciliation of FEMA reimbursements with reported and actual expenditures to ensure expenditures were not charged to both programs.
• Ensure adequate documentation of expenditures, obligations, and adjustments exist as part of closing out the CRF.
GOPB’s Response:
GOPB agrees with this finding. GOPB acknowledges that because of complexities in coding and tracking during fiscal years 2020 to 2023 and a ten-day federal reporting deadline, not all reported expenditures were reconciled before quarterly reports were submitted. Between July 2022 and January 2023, GOPB made significant progress by compiling and reconciling a master CRF expenditure file. After completing a final reconciliation for the September 31, 2023, CRF quarterly report, GOPB is confident every transaction reported to the Department of the Treasury, including adjustments for FEMA reimbursements and other recategorizations, is reconciled with FINET data.
2023-016. Underlying Accounting Data Does Not Support CRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-024, 2021-020
The methodology used by GOPB to prepare and submit CRF quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system or “official record.” We selected the October 2022 and January 2023 report submissions to test key items on the reports as specified in the OMB Compliance Supplement. We were unable to determine the completeness of the line items as follows:
October 2022 Report
• Manual adjustments made to the original data totaled $98.3 million.
January 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $68.2 million of expenditures more than data used in the preparation schedules.
• Manual adjustments made to the data totaled $54.5 million.
While manual adjustments, corrections, and other changes (i.e., FEMA reimbursements) are not unexpected in reports, we considered the following in relation to GOPB’s report preparation:
• A reconciliation of the underlying accounting data and manual adjustments in the reports to the “official record” of CRF expenditures in FINET has not occurred.
• Underlying accounting data was inconsistently coded from 2020 through 2023 but has not been reconciled to ensure all appropriate expenditures have been reported.
• Manual adjustments include significant amounts of expenditures reimbursed by FEMA that may have been charged to both programs without detection.
• Manual adjustments identified appear to report transactions within the period of performance, but underlying evidence indicates the obligation and liquidation occurred subsequent to period of performance dates in FINET. See Finding 1.
• We could not properly test reported total cumulative obligations for either report because they were not properly documented. FINET does not track obligations and as such, reported obligations are manually included for reporting.
• GOPB did not maintain appropriate internal control separation of duties between preparation and review.
The Treasury’s guidance indicates that the “prime recipient’s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient’s accounting system.” Additionally, the OIG FAQs on reporting and recordkeeping describe the need to correct errors or modifications in a timely manner and to report actual obligations and expenditures rather than estimates.
GOPB relied on state agencies to properly code expenditures and to have a proper understanding of the appropriate use of funds. The data in FINET and expenditures reported drastically differed due to these coding differences and required manual adjustments that were not properly documented. GOPB personnel did not prioritize the reconciliation of FINET expenditures and obligations to those reported because of other duties, time constraints, and priorities. In addition to the failure to properly code and track expenditures, an untimely reconciliation and lack of appropriate separation of duties to prepare and review reports can lead GOPB to significantly misreport expenditures, misidentify errors, and miscalculate obligations of funds to be returned to the Treasury, if any.
Recommendations:
We recommend the following to GOPB:
• Perform a reconciliation of reported and actual expenditures in FINET from fiscal years 2021 – 2023 as it closes out the CRF.
• Perform a reconciliation of FEMA reimbursements with reported and actual expenditures to ensure expenditures were not charged to both programs.
• Ensure adequate documentation of expenditures, obligations, and adjustments exist as part of closing out the CRF.
GOPB’s Response:
GOPB agrees with this finding. GOPB acknowledges that because of complexities in coding and tracking during fiscal years 2020 to 2023 and a ten-day federal reporting deadline, not all reported expenditures were reconciled before quarterly reports were submitted. Between July 2022 and January 2023, GOPB made significant progress by compiling and reconciling a master CRF expenditure file. After completing a final reconciliation for the September 31, 2023, CRF quarterly report, GOPB is confident every transaction reported to the Department of the Treasury, including adjustments for FEMA reimbursements and other recategorizations, is reconciled with FINET data.
2023-016. Underlying Accounting Data Does Not Support CRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-024, 2021-020
The methodology used by GOPB to prepare and submit CRF quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system or “official record.” We selected the October 2022 and January 2023 report submissions to test key items on the reports as specified in the OMB Compliance Supplement. We were unable to determine the completeness of the line items as follows:
October 2022 Report
• Manual adjustments made to the original data totaled $98.3 million.
January 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $68.2 million of expenditures more than data used in the preparation schedules.
• Manual adjustments made to the data totaled $54.5 million.
While manual adjustments, corrections, and other changes (i.e., FEMA reimbursements) are not unexpected in reports, we considered the following in relation to GOPB’s report preparation:
• A reconciliation of the underlying accounting data and manual adjustments in the reports to the “official record” of CRF expenditures in FINET has not occurred.
• Underlying accounting data was inconsistently coded from 2020 through 2023 but has not been reconciled to ensure all appropriate expenditures have been reported.
• Manual adjustments include significant amounts of expenditures reimbursed by FEMA that may have been charged to both programs without detection.
• Manual adjustments identified appear to report transactions within the period of performance, but underlying evidence indicates the obligation and liquidation occurred subsequent to period of performance dates in FINET. See Finding 1.
• We could not properly test reported total cumulative obligations for either report because they were not properly documented. FINET does not track obligations and as such, reported obligations are manually included for reporting.
• GOPB did not maintain appropriate internal control separation of duties between preparation and review.
The Treasury’s guidance indicates that the “prime recipient’s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient’s accounting system.” Additionally, the OIG FAQs on reporting and recordkeeping describe the need to correct errors or modifications in a timely manner and to report actual obligations and expenditures rather than estimates.
GOPB relied on state agencies to properly code expenditures and to have a proper understanding of the appropriate use of funds. The data in FINET and expenditures reported drastically differed due to these coding differences and required manual adjustments that were not properly documented. GOPB personnel did not prioritize the reconciliation of FINET expenditures and obligations to those reported because of other duties, time constraints, and priorities. In addition to the failure to properly code and track expenditures, an untimely reconciliation and lack of appropriate separation of duties to prepare and review reports can lead GOPB to significantly misreport expenditures, misidentify errors, and miscalculate obligations of funds to be returned to the Treasury, if any.
Recommendations:
We recommend the following to GOPB:
• Perform a reconciliation of reported and actual expenditures in FINET from fiscal years 2021 – 2023 as it closes out the CRF.
• Perform a reconciliation of FEMA reimbursements with reported and actual expenditures to ensure expenditures were not charged to both programs.
• Ensure adequate documentation of expenditures, obligations, and adjustments exist as part of closing out the CRF.
GOPB’s Response:
GOPB agrees with this finding. GOPB acknowledges that because of complexities in coding and tracking during fiscal years 2020 to 2023 and a ten-day federal reporting deadline, not all reported expenditures were reconciled before quarterly reports were submitted. Between July 2022 and January 2023, GOPB made significant progress by compiling and reconciling a master CRF expenditure file. After completing a final reconciliation for the September 31, 2023, CRF quarterly report, GOPB is confident every transaction reported to the Department of the Treasury, including adjustments for FEMA reimbursements and other recategorizations, is reconciled with FINET data.
2023-016. Underlying Accounting Data Does Not Support CRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-024, 2021-020
The methodology used by GOPB to prepare and submit CRF quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system or “official record.” We selected the October 2022 and January 2023 report submissions to test key items on the reports as specified in the OMB Compliance Supplement. We were unable to determine the completeness of the line items as follows:
October 2022 Report
• Manual adjustments made to the original data totaled $98.3 million.
January 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $68.2 million of expenditures more than data used in the preparation schedules.
• Manual adjustments made to the data totaled $54.5 million.
While manual adjustments, corrections, and other changes (i.e., FEMA reimbursements) are not unexpected in reports, we considered the following in relation to GOPB’s report preparation:
• A reconciliation of the underlying accounting data and manual adjustments in the reports to the “official record” of CRF expenditures in FINET has not occurred.
• Underlying accounting data was inconsistently coded from 2020 through 2023 but has not been reconciled to ensure all appropriate expenditures have been reported.
• Manual adjustments include significant amounts of expenditures reimbursed by FEMA that may have been charged to both programs without detection.
• Manual adjustments identified appear to report transactions within the period of performance, but underlying evidence indicates the obligation and liquidation occurred subsequent to period of performance dates in FINET. See Finding 1.
• We could not properly test reported total cumulative obligations for either report because they were not properly documented. FINET does not track obligations and as such, reported obligations are manually included for reporting.
• GOPB did not maintain appropriate internal control separation of duties between preparation and review.
The Treasury’s guidance indicates that the “prime recipient’s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient’s accounting system.” Additionally, the OIG FAQs on reporting and recordkeeping describe the need to correct errors or modifications in a timely manner and to report actual obligations and expenditures rather than estimates.
GOPB relied on state agencies to properly code expenditures and to have a proper understanding of the appropriate use of funds. The data in FINET and expenditures reported drastically differed due to these coding differences and required manual adjustments that were not properly documented. GOPB personnel did not prioritize the reconciliation of FINET expenditures and obligations to those reported because of other duties, time constraints, and priorities. In addition to the failure to properly code and track expenditures, an untimely reconciliation and lack of appropriate separation of duties to prepare and review reports can lead GOPB to significantly misreport expenditures, misidentify errors, and miscalculate obligations of funds to be returned to the Treasury, if any.
Recommendations:
We recommend the following to GOPB:
• Perform a reconciliation of reported and actual expenditures in FINET from fiscal years 2021 – 2023 as it closes out the CRF.
• Perform a reconciliation of FEMA reimbursements with reported and actual expenditures to ensure expenditures were not charged to both programs.
• Ensure adequate documentation of expenditures, obligations, and adjustments exist as part of closing out the CRF.
GOPB’s Response:
GOPB agrees with this finding. GOPB acknowledges that because of complexities in coding and tracking during fiscal years 2020 to 2023 and a ten-day federal reporting deadline, not all reported expenditures were reconciled before quarterly reports were submitted. Between July 2022 and January 2023, GOPB made significant progress by compiling and reconciling a master CRF expenditure file. After completing a final reconciliation for the September 31, 2023, CRF quarterly report, GOPB is confident every transaction reported to the Department of the Treasury, including adjustments for FEMA reimbursements and other recategorizations, is reconciled with FINET data.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-009
DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete.
Recommendations:
We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process.
DHHS’s Response
The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-009
DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete.
Recommendations:
We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process.
DHHS’s Response
The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-009
DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete.
Recommendations:
We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process.
DHHS’s Response
The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-009
DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete.
Recommendations:
We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process.
DHHS’s Response
The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-008. Noncompliance with Timing of Health and Safety Surveys
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
12 of the 14 facilities sampled for Medicaid Health and Safety Surveys were performed between 18.63 months and 59.5 months, including 10 sampled facilities over 28 months, from the last survey date. Federal regulation 42 CFR 442.15 requires that surveys of facilities are to be conducted “to determine compliance with the requirements at a survey interval of no greater than 15 months.” According to DHHS, the surveys were backlogged due to the COVID-19 pandemic, in addition to a staffing shortage amidst a hiring freeze. The existing staff was unable to maintain regular certifications and address the backlog within the required timeline. If surveys are not completed, facilities could become noncompliant with health and safety requirements without detection, thus potentially endangering patients.
Recommendations:
We recommend DHHS create a plan to clear the backlog and maintain proper timing to complete the Health and Safety Survey.
DHHS’s Response:
The Division of Licensing and Background Checks (DLBC), Office of Licensing (OL) agrees with this finding and recommendation.
2023-008. Noncompliance with Timing of Health and Safety Surveys
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
12 of the 14 facilities sampled for Medicaid Health and Safety Surveys were performed between 18.63 months and 59.5 months, including 10 sampled facilities over 28 months, from the last survey date. Federal regulation 42 CFR 442.15 requires that surveys of facilities are to be conducted “to determine compliance with the requirements at a survey interval of no greater than 15 months.” According to DHHS, the surveys were backlogged due to the COVID-19 pandemic, in addition to a staffing shortage amidst a hiring freeze. The existing staff was unable to maintain regular certifications and address the backlog within the required timeline. If surveys are not completed, facilities could become noncompliant with health and safety requirements without detection, thus potentially endangering patients.
Recommendations:
We recommend DHHS create a plan to clear the backlog and maintain proper timing to complete the Health and Safety Survey.
DHHS’s Response:
The Division of Licensing and Background Checks (DLBC), Office of Licensing (OL) agrees with this finding and recommendation.
2023-008. Noncompliance with Timing of Health and Safety Surveys
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
12 of the 14 facilities sampled for Medicaid Health and Safety Surveys were performed between 18.63 months and 59.5 months, including 10 sampled facilities over 28 months, from the last survey date. Federal regulation 42 CFR 442.15 requires that surveys of facilities are to be conducted “to determine compliance with the requirements at a survey interval of no greater than 15 months.” According to DHHS, the surveys were backlogged due to the COVID-19 pandemic, in addition to a staffing shortage amidst a hiring freeze. The existing staff was unable to maintain regular certifications and address the backlog within the required timeline. If surveys are not completed, facilities could become noncompliant with health and safety requirements without detection, thus potentially endangering patients.
Recommendations:
We recommend DHHS create a plan to clear the backlog and maintain proper timing to complete the Health and Safety Survey.
DHHS’s Response:
The Division of Licensing and Background Checks (DLBC), Office of Licensing (OL) agrees with this finding and recommendation.
2023-008. Noncompliance with Timing of Health and Safety Surveys
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
12 of the 14 facilities sampled for Medicaid Health and Safety Surveys were performed between 18.63 months and 59.5 months, including 10 sampled facilities over 28 months, from the last survey date. Federal regulation 42 CFR 442.15 requires that surveys of facilities are to be conducted “to determine compliance with the requirements at a survey interval of no greater than 15 months.” According to DHHS, the surveys were backlogged due to the COVID-19 pandemic, in addition to a staffing shortage amidst a hiring freeze. The existing staff was unable to maintain regular certifications and address the backlog within the required timeline. If surveys are not completed, facilities could become noncompliant with health and safety requirements without detection, thus potentially endangering patients.
Recommendations:
We recommend DHHS create a plan to clear the backlog and maintain proper timing to complete the Health and Safety Survey.
DHHS’s Response:
The Division of Licensing and Background Checks (DLBC), Office of Licensing (OL) agrees with this finding and recommendation.
2023-009. Untimely Implementation of Provider Eligibility Requirement Changes
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
DHHS did not properly review and approve 1 of 42 Medicaid provider applications reviewed during the audit. Per Federal regulations (2 CFR 455 Subpart E), providers must be screened, and their license and certifications must be verified before they are initially validated or revalidated. Effective July 1, 2021, requirements for Case Managers provider group were updated to require a Case Manager Certificate to be eligible for providing Medicaid services. Because DHHS did not implement the requirement in the system until June 15, 2022, the system did not have the proper criteria to determine provider eligibility during the period of delayed implementation. As a result, DHHS risks using Medicaid funds on ineligible providers.
Recommendations:
We recommend that DHHS implement procedures to ensure that eligibility requirements are implemented promptly after new eligibility requirements are announced by State Medicaid.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Medicaid Operations (OMO) agrees with this finding and recommendation.
2023-009. Untimely Implementation of Provider Eligibility Requirement Changes
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
DHHS did not properly review and approve 1 of 42 Medicaid provider applications reviewed during the audit. Per Federal regulations (2 CFR 455 Subpart E), providers must be screened, and their license and certifications must be verified before they are initially validated or revalidated. Effective July 1, 2021, requirements for Case Managers provider group were updated to require a Case Manager Certificate to be eligible for providing Medicaid services. Because DHHS did not implement the requirement in the system until June 15, 2022, the system did not have the proper criteria to determine provider eligibility during the period of delayed implementation. As a result, DHHS risks using Medicaid funds on ineligible providers.
Recommendations:
We recommend that DHHS implement procedures to ensure that eligibility requirements are implemented promptly after new eligibility requirements are announced by State Medicaid.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Medicaid Operations (OMO) agrees with this finding and recommendation.
2023-009. Untimely Implementation of Provider Eligibility Requirement Changes
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
DHHS did not properly review and approve 1 of 42 Medicaid provider applications reviewed during the audit. Per Federal regulations (2 CFR 455 Subpart E), providers must be screened, and their license and certifications must be verified before they are initially validated or revalidated. Effective July 1, 2021, requirements for Case Managers provider group were updated to require a Case Manager Certificate to be eligible for providing Medicaid services. Because DHHS did not implement the requirement in the system until June 15, 2022, the system did not have the proper criteria to determine provider eligibility during the period of delayed implementation. As a result, DHHS risks using Medicaid funds on ineligible providers.
Recommendations:
We recommend that DHHS implement procedures to ensure that eligibility requirements are implemented promptly after new eligibility requirements are announced by State Medicaid.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Medicaid Operations (OMO) agrees with this finding and recommendation.
2023-009. Untimely Implementation of Provider Eligibility Requirement Changes
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
DHHS did not properly review and approve 1 of 42 Medicaid provider applications reviewed during the audit. Per Federal regulations (2 CFR 455 Subpart E), providers must be screened, and their license and certifications must be verified before they are initially validated or revalidated. Effective July 1, 2021, requirements for Case Managers provider group were updated to require a Case Manager Certificate to be eligible for providing Medicaid services. Because DHHS did not implement the requirement in the system until June 15, 2022, the system did not have the proper criteria to determine provider eligibility during the period of delayed implementation. As a result, DHHS risks using Medicaid funds on ineligible providers.
Recommendations:
We recommend that DHHS implement procedures to ensure that eligibility requirements are implemented promptly after new eligibility requirements are announced by State Medicaid.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Medicaid Operations (OMO) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the federal awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance.
Recommendations:
We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the federal awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance.
Recommendations:
We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the federal awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance.
Recommendations:
We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the federal awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance.
Recommendations:
We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-005. Foster Care Eligibility Reviews Not Adequately Completed
Utah Department of Health and Human Services
(Finding Type: Material Internal Control Weakness)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.658 Foster Care Title IV-E
Federal Award Number: 2201UTFOST
2301UTFOST
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-006
For 17 of 60 (28%) cases reviewed, there was no evidence that DHHS had reviewed the initial Title IV-E Foster Care eligibility decisions. Federal regulation 2 CFR 200.303 requires that “the non-federal entity must establish and maintain effective internal control over the Federal award 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.”
In response to a prior year audit finding, DHHS hired an employee in January 2023 to complete the review of eligibility determination. However, the review only covered new cases initiated during the current year, but not the existing cases initiated in prior years. These existing cases have never been reviewed to ensure proper eligibility decisions were made. However, benefit payments were incurred and paid during the year. Given the large number of cases requiring eligibility decisions the current team receives, the control was not properly designed and implemented to complete these reviews in a timely manner. Unreviewed or untimely reviews of eligibility decisions could lead to improper eligibility determinations and inappropriate benefit payments.
Recommendations:
We recommend DHHS allocate sufficient resources to expand the existing review or modify the control to ensure eligibility decisions are reviewed in a timely manner.
DHHS’s Response
The department acknowledges the need for continuous effort on the internal control assessment and reasonable implementation for this area. Procedures exist and review was performed to assist with proper IV-E eligibility determination.
2023-005. Foster Care Eligibility Reviews Not Adequately Completed
Utah Department of Health and Human Services
(Finding Type: Material Internal Control Weakness)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.658 Foster Care Title IV-E
Federal Award Number: 2201UTFOST
2301UTFOST
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-006
For 17 of 60 (28%) cases reviewed, there was no evidence that DHHS had reviewed the initial Title IV-E Foster Care eligibility decisions. Federal regulation 2 CFR 200.303 requires that “the non-federal entity must establish and maintain effective internal control over the Federal award 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.”
In response to a prior year audit finding, DHHS hired an employee in January 2023 to complete the review of eligibility determination. However, the review only covered new cases initiated during the current year, but not the existing cases initiated in prior years. These existing cases have never been reviewed to ensure proper eligibility decisions were made. However, benefit payments were incurred and paid during the year. Given the large number of cases requiring eligibility decisions the current team receives, the control was not properly designed and implemented to complete these reviews in a timely manner. Unreviewed or untimely reviews of eligibility decisions could lead to improper eligibility determinations and inappropriate benefit payments.
Recommendations:
We recommend DHHS allocate sufficient resources to expand the existing review or modify the control to ensure eligibility decisions are reviewed in a timely manner.
DHHS’s Response
The department acknowledges the need for continuous effort on the internal control assessment and reasonable implementation for this area. Procedures exist and review was performed to assist with proper IV-E eligibility determination.
2023-006. Lack of Controls over Food Benefit Payments
Utah Department of Health and Human Services
(Finding Type: Material Internal Control Weakness)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 10.557 Women Infants & Children
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
DHHS did not verify food benefit expenditure detail received from its third-party service organization, along with request for reimbursing program funds, to ensure expenditures were made for allowable activities and costs before making payment. Federal regulation 2 CFR 200.303 states that “the non-federal entity must establish and maintain effective internal control over the Federal award 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.” DHHS has controls in place to ensure that benefit distribution information, such as eligible participants and food plans, is properly sent to its third-party service organization. However, DHHS did not verify the third-party service organization’s expenditure details to ensure that benefit payments made were in compliance with the allowable costs and allowable activities requirements before reimbursement. As a result, inaccurate, incomplete, or false payments may be paid without detection.
Recommendations:
We recommend DHHS establish a system of reviewing its third-party service organization’s expenditure details to ensure that program funds are paid for allowable activities and costs.
DHHS’s Response:
The department recognizes the need to review food benefit expenditure information received from the WIC third-party host processing vendor. WIC procedures are established which support proper performance for food benefit redemption.
2023-020. Working Capital Reserves in Excess of Federal Guidelines
Department of Government Operations
(Finding Type: Reportable Noncompliance)
Federal Agency: Various
Assistance Listing Number and Title: Various
Federal Award Number: Various
Questioned Costs: Undeterminable
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-027, 2021-025, 2020-036; 2019-023; 2018-033; 2017-021; 2016-037; 2015-048; 2014-040; 2013-049; 2012 12-51; 2011 11-56
As of June 30, 2023, five divisions within DGO held working capital reserves in excess of federal guidelines of at least the amounts that follow: (see table in text) The following divisions do not have excess reserves at the internal service fund level; however, the federal oversight agency requires them to be assessed at the service area level, which resulted in excess reserves as follows: (See table in text) 2 CFR part 200, Appendix V, paragraph G.2, generally allows a working capital reserve as part of retained earnings of up to 60 days’ cash expenses for normal operating purposes in each internal service fund. For DTS, the federal oversight agency only allows 45 days. The excess reserves were due to the inherent difficulty of accurately estimating expenses when setting rates. Excess reserves could result in a federal liability since federal programs share an interest in the reserves.
Recommendation:
Depending on the business requirements, we recommend each division within DGO reduce excess working capital reserves within each of the respective funds or service areas.
DGO’s Response and Corrective Action Plan:
Division of Purchasing and General Services
Cooperative Contract Management Fund – Public entities in Utah rely on the Division of Purchasing and General Services (State Purchasing) to maintain the cooperative contract program to assist with public procurement in Utah. The usage of state cooperative contracts by public entities continues to increase yearly, resulting in a corresponding increase in the collection of administrative fees. State Purchasing continues to review contract administrative fees on state cooperative contracts as each contract expires and is resolicited. This is a slow process since State Purchasing has approximately 1,200 cooperative contracts that expire only every five years and are then resolicited. While State Purchasing is allowed under law to collect up to a 1.0% administrative fee on each cooperative contract, currently the average administrative fee is approximately 0.35%, a decrease of 18.6% from the average contract administrative fee in fiscal year 2022.
The Division of Purchasing and General Services also continues to work with the Department of Government Operations executive leadership to request the Utah Legislature appropriate out a portion of the excess reserves in the Cooperative Contract Management Fund. The calculation of the federal portion of these transfers will be submitted to Cost Allocation Services for review and approval when these transfers are completed.
Federal Surplus Property Fund- Surplus Property anticipated relocating by the end of fiscal year 2023 with the completion of the new Utah State Prison. Due to schedule changes, the new location for Surplus Property was not completed in time and the new anticipated relocation date is the end of fiscal year 2025. At the time of relocation, Surplus Property will use the excess reserve funds to move and furnish the new location, including replacing aged equipment.
Division of Finance
Purchasing Card Fund – State Finance is in the process of implementing a new travel and expense reporting system for all state agencies. This system will simplify travel approvals, travel reimbursements, and reduce the administrative burden for the purchasing card (P-Card) expense reports on state agency personnel. To cover system implementation costs, State Finance elected not to distribute the rebates received from U.S. Bank related to state agency P-Card spending for calendar years 2021, 2022, and 2023. Rebates were still sent to participating entities external to the primary government. The anticipated completion date for the new system is the end of the calendar year 2024. State Finance will then review annually the costs of the system, develop a cost allocation strategy between the travel and P-Card programs, and adjust travel rates to cover the travel program's ongoing costs. The P-Card program will then distribute any remaining P-Card rebates to state agencies respective to their spend. This effort should reduce and/or eliminate any excess federal reserves in the P-Card fund by the end of fiscal year 2025.
Division of Risk Management
Workers' Compensation Fund – The Division of Risk Management did not request an increase in rates for fiscal year 2024 for the Workers Compensation Fund. It is also anticipated that premiums for worker compensation insurance for fiscal year 2025 will increase. This increase will help bring this fund back into compliance. The Division of Risk Management will also reevaluate this program at the end of fiscal year 2024 to determine if a legislative request to transfer funds out and/or refund the federal portion of retained earnings is needed to reduce and/or eliminate the excess federal reserves remaining in this fund.
Division of Technology Services
Communication Services – The fiscal year 2024 Communication Services rate was set to under recover the cost of providing this service by $276,000. The fiscal year 2025 rate was also set to under recover the cost of providing this service by an additional $398,000. DTS plans to annually review and adjust rates and issue mid-year rebates, if necessary, to bring DTS Communication Services into compliance with federal excess reserve guidelines by the end of fiscal year 2025.
Mainframe Services – This service will be coming to an end by fiscal year 2024. As this service ends, DTS will issue rebates of any remaining Mainframe Services retained earnings to the state agencies who used the system.
Division of Human Resource Management
Human Resources Field Services – During fiscal year 2023, the Division of Human Resource Management worked to better align expenses with the corresponding rate. A cost allocation plan was developed to accomplish this goal. As a result of that effort, the Human Resources Field Services rate was decreased, and the Payroll Services and Core Services rates were increased for fiscal year 2025. The Division anticipates that these rate adjustments will eliminate the excess reserves.
Public Employees Health Plan
(Finding Type: Reportable Noncompliance)
Federal Agency: Various
Assistance Listing Number and Title: Various
Federal Award Number: Various
Questioned Costs: Undeterminable
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-028; 2021-026; 2020-039; 2019-026; 2018-036; 2017-023; 2016-039; 2015-050; 2014-042; 2013-050; 2012 12-53; 2011 11-58
As of June 30, 2023, PEHP held working capital reserves in excess of federal guidelines as follows below. (see text for table) 2 CFR part 200, Appendix V, paragraph G.2, generally allows a working capital reserve as part of retained earnings of up to 60 days cash expenses for normal operating purposes. The inherent difficulty of accurately estimating expenses led to excess reserves. Excess reserves could result in a federal liability since federal programs share an interest in the reserves.
Recommendations:
Depending on the business requirements, we recommend that PEHP reduce excess working capital reserves to a level allowed by federal regulations.
PEHP’s Response:
Long Term Disability
We agree that the program holds working capital reserves more than the federal guidelines.
State Dental
We agree that the program holds working capital reserves more than the federal guidelines.
Medicare Supplement
We agree that the program holds working capital reserves more than the federal guidelines.
2023-011. Improper Acceptance of Materials Due to Lack of Effective Internal Controls Over the Quality Assurance Program
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
23 CFR Section 637 requires UDOT to follow an approved Quality Assurance Program (QAP) to assure the quality of materials and construction of all Federal-aid highway projects. For 7 of 40 (17.5%) items reviewed, the Resident Engineer accepted construction materials that were not tested in compliance with UDOT’s QAP as approved by the Federal Highway Administration.
Section 1010-1015 of UDOT’s Materials Manual of Instruction describes UDOT’s QAP, and states that materials acceptance decisions for applicable materials must be based on manufacturer information, or sampling and testing procedures performed by qualified testing personnel. Qualified testing personnel must pass two independent assurance (IA) tests each calendar year for each certification area, and one test must be a split sample.
In our testing of 40 accepted materials covered by the QAP, we noted the following errors: (see file for table) These erroneous acceptance decisions and the inconsistent applications of the QAP occurred because internal controls were not adequate to ensure UDOT personnel fully understood the elements of the QAP.
The lack of understanding and the inconsistent application of the QAP could result in inferior construction materials and workmanship being accepted, paid for, and used on UDOT projects.
Recommendation:
We recommend that UDOT strengthen its internal controls to ensure that all relevant personnel are properly trained and familiar with the QAP requirements, and that they apply those requirements consistently.
UDOT’s Response:
Concur
2023-011. Improper Acceptance of Materials Due to Lack of Effective Internal Controls Over the Quality Assurance Program
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
23 CFR Section 637 requires UDOT to follow an approved Quality Assurance Program (QAP) to assure the quality of materials and construction of all Federal-aid highway projects. For 7 of 40 (17.5%) items reviewed, the Resident Engineer accepted construction materials that were not tested in compliance with UDOT’s QAP as approved by the Federal Highway Administration.
Section 1010-1015 of UDOT’s Materials Manual of Instruction describes UDOT’s QAP, and states that materials acceptance decisions for applicable materials must be based on manufacturer information, or sampling and testing procedures performed by qualified testing personnel. Qualified testing personnel must pass two independent assurance (IA) tests each calendar year for each certification area, and one test must be a split sample.
In our testing of 40 accepted materials covered by the QAP, we noted the following errors: (see file for table) These erroneous acceptance decisions and the inconsistent applications of the QAP occurred because internal controls were not adequate to ensure UDOT personnel fully understood the elements of the QAP.
The lack of understanding and the inconsistent application of the QAP could result in inferior construction materials and workmanship being accepted, paid for, and used on UDOT projects.
Recommendation:
We recommend that UDOT strengthen its internal controls to ensure that all relevant personnel are properly trained and familiar with the QAP requirements, and that they apply those requirements consistently.
UDOT’s Response:
Concur
2023-012. Noncompliance Resulting from the Failure to Implement Effective Internal Controls Over Value Engineering Program
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
UDOT has not implemented effective internal controls over their Value Engineering (VE) Program to ensure VE analyses are properly performed on all applicable projects in accordance with federal requirements and UDOT policy and procedures. Consequently, UDOT was unable to provide evidence of the following VE program requirements:
• VE analyses are being completed on all applicable projects; and
• Proper documentation, assessment, and reporting of the completed VE analyses.
23 CFR Part 627.7a(5) “The [State Transportation Agency’s (STA)] VE program shall: Establish and document policies, procedures, and controls to ensure a VE analysis is conducted and all approved recommendations are implemented for all applicable projects administered by local public agencies; and ensure the results of these analyses are included in the VE program monitoring and reporting.”
The issues noted above are the result of inconsistent staff training and inadequate resources to run the expanding VE program effectively. Without appropriate internal controls, VE may not be performed for all applicable projects and approved recommendations identified from VE may not be incorporated into the plans, specifications, and estimates of projects.
Recommendation:
We recommend that UDOT implement effective internal controls and ensure staff over their VE Program are properly trained and have adequate resources to ensure compliance with Federal requirements and UDOT policy.
UDOT’s Response:
Concur
2023-012. Noncompliance Resulting from the Failure to Implement Effective Internal Controls Over Value Engineering Program
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
UDOT has not implemented effective internal controls over their Value Engineering (VE) Program to ensure VE analyses are properly performed on all applicable projects in accordance with federal requirements and UDOT policy and procedures. Consequently, UDOT was unable to provide evidence of the following VE program requirements:
• VE analyses are being completed on all applicable projects; and
• Proper documentation, assessment, and reporting of the completed VE analyses.
23 CFR Part 627.7a(5) “The [State Transportation Agency’s (STA)] VE program shall: Establish and document policies, procedures, and controls to ensure a VE analysis is conducted and all approved recommendations are implemented for all applicable projects administered by local public agencies; and ensure the results of these analyses are included in the VE program monitoring and reporting.”
The issues noted above are the result of inconsistent staff training and inadequate resources to run the expanding VE program effectively. Without appropriate internal controls, VE may not be performed for all applicable projects and approved recommendations identified from VE may not be incorporated into the plans, specifications, and estimates of projects.
Recommendation:
We recommend that UDOT implement effective internal controls and ensure staff over their VE Program are properly trained and have adequate resources to ensure compliance with Federal requirements and UDOT policy.
UDOT’s Response:
Concur
2023-013. Improper Reimbursement of Utility Expenditures Due to Lack of Effective Internal Controls
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: $27,559
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
UDOT improperly reimbursed utility expenditures for two projects prior to the utility agreements being approved by UDOT and the utility company and prior to completion of the work. 23 CFR Section 645.113(g)(3)) requires a utility agreement to be approved prior to the utility incurring any costs or conducting any work that would be eligible for reimbursement. In addition, 23 CFR Section 645.107(a)) requires reimbursement of utility costs to occur after the work is completed. The expenditures on these projects were paid improperly because UDOT has not implemented effective internal controls over utility reimbursements, personnel did not fully understand the Federal reimbursement requirements, and the Utility companies required UDOT to pay for their costs upfront prior to performing any work. Due to improperly approving and reimbursing expenditures before requirements were met, we are questioning the associated costs for the two projects for the amount of $27,559.
Recommendation:
We recommend that UDOT implement effective internal controls and follow Federal requirements for the reimbursement of utility costs.
UDOT’s Response:
Concur
2023-013. Improper Reimbursement of Utility Expenditures Due to Lack of Effective Internal Controls
Utah Department of Transportation
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Transportation
Assistance Listing Number and Title: 20.205 Highway Planning and Construction
Federal Award Number: Various
Questioned Costs: $27,559
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
UDOT improperly reimbursed utility expenditures for two projects prior to the utility agreements being approved by UDOT and the utility company and prior to completion of the work. 23 CFR Section 645.113(g)(3)) requires a utility agreement to be approved prior to the utility incurring any costs or conducting any work that would be eligible for reimbursement. In addition, 23 CFR Section 645.107(a)) requires reimbursement of utility costs to occur after the work is completed. The expenditures on these projects were paid improperly because UDOT has not implemented effective internal controls over utility reimbursements, personnel did not fully understand the Federal reimbursement requirements, and the Utility companies required UDOT to pay for their costs upfront prior to performing any work. Due to improperly approving and reimbursing expenditures before requirements were met, we are questioning the associated costs for the two projects for the amount of $27,559.
Recommendation:
We recommend that UDOT implement effective internal controls and follow Federal requirements for the reimbursement of utility costs.
UDOT’s Response:
Concur
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-003. USBE Did Not Properly Report All Required Subawards in the Federal Reporting System
Utah State Board of Education
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Agriculture
Assistance Listing Number and Title: Child Nutrition Cluster (ALN 10.553, 10.555,10.556, 10.559, 10,582)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
USBE did not properly report all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Federal regulations (2 CFR Appendix-A-to-Part-170 a) require that USBE “report each action that equals or exceeds $30,000 in Federal funds for a subaward.” We reviewed a sample of 40 Child Nutrition Program cluster (CNP) subawards to ensure that they were properly reported in FSRS. Of the 40 awards, 7 were not reported. The following table details the errors detected: (See text for table) If these errors were projected to the entire population, they would impact 178 subawards totaling $34,282,399. These errors were the result of problems with the data template USBE used to gather and submit the data. USBE personnel perform monthly reconciliations to ensure all subawards are properly uploaded to FSRS. However, the same template problems also impacted the review process, so USBE did not detect these issues. Incorrectly reported data could allow data users to reach improper conclusions which could alter decision making.
Recommendation:
We recommend that USBE ensure it accurately reports all first-tier subawards in a timely manner.
USBE’s Response:
The USBE agrees with this finding.
2023-015. Obligation of CRF Funds Not Completed Within Proper Timeframe
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
On August 3, 2022, the Governor’s Office of Planning and Budget (GOPB) obligated approximately $48 million of Coronavirus Relief Funds (CRF), seven months past the final obligation date of December 31, 2021. GOPB subsequently expended the funds on December 30, 2022, three months after the final obligation liquidation date of September 30, 2022 due to delays in FEMA reimbursements received after this date.¬¬
The US Department of the Treasury’s (Treasury) program guidance indicates payments from CRF “may only be used to cover costs that were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.” The Treasury further revised its definition of “incurred” as of December 14, 2021, to align with Uniform Guidance’s definition of obligation (2 CFR 200.1). This means an order should be placed for property and services or entering into contracts, subawards, and similar transactions that require payment by December 31, 2021 to properly obligate CRF funds. In addition, the Treasury’s revised guidance clarified that recipients “are required to expend their funds received from the CRF to cover these obligations by September 30, 2022.” Regarding FEMA reimbursements, the Prime Recipient Quarterly Grant Solutions Closeout Procedure Guide, which was issued by the Treasury Office of Inspector General (OIG) on February 14, 2022, states that “a prime recipient should refer to Treasury’s guidance when applying CRF proceeds, which are freed up as a result of FEMA’s 100 percent Federal cost share coverage, to other eligible uses under the CARES Act.”
Facing the deadlines to close out CRF or lose funding, GOPB used the funds without appropriately adhering to the obligation and liquidation dates provided in the written guidance issued by the Treasury, including after-the-fact FEMA reimbursements. Failure to follow Treasury’s written period of performance guidance for timely obligation and liquidation of funds may jeopardize the use of funding and require repayment by the State. We considered GOPB’s use of the $48 million to ultimately be for eligible purposes under CRF’s allowable activities. As such, we did not question these costs.
Recommendation:
We recommend GOPB follow the Treasury’s written period of performance guidance with regard to obligation and liquidation of funds as it closes out the CRF program.
GOPB’s Response:
GOPB agrees with the basis for this finding. GOPB followed an alternative interpretation of the Treasury's CRF guidance regarding the use of CRF proceeds for costs incurred in response to correspondence with the U.S. Treasury. It was believed actions taken were reasonable based on that correspondence and Treasury’s Closeout Procedures Guide.
After the enactment of the CARES Act, the Treasury Department updated guidance on costs incurred multiple times, including with the CRF Guidance Revision Regarding Cost Incurred on December 14, 2021. Based on a review of Treasury guidance and an email exchange between GOPB and the Treasury Office of Inspector General in September 2022, GOPB updated quarterly CRF reports to reallocate CRF proceeds freed up as a result of FEMA reimbursements to other eligible costs incurred prior to December 31, 2021. Those reallocated costs were incurred prior to December 31, 2021 and were eligible CRF obligations and expenditures, even if the state didn’t ultimately determine it would use CRF proceeds to cover those costs until the December 2022 reporting period.
2023-015. Obligation of CRF Funds Not Completed Within Proper Timeframe
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
On August 3, 2022, the Governor’s Office of Planning and Budget (GOPB) obligated approximately $48 million of Coronavirus Relief Funds (CRF), seven months past the final obligation date of December 31, 2021. GOPB subsequently expended the funds on December 30, 2022, three months after the final obligation liquidation date of September 30, 2022 due to delays in FEMA reimbursements received after this date.¬¬
The US Department of the Treasury’s (Treasury) program guidance indicates payments from CRF “may only be used to cover costs that were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.” The Treasury further revised its definition of “incurred” as of December 14, 2021, to align with Uniform Guidance’s definition of obligation (2 CFR 200.1). This means an order should be placed for property and services or entering into contracts, subawards, and similar transactions that require payment by December 31, 2021 to properly obligate CRF funds. In addition, the Treasury’s revised guidance clarified that recipients “are required to expend their funds received from the CRF to cover these obligations by September 30, 2022.” Regarding FEMA reimbursements, the Prime Recipient Quarterly Grant Solutions Closeout Procedure Guide, which was issued by the Treasury Office of Inspector General (OIG) on February 14, 2022, states that “a prime recipient should refer to Treasury’s guidance when applying CRF proceeds, which are freed up as a result of FEMA’s 100 percent Federal cost share coverage, to other eligible uses under the CARES Act.”
Facing the deadlines to close out CRF or lose funding, GOPB used the funds without appropriately adhering to the obligation and liquidation dates provided in the written guidance issued by the Treasury, including after-the-fact FEMA reimbursements. Failure to follow Treasury’s written period of performance guidance for timely obligation and liquidation of funds may jeopardize the use of funding and require repayment by the State. We considered GOPB’s use of the $48 million to ultimately be for eligible purposes under CRF’s allowable activities. As such, we did not question these costs.
Recommendation:
We recommend GOPB follow the Treasury’s written period of performance guidance with regard to obligation and liquidation of funds as it closes out the CRF program.
GOPB’s Response:
GOPB agrees with the basis for this finding. GOPB followed an alternative interpretation of the Treasury's CRF guidance regarding the use of CRF proceeds for costs incurred in response to correspondence with the U.S. Treasury. It was believed actions taken were reasonable based on that correspondence and Treasury’s Closeout Procedures Guide.
After the enactment of the CARES Act, the Treasury Department updated guidance on costs incurred multiple times, including with the CRF Guidance Revision Regarding Cost Incurred on December 14, 2021. Based on a review of Treasury guidance and an email exchange between GOPB and the Treasury Office of Inspector General in September 2022, GOPB updated quarterly CRF reports to reallocate CRF proceeds freed up as a result of FEMA reimbursements to other eligible costs incurred prior to December 31, 2021. Those reallocated costs were incurred prior to December 31, 2021 and were eligible CRF obligations and expenditures, even if the state didn’t ultimately determine it would use CRF proceeds to cover those costs until the December 2022 reporting period.
2023-015. Obligation of CRF Funds Not Completed Within Proper Timeframe
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
On August 3, 2022, the Governor’s Office of Planning and Budget (GOPB) obligated approximately $48 million of Coronavirus Relief Funds (CRF), seven months past the final obligation date of December 31, 2021. GOPB subsequently expended the funds on December 30, 2022, three months after the final obligation liquidation date of September 30, 2022 due to delays in FEMA reimbursements received after this date.¬¬
The US Department of the Treasury’s (Treasury) program guidance indicates payments from CRF “may only be used to cover costs that were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.” The Treasury further revised its definition of “incurred” as of December 14, 2021, to align with Uniform Guidance’s definition of obligation (2 CFR 200.1). This means an order should be placed for property and services or entering into contracts, subawards, and similar transactions that require payment by December 31, 2021 to properly obligate CRF funds. In addition, the Treasury’s revised guidance clarified that recipients “are required to expend their funds received from the CRF to cover these obligations by September 30, 2022.” Regarding FEMA reimbursements, the Prime Recipient Quarterly Grant Solutions Closeout Procedure Guide, which was issued by the Treasury Office of Inspector General (OIG) on February 14, 2022, states that “a prime recipient should refer to Treasury’s guidance when applying CRF proceeds, which are freed up as a result of FEMA’s 100 percent Federal cost share coverage, to other eligible uses under the CARES Act.”
Facing the deadlines to close out CRF or lose funding, GOPB used the funds without appropriately adhering to the obligation and liquidation dates provided in the written guidance issued by the Treasury, including after-the-fact FEMA reimbursements. Failure to follow Treasury’s written period of performance guidance for timely obligation and liquidation of funds may jeopardize the use of funding and require repayment by the State. We considered GOPB’s use of the $48 million to ultimately be for eligible purposes under CRF’s allowable activities. As such, we did not question these costs.
Recommendation:
We recommend GOPB follow the Treasury’s written period of performance guidance with regard to obligation and liquidation of funds as it closes out the CRF program.
GOPB’s Response:
GOPB agrees with the basis for this finding. GOPB followed an alternative interpretation of the Treasury's CRF guidance regarding the use of CRF proceeds for costs incurred in response to correspondence with the U.S. Treasury. It was believed actions taken were reasonable based on that correspondence and Treasury’s Closeout Procedures Guide.
After the enactment of the CARES Act, the Treasury Department updated guidance on costs incurred multiple times, including with the CRF Guidance Revision Regarding Cost Incurred on December 14, 2021. Based on a review of Treasury guidance and an email exchange between GOPB and the Treasury Office of Inspector General in September 2022, GOPB updated quarterly CRF reports to reallocate CRF proceeds freed up as a result of FEMA reimbursements to other eligible costs incurred prior to December 31, 2021. Those reallocated costs were incurred prior to December 31, 2021 and were eligible CRF obligations and expenditures, even if the state didn’t ultimately determine it would use CRF proceeds to cover those costs until the December 2022 reporting period.
2023-015. Obligation of CRF Funds Not Completed Within Proper Timeframe
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
On August 3, 2022, the Governor’s Office of Planning and Budget (GOPB) obligated approximately $48 million of Coronavirus Relief Funds (CRF), seven months past the final obligation date of December 31, 2021. GOPB subsequently expended the funds on December 30, 2022, three months after the final obligation liquidation date of September 30, 2022 due to delays in FEMA reimbursements received after this date.¬¬
The US Department of the Treasury’s (Treasury) program guidance indicates payments from CRF “may only be used to cover costs that were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.” The Treasury further revised its definition of “incurred” as of December 14, 2021, to align with Uniform Guidance’s definition of obligation (2 CFR 200.1). This means an order should be placed for property and services or entering into contracts, subawards, and similar transactions that require payment by December 31, 2021 to properly obligate CRF funds. In addition, the Treasury’s revised guidance clarified that recipients “are required to expend their funds received from the CRF to cover these obligations by September 30, 2022.” Regarding FEMA reimbursements, the Prime Recipient Quarterly Grant Solutions Closeout Procedure Guide, which was issued by the Treasury Office of Inspector General (OIG) on February 14, 2022, states that “a prime recipient should refer to Treasury’s guidance when applying CRF proceeds, which are freed up as a result of FEMA’s 100 percent Federal cost share coverage, to other eligible uses under the CARES Act.”
Facing the deadlines to close out CRF or lose funding, GOPB used the funds without appropriately adhering to the obligation and liquidation dates provided in the written guidance issued by the Treasury, including after-the-fact FEMA reimbursements. Failure to follow Treasury’s written period of performance guidance for timely obligation and liquidation of funds may jeopardize the use of funding and require repayment by the State. We considered GOPB’s use of the $48 million to ultimately be for eligible purposes under CRF’s allowable activities. As such, we did not question these costs.
Recommendation:
We recommend GOPB follow the Treasury’s written period of performance guidance with regard to obligation and liquidation of funds as it closes out the CRF program.
GOPB’s Response:
GOPB agrees with the basis for this finding. GOPB followed an alternative interpretation of the Treasury's CRF guidance regarding the use of CRF proceeds for costs incurred in response to correspondence with the U.S. Treasury. It was believed actions taken were reasonable based on that correspondence and Treasury’s Closeout Procedures Guide.
After the enactment of the CARES Act, the Treasury Department updated guidance on costs incurred multiple times, including with the CRF Guidance Revision Regarding Cost Incurred on December 14, 2021. Based on a review of Treasury guidance and an email exchange between GOPB and the Treasury Office of Inspector General in September 2022, GOPB updated quarterly CRF reports to reallocate CRF proceeds freed up as a result of FEMA reimbursements to other eligible costs incurred prior to December 31, 2021. Those reallocated costs were incurred prior to December 31, 2021 and were eligible CRF obligations and expenditures, even if the state didn’t ultimately determine it would use CRF proceeds to cover those costs until the December 2022 reporting period.
2023-015. Obligation of CRF Funds Not Completed Within Proper Timeframe
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
On August 3, 2022, the Governor’s Office of Planning and Budget (GOPB) obligated approximately $48 million of Coronavirus Relief Funds (CRF), seven months past the final obligation date of December 31, 2021. GOPB subsequently expended the funds on December 30, 2022, three months after the final obligation liquidation date of September 30, 2022 due to delays in FEMA reimbursements received after this date.¬¬
The US Department of the Treasury’s (Treasury) program guidance indicates payments from CRF “may only be used to cover costs that were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.” The Treasury further revised its definition of “incurred” as of December 14, 2021, to align with Uniform Guidance’s definition of obligation (2 CFR 200.1). This means an order should be placed for property and services or entering into contracts, subawards, and similar transactions that require payment by December 31, 2021 to properly obligate CRF funds. In addition, the Treasury’s revised guidance clarified that recipients “are required to expend their funds received from the CRF to cover these obligations by September 30, 2022.” Regarding FEMA reimbursements, the Prime Recipient Quarterly Grant Solutions Closeout Procedure Guide, which was issued by the Treasury Office of Inspector General (OIG) on February 14, 2022, states that “a prime recipient should refer to Treasury’s guidance when applying CRF proceeds, which are freed up as a result of FEMA’s 100 percent Federal cost share coverage, to other eligible uses under the CARES Act.”
Facing the deadlines to close out CRF or lose funding, GOPB used the funds without appropriately adhering to the obligation and liquidation dates provided in the written guidance issued by the Treasury, including after-the-fact FEMA reimbursements. Failure to follow Treasury’s written period of performance guidance for timely obligation and liquidation of funds may jeopardize the use of funding and require repayment by the State. We considered GOPB’s use of the $48 million to ultimately be for eligible purposes under CRF’s allowable activities. As such, we did not question these costs.
Recommendation:
We recommend GOPB follow the Treasury’s written period of performance guidance with regard to obligation and liquidation of funds as it closes out the CRF program.
GOPB’s Response:
GOPB agrees with the basis for this finding. GOPB followed an alternative interpretation of the Treasury's CRF guidance regarding the use of CRF proceeds for costs incurred in response to correspondence with the U.S. Treasury. It was believed actions taken were reasonable based on that correspondence and Treasury’s Closeout Procedures Guide.
After the enactment of the CARES Act, the Treasury Department updated guidance on costs incurred multiple times, including with the CRF Guidance Revision Regarding Cost Incurred on December 14, 2021. Based on a review of Treasury guidance and an email exchange between GOPB and the Treasury Office of Inspector General in September 2022, GOPB updated quarterly CRF reports to reallocate CRF proceeds freed up as a result of FEMA reimbursements to other eligible costs incurred prior to December 31, 2021. Those reallocated costs were incurred prior to December 31, 2021 and were eligible CRF obligations and expenditures, even if the state didn’t ultimately determine it would use CRF proceeds to cover those costs until the December 2022 reporting period.
2023-016. Underlying Accounting Data Does Not Support CRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-024, 2021-020
The methodology used by GOPB to prepare and submit CRF quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system or “official record.” We selected the October 2022 and January 2023 report submissions to test key items on the reports as specified in the OMB Compliance Supplement. We were unable to determine the completeness of the line items as follows:
October 2022 Report
• Manual adjustments made to the original data totaled $98.3 million.
January 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $68.2 million of expenditures more than data used in the preparation schedules.
• Manual adjustments made to the data totaled $54.5 million.
While manual adjustments, corrections, and other changes (i.e., FEMA reimbursements) are not unexpected in reports, we considered the following in relation to GOPB’s report preparation:
• A reconciliation of the underlying accounting data and manual adjustments in the reports to the “official record” of CRF expenditures in FINET has not occurred.
• Underlying accounting data was inconsistently coded from 2020 through 2023 but has not been reconciled to ensure all appropriate expenditures have been reported.
• Manual adjustments include significant amounts of expenditures reimbursed by FEMA that may have been charged to both programs without detection.
• Manual adjustments identified appear to report transactions within the period of performance, but underlying evidence indicates the obligation and liquidation occurred subsequent to period of performance dates in FINET. See Finding 1.
• We could not properly test reported total cumulative obligations for either report because they were not properly documented. FINET does not track obligations and as such, reported obligations are manually included for reporting.
• GOPB did not maintain appropriate internal control separation of duties between preparation and review.
The Treasury’s guidance indicates that the “prime recipient’s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient’s accounting system.” Additionally, the OIG FAQs on reporting and recordkeeping describe the need to correct errors or modifications in a timely manner and to report actual obligations and expenditures rather than estimates.
GOPB relied on state agencies to properly code expenditures and to have a proper understanding of the appropriate use of funds. The data in FINET and expenditures reported drastically differed due to these coding differences and required manual adjustments that were not properly documented. GOPB personnel did not prioritize the reconciliation of FINET expenditures and obligations to those reported because of other duties, time constraints, and priorities. In addition to the failure to properly code and track expenditures, an untimely reconciliation and lack of appropriate separation of duties to prepare and review reports can lead GOPB to significantly misreport expenditures, misidentify errors, and miscalculate obligations of funds to be returned to the Treasury, if any.
Recommendations:
We recommend the following to GOPB:
• Perform a reconciliation of reported and actual expenditures in FINET from fiscal years 2021 – 2023 as it closes out the CRF.
• Perform a reconciliation of FEMA reimbursements with reported and actual expenditures to ensure expenditures were not charged to both programs.
• Ensure adequate documentation of expenditures, obligations, and adjustments exist as part of closing out the CRF.
GOPB’s Response:
GOPB agrees with this finding. GOPB acknowledges that because of complexities in coding and tracking during fiscal years 2020 to 2023 and a ten-day federal reporting deadline, not all reported expenditures were reconciled before quarterly reports were submitted. Between July 2022 and January 2023, GOPB made significant progress by compiling and reconciling a master CRF expenditure file. After completing a final reconciliation for the September 31, 2023, CRF quarterly report, GOPB is confident every transaction reported to the Department of the Treasury, including adjustments for FEMA reimbursements and other recategorizations, is reconciled with FINET data.
2023-016. Underlying Accounting Data Does Not Support CRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-024, 2021-020
The methodology used by GOPB to prepare and submit CRF quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system or “official record.” We selected the October 2022 and January 2023 report submissions to test key items on the reports as specified in the OMB Compliance Supplement. We were unable to determine the completeness of the line items as follows:
October 2022 Report
• Manual adjustments made to the original data totaled $98.3 million.
January 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $68.2 million of expenditures more than data used in the preparation schedules.
• Manual adjustments made to the data totaled $54.5 million.
While manual adjustments, corrections, and other changes (i.e., FEMA reimbursements) are not unexpected in reports, we considered the following in relation to GOPB’s report preparation:
• A reconciliation of the underlying accounting data and manual adjustments in the reports to the “official record” of CRF expenditures in FINET has not occurred.
• Underlying accounting data was inconsistently coded from 2020 through 2023 but has not been reconciled to ensure all appropriate expenditures have been reported.
• Manual adjustments include significant amounts of expenditures reimbursed by FEMA that may have been charged to both programs without detection.
• Manual adjustments identified appear to report transactions within the period of performance, but underlying evidence indicates the obligation and liquidation occurred subsequent to period of performance dates in FINET. See Finding 1.
• We could not properly test reported total cumulative obligations for either report because they were not properly documented. FINET does not track obligations and as such, reported obligations are manually included for reporting.
• GOPB did not maintain appropriate internal control separation of duties between preparation and review.
The Treasury’s guidance indicates that the “prime recipient’s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient’s accounting system.” Additionally, the OIG FAQs on reporting and recordkeeping describe the need to correct errors or modifications in a timely manner and to report actual obligations and expenditures rather than estimates.
GOPB relied on state agencies to properly code expenditures and to have a proper understanding of the appropriate use of funds. The data in FINET and expenditures reported drastically differed due to these coding differences and required manual adjustments that were not properly documented. GOPB personnel did not prioritize the reconciliation of FINET expenditures and obligations to those reported because of other duties, time constraints, and priorities. In addition to the failure to properly code and track expenditures, an untimely reconciliation and lack of appropriate separation of duties to prepare and review reports can lead GOPB to significantly misreport expenditures, misidentify errors, and miscalculate obligations of funds to be returned to the Treasury, if any.
Recommendations:
We recommend the following to GOPB:
• Perform a reconciliation of reported and actual expenditures in FINET from fiscal years 2021 – 2023 as it closes out the CRF.
• Perform a reconciliation of FEMA reimbursements with reported and actual expenditures to ensure expenditures were not charged to both programs.
• Ensure adequate documentation of expenditures, obligations, and adjustments exist as part of closing out the CRF.
GOPB’s Response:
GOPB agrees with this finding. GOPB acknowledges that because of complexities in coding and tracking during fiscal years 2020 to 2023 and a ten-day federal reporting deadline, not all reported expenditures were reconciled before quarterly reports were submitted. Between July 2022 and January 2023, GOPB made significant progress by compiling and reconciling a master CRF expenditure file. After completing a final reconciliation for the September 31, 2023, CRF quarterly report, GOPB is confident every transaction reported to the Department of the Treasury, including adjustments for FEMA reimbursements and other recategorizations, is reconciled with FINET data.
2023-016. Underlying Accounting Data Does Not Support CRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-024, 2021-020
The methodology used by GOPB to prepare and submit CRF quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system or “official record.” We selected the October 2022 and January 2023 report submissions to test key items on the reports as specified in the OMB Compliance Supplement. We were unable to determine the completeness of the line items as follows:
October 2022 Report
• Manual adjustments made to the original data totaled $98.3 million.
January 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $68.2 million of expenditures more than data used in the preparation schedules.
• Manual adjustments made to the data totaled $54.5 million.
While manual adjustments, corrections, and other changes (i.e., FEMA reimbursements) are not unexpected in reports, we considered the following in relation to GOPB’s report preparation:
• A reconciliation of the underlying accounting data and manual adjustments in the reports to the “official record” of CRF expenditures in FINET has not occurred.
• Underlying accounting data was inconsistently coded from 2020 through 2023 but has not been reconciled to ensure all appropriate expenditures have been reported.
• Manual adjustments include significant amounts of expenditures reimbursed by FEMA that may have been charged to both programs without detection.
• Manual adjustments identified appear to report transactions within the period of performance, but underlying evidence indicates the obligation and liquidation occurred subsequent to period of performance dates in FINET. See Finding 1.
• We could not properly test reported total cumulative obligations for either report because they were not properly documented. FINET does not track obligations and as such, reported obligations are manually included for reporting.
• GOPB did not maintain appropriate internal control separation of duties between preparation and review.
The Treasury’s guidance indicates that the “prime recipient’s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient’s accounting system.” Additionally, the OIG FAQs on reporting and recordkeeping describe the need to correct errors or modifications in a timely manner and to report actual obligations and expenditures rather than estimates.
GOPB relied on state agencies to properly code expenditures and to have a proper understanding of the appropriate use of funds. The data in FINET and expenditures reported drastically differed due to these coding differences and required manual adjustments that were not properly documented. GOPB personnel did not prioritize the reconciliation of FINET expenditures and obligations to those reported because of other duties, time constraints, and priorities. In addition to the failure to properly code and track expenditures, an untimely reconciliation and lack of appropriate separation of duties to prepare and review reports can lead GOPB to significantly misreport expenditures, misidentify errors, and miscalculate obligations of funds to be returned to the Treasury, if any.
Recommendations:
We recommend the following to GOPB:
• Perform a reconciliation of reported and actual expenditures in FINET from fiscal years 2021 – 2023 as it closes out the CRF.
• Perform a reconciliation of FEMA reimbursements with reported and actual expenditures to ensure expenditures were not charged to both programs.
• Ensure adequate documentation of expenditures, obligations, and adjustments exist as part of closing out the CRF.
GOPB’s Response:
GOPB agrees with this finding. GOPB acknowledges that because of complexities in coding and tracking during fiscal years 2020 to 2023 and a ten-day federal reporting deadline, not all reported expenditures were reconciled before quarterly reports were submitted. Between July 2022 and January 2023, GOPB made significant progress by compiling and reconciling a master CRF expenditure file. After completing a final reconciliation for the September 31, 2023, CRF quarterly report, GOPB is confident every transaction reported to the Department of the Treasury, including adjustments for FEMA reimbursements and other recategorizations, is reconciled with FINET data.
2023-016. Underlying Accounting Data Does Not Support CRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-024, 2021-020
The methodology used by GOPB to prepare and submit CRF quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system or “official record.” We selected the October 2022 and January 2023 report submissions to test key items on the reports as specified in the OMB Compliance Supplement. We were unable to determine the completeness of the line items as follows:
October 2022 Report
• Manual adjustments made to the original data totaled $98.3 million.
January 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $68.2 million of expenditures more than data used in the preparation schedules.
• Manual adjustments made to the data totaled $54.5 million.
While manual adjustments, corrections, and other changes (i.e., FEMA reimbursements) are not unexpected in reports, we considered the following in relation to GOPB’s report preparation:
• A reconciliation of the underlying accounting data and manual adjustments in the reports to the “official record” of CRF expenditures in FINET has not occurred.
• Underlying accounting data was inconsistently coded from 2020 through 2023 but has not been reconciled to ensure all appropriate expenditures have been reported.
• Manual adjustments include significant amounts of expenditures reimbursed by FEMA that may have been charged to both programs without detection.
• Manual adjustments identified appear to report transactions within the period of performance, but underlying evidence indicates the obligation and liquidation occurred subsequent to period of performance dates in FINET. See Finding 1.
• We could not properly test reported total cumulative obligations for either report because they were not properly documented. FINET does not track obligations and as such, reported obligations are manually included for reporting.
• GOPB did not maintain appropriate internal control separation of duties between preparation and review.
The Treasury’s guidance indicates that the “prime recipient’s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient’s accounting system.” Additionally, the OIG FAQs on reporting and recordkeeping describe the need to correct errors or modifications in a timely manner and to report actual obligations and expenditures rather than estimates.
GOPB relied on state agencies to properly code expenditures and to have a proper understanding of the appropriate use of funds. The data in FINET and expenditures reported drastically differed due to these coding differences and required manual adjustments that were not properly documented. GOPB personnel did not prioritize the reconciliation of FINET expenditures and obligations to those reported because of other duties, time constraints, and priorities. In addition to the failure to properly code and track expenditures, an untimely reconciliation and lack of appropriate separation of duties to prepare and review reports can lead GOPB to significantly misreport expenditures, misidentify errors, and miscalculate obligations of funds to be returned to the Treasury, if any.
Recommendations:
We recommend the following to GOPB:
• Perform a reconciliation of reported and actual expenditures in FINET from fiscal years 2021 – 2023 as it closes out the CRF.
• Perform a reconciliation of FEMA reimbursements with reported and actual expenditures to ensure expenditures were not charged to both programs.
• Ensure adequate documentation of expenditures, obligations, and adjustments exist as part of closing out the CRF.
GOPB’s Response:
GOPB agrees with this finding. GOPB acknowledges that because of complexities in coding and tracking during fiscal years 2020 to 2023 and a ten-day federal reporting deadline, not all reported expenditures were reconciled before quarterly reports were submitted. Between July 2022 and January 2023, GOPB made significant progress by compiling and reconciling a master CRF expenditure file. After completing a final reconciliation for the September 31, 2023, CRF quarterly report, GOPB is confident every transaction reported to the Department of the Treasury, including adjustments for FEMA reimbursements and other recategorizations, is reconciled with FINET data.
2023-016. Underlying Accounting Data Does Not Support CRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.019 Coronavirus Relief Fund
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-024, 2021-020
The methodology used by GOPB to prepare and submit CRF quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system or “official record.” We selected the October 2022 and January 2023 report submissions to test key items on the reports as specified in the OMB Compliance Supplement. We were unable to determine the completeness of the line items as follows:
October 2022 Report
• Manual adjustments made to the original data totaled $98.3 million.
January 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $68.2 million of expenditures more than data used in the preparation schedules.
• Manual adjustments made to the data totaled $54.5 million.
While manual adjustments, corrections, and other changes (i.e., FEMA reimbursements) are not unexpected in reports, we considered the following in relation to GOPB’s report preparation:
• A reconciliation of the underlying accounting data and manual adjustments in the reports to the “official record” of CRF expenditures in FINET has not occurred.
• Underlying accounting data was inconsistently coded from 2020 through 2023 but has not been reconciled to ensure all appropriate expenditures have been reported.
• Manual adjustments include significant amounts of expenditures reimbursed by FEMA that may have been charged to both programs without detection.
• Manual adjustments identified appear to report transactions within the period of performance, but underlying evidence indicates the obligation and liquidation occurred subsequent to period of performance dates in FINET. See Finding 1.
• We could not properly test reported total cumulative obligations for either report because they were not properly documented. FINET does not track obligations and as such, reported obligations are manually included for reporting.
• GOPB did not maintain appropriate internal control separation of duties between preparation and review.
The Treasury’s guidance indicates that the “prime recipient’s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient’s accounting system.” Additionally, the OIG FAQs on reporting and recordkeeping describe the need to correct errors or modifications in a timely manner and to report actual obligations and expenditures rather than estimates.
GOPB relied on state agencies to properly code expenditures and to have a proper understanding of the appropriate use of funds. The data in FINET and expenditures reported drastically differed due to these coding differences and required manual adjustments that were not properly documented. GOPB personnel did not prioritize the reconciliation of FINET expenditures and obligations to those reported because of other duties, time constraints, and priorities. In addition to the failure to properly code and track expenditures, an untimely reconciliation and lack of appropriate separation of duties to prepare and review reports can lead GOPB to significantly misreport expenditures, misidentify errors, and miscalculate obligations of funds to be returned to the Treasury, if any.
Recommendations:
We recommend the following to GOPB:
• Perform a reconciliation of reported and actual expenditures in FINET from fiscal years 2021 – 2023 as it closes out the CRF.
• Perform a reconciliation of FEMA reimbursements with reported and actual expenditures to ensure expenditures were not charged to both programs.
• Ensure adequate documentation of expenditures, obligations, and adjustments exist as part of closing out the CRF.
GOPB’s Response:
GOPB agrees with this finding. GOPB acknowledges that because of complexities in coding and tracking during fiscal years 2020 to 2023 and a ten-day federal reporting deadline, not all reported expenditures were reconciled before quarterly reports were submitted. Between July 2022 and January 2023, GOPB made significant progress by compiling and reconciling a master CRF expenditure file. After completing a final reconciliation for the September 31, 2023, CRF quarterly report, GOPB is confident every transaction reported to the Department of the Treasury, including adjustments for FEMA reimbursements and other recategorizations, is reconciled with FINET data.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-014. Missing Documentation for Emergency Rental Assistance Payments
Utah Department of Workforce Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of U.S. Treasury
Assistance Listing Number and Title: 21.023 Emergency Rental Assistance (ERA) Programs
Federal Award Number: N/A
Questioned Costs: $4,450
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-019
Surveying a sample of 60 payments for the ERA program, two of the payments did not have documentation supporting the payment or had ineligible application costs associated with the recipient. Specifically, the errors were:
• One application did not include correct income verification for $3,100 of rent payments, and included an unallowable future rent payment for a month-to-month contract.
• One application did not include a signed stay agreement for a short-term stay in a hotel for a total of $1,350.
The above errors did not meet the documentation and eligibility criteria established by federal statute (see section 501, Division N of the Consolidated Appropriations Act and Section 3201 of the American Rescue Plan Act).
These errors occurred because the eligibility workers did not follow Department of Workforce Services (DWS) procedures for ERA and the DWS Processors’ review of these applications did not identify and correct the errors. This resulted in questioned costs of $4,450 out of the $119,910 of sampled payments.
Subsequent to DWS’ initial eligibility determination and payment approval, DWS was able to obtain the missing supporting documentation for both of these applications from the individual and the hotel, which total $2,900 of the errors above.
Recommendation
We recommend that DWS require:
• Eligibility workers to follow ERA procedures.
• Program processors to review the applications for completeness and accuracy prior to disbursing ERA payments.
DWS’ Response
We agree with the finding.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-017. Failure to Implement SLFRF Subrecipient Monitoring Requirements
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-026
GOPB, the prime recipient for the State and Local Fiscal Recovery Funds (SLFRF), and state agencies, including the Governor’s Office of Economic Development (GOEO), Department of Natural Resources (DNR), and Department of Environmental Quality (DEQ), did not adequately fulfill their subrecipient monitoring responsibilities for 53 agreements passing through nearly $105 million during State fiscal year 2023 as follows:
Communication of Key Federal Grant Information, Risk Evaluation, and Compliance Monitoring
GOEO, DNR, and DEQ did not implement adequate policies and procedures, properly communicate key federal grant information as required by 2 CRF 200.332(a), evaluate subrecipient risk, and monitor subrecipients for compliance as required by 2 CRF 200.332(b) and (d).
From a sample of nine subrecipients, we noted the following: (see pdf for table) Subrecipient Single Audit Report Reviews
GOPB did not review subrecipient Single Audit reports and findings for 2 of 3 sampled awards to assess whether the subrecipients spent the funds appropriately. GOPB did not have adequate controls to ensure its subrecipients’ Single Audit reports were monitored according to federal requirements. Uniform Guidance (2 CFR 200.332(d)(2)) requires a review of subrecipient Single Audit reports when they become available and a follow-up to ensure that any findings related to the applicable program are addressed. GOPB implemented a process to review Single Audit reports, but the control in place failed to identify all subrecipients that had Single Audit reports available for review.
The errors noted above were a result of the agencies, including GOPB, not fully understanding the nature of the funds they received, the extent of compliance requirements, and the nature of the subaward agreement relationships.
Failure to establish internal controls, adequately communicate key federal program information to subrecipients, and perform risk evaluation and monitoring procedures may result in the subrecipient’s noncompliance with federal fund requirements and potential misuse of federal funds.
Recommendations:
We recommend that GOPB work with other state entities like GOEO, DNR, and DEQ ensure an adequate understanding of the subrecipient requirements required by 2 CFR 200.332, including:
1. Establish appropriate internal controls and written policies and procedures to properly identify subrecipients and ensure compliance with subrecipient monitoring requirements,
2. Communicate all required federal award information to sub-recipients,
3. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, and
4. Monitor subrecipients according to their assessed risk.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. GOPB has taken proactive measures to support state agencies in meeting their monitoring obligations after concerns were identified during the 2022 single audit. On May 15, 2023, GOPB distributed an email communication containing the ARPA Reference Guide to all state agencies responsible for administering ARPA SLFRF funds. This guide serves as a detailed resource outlining essential compliance documents necessary for effective implementation and monitoring of SLFRF programs. The ARPA Reference Guide includes a range of compliance documents, including the State Agency Checklist, SLFRF Administrative and Indirect Costs Eligibility, Single Audit Compliance guidelines, Internal Controls Reference Guide, Risk Assessment Checklist, Agreement Checklist, and Subrecipient, Beneficiary, and Contractor Checklist.
On May 31 and June 6, 2023, GOPB provided federal funds compliance training to agency financial management staff to cover various topics crucial to SLFRF oversight, including the ARPA Reference Guide, Unique Entity ID (UEI), FINET ARPA Coding, Agency Checklist, and Agency Reviews. As outlined in the Final Rule FAQ 13.15, projects categorized under Expenditure Category 6, also known as “Revenue Replacement,” are exempt from some provisions in uniform guidance. Some of the projects sampled during the audit, including a portion of the projects managed by the Governor’s Office of Economic Opportunity (GOEO) and GOPB, fall under the revenue replacement category.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-018. Underlying Accounting Data Does Not Support Coronavirus SLFRF Quarterly Reports
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The methodology used by GOPB to prepare and submit Coronavirus State and Local Fiscal Recovery Fund (SLFRF) quarterly financial reports did not ensure the complete and accurate reporting of expenditures as reflected in FINET, the State’s accounting system. We selected the October 2022 and April 2023 report submissions to test key line items. We identified the following errors:
October 2022 Report
• Our reperformance of GOPB’s original data query of FINET resulted in $15.7 million of cumulative expenditures more than data used in the preparation schedules.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $54 thousand to $77.2 million between what was submitted on the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range of $54 thousand to $15 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $46.5 million to $77.2 million occurred only for Total Obligations and Total Expenditures.
• GOPB erroneously reported its calculated Revenue Replacement amounts by swapping the Base Year General Revenue Amount ($16.8 billion) and the 2020 Actual General Revenue ($17.5 billion).
April 2023 Report
• Our reperformance of GOPB’s original query of FINET resulted in $5.0 million more cumulative expenditures than the data used in the preparation schedule.
• Our comparison of GOPB’s preparation spreadsheet and the report show cumulative obligations were underreported by $2.7 million.
• From a sample of 8 projects, we noted differences for 5 projects ranging from $1,200 to $47.4 million between what was submitted in the quarterly report and the underlying accounting data. Current Expenditures and Current Obligations errors differed by a range from $1,200 to $9.3 million that also impact Total Expenditures and Total Obligations. Additional differences ranging from $11.9 million to $47.4 million occurred only for Total Obligations and Total Expenditures.
Additionally, we identified the following in relation to GOPB’s reporting activity:
• GOPB’s compilation coding structure was either inconsistently or erroneously applied or manually adjusted and unsupported.
• Prepared obligation and expenditure data did not match the submitted report data.
• GOPB reported cash transfers exceeding $38 million as actual expenditures during the reporting periods. The transfers should have been reported as potential obligations only. The differences in expenditures described above include the actual expenditures made in the respective periods.
• GOPB reported four projects with expected capital expenditures of $10 million or greater and did not have written justification included with the reports or on file. GOPB reported one project with expected capital expenditures between $1 million and $10 million and did not have written justification on file as required by Treasury for capital expenditures.
The Treasury’s Compliance and Reporting Guidance for SLFRF outlines that recipients “should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles” as well as other key reporting requirements for revenue replacement and capital expenditures.
GOPB’s reported obligations, expenditures, and other key line items drastically differed due to the compilation methodology differences and manual adjustments that were not properly documented. Internal controls failed to prevent or detect and correct the differences. Failure to adequately compile, document, and report expenditures can cause a misrepresentation or misreporting of funds.
Recommendations:
We recommend GOPB do the following:
1. Develop and apply consistent methodology of report data compilation and preparation to ensure it agrees to underlying accounting information,
2. Maintain adequate documentation for reporting requirements including manual adjustments and capital expenditures, and
3. Establish appropriate internal controls to prevent or detect and correct material errors in reporting processes prior to submission to Treasury.
GOPB’s Response:
GOPB agrees with this finding. GOPB believes SLFRF reports were complete and accurate; however, GOPB acknowledges that it did not adequately update its SLFRF accounting code crosswalk or document all adjustments to allow for independent verification of the information reported.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-019. Suspension and Debarment Not Verified Before Awarding Contracts
Governor’s Office of Planning and Budget
(Finding Type: Significant Deficiency)
Federal Agency: Department of the Treasury
Assistance Listing Number and Title: 21.027 Coronavirus State & Local Fiscal Recovery Funds
Federal Award Number: N/A
Questioned Costs: $0
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-022, 2021-022
Upon receiving a Coronavirus State and Local Fiscal Recovery Fund (SLFRF) allocation, the Utah Board of Higher Education (USHE) neither established internal controls to ensure compliance with federal suspension and debarment requirements for awarded contracts, nor did they verify whether contracted parties were suspended or debarred prior to contracting with the parties. The two contracts awarded by USHE out of 44 contracts reviewed statewide did not check for suspension and debarment requirements prior to the award.
The Treasury’s Final Rule General provisions and the Interim Final Rule issued May 17, 2021 states that “payments from the…Funds…will be subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200),” which includes suspension and debarment requirements (see 2 CFR 200.214). Uniform Guidance (2 CFR part 200.303) also requires non-federal entities to “establish and maintain effective internal control…that provides reasonable assurance that the non-federal entity [manages the program] in compliance with…terms and conditions of the federal award.” Given USHE’s inexperience with federal programs, USHE was unaware the suspension and debarment requirements were applicable to its program, and GOPB did not sufficiently communicate applicable federal program requirements. Failure to properly implement controls and review each contracted party for suspension and debarment could result in federally debarred entities receiving grant awards.
Recommendations:
We recommend GOPB assist agencies, including USHE, to gain an understanding of suspension and debarment requirements and establish effective internal controls to ensure compliance with these requirements.
GOPB’s Response:
GOPB agrees with this finding. This is a repeat finding from the 2022 single audit because there was insufficient time to implement the previous corrective action plan between the release of the audit and end of fiscal year 2023. In September 2022, GOPB distributed an ARPA Agency Checklist to remind those managing SLFR funds of compliance, monitoring, and reporting requirements, which included the requirement of monitoring for suspension and debarment. This checklist tool was not consistently used previously. A retroactive check was performed and no entities receiving federal funds had been suspended or debarred. Follow-up training on ARPA monitoring was done April 3 and June 7, 2023. GOPB also reviewed Final Rule FAQ 13.15 which clarifies that revenue replacement dollars have different subrecipient monitoring standards, including an exemption from suspension and debarment checks in 2 CFR 200.214.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy
Utah Tech University
(Finding Type: Significant Deficiency)
Federal Agency: Department of Education
Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid
84.425F HEERF Institutional Aid
Federal Award Number: P425E201701, P425F201626, and P425M200131
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports.
The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions.
Recommendation:
We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy.
University’s Response:
We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-009
DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete.
Recommendations:
We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process.
DHHS’s Response
The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-009
DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete.
Recommendations:
We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process.
DHHS’s Response
The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-009
DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete.
Recommendations:
We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process.
DHHS’s Response
The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX)
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-009
DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete.
Recommendations:
We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process.
DHHS’s Response
The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-008. Noncompliance with Timing of Health and Safety Surveys
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
12 of the 14 facilities sampled for Medicaid Health and Safety Surveys were performed between 18.63 months and 59.5 months, including 10 sampled facilities over 28 months, from the last survey date. Federal regulation 42 CFR 442.15 requires that surveys of facilities are to be conducted “to determine compliance with the requirements at a survey interval of no greater than 15 months.” According to DHHS, the surveys were backlogged due to the COVID-19 pandemic, in addition to a staffing shortage amidst a hiring freeze. The existing staff was unable to maintain regular certifications and address the backlog within the required timeline. If surveys are not completed, facilities could become noncompliant with health and safety requirements without detection, thus potentially endangering patients.
Recommendations:
We recommend DHHS create a plan to clear the backlog and maintain proper timing to complete the Health and Safety Survey.
DHHS’s Response:
The Division of Licensing and Background Checks (DLBC), Office of Licensing (OL) agrees with this finding and recommendation.
2023-008. Noncompliance with Timing of Health and Safety Surveys
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
12 of the 14 facilities sampled for Medicaid Health and Safety Surveys were performed between 18.63 months and 59.5 months, including 10 sampled facilities over 28 months, from the last survey date. Federal regulation 42 CFR 442.15 requires that surveys of facilities are to be conducted “to determine compliance with the requirements at a survey interval of no greater than 15 months.” According to DHHS, the surveys were backlogged due to the COVID-19 pandemic, in addition to a staffing shortage amidst a hiring freeze. The existing staff was unable to maintain regular certifications and address the backlog within the required timeline. If surveys are not completed, facilities could become noncompliant with health and safety requirements without detection, thus potentially endangering patients.
Recommendations:
We recommend DHHS create a plan to clear the backlog and maintain proper timing to complete the Health and Safety Survey.
DHHS’s Response:
The Division of Licensing and Background Checks (DLBC), Office of Licensing (OL) agrees with this finding and recommendation.
2023-008. Noncompliance with Timing of Health and Safety Surveys
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
12 of the 14 facilities sampled for Medicaid Health and Safety Surveys were performed between 18.63 months and 59.5 months, including 10 sampled facilities over 28 months, from the last survey date. Federal regulation 42 CFR 442.15 requires that surveys of facilities are to be conducted “to determine compliance with the requirements at a survey interval of no greater than 15 months.” According to DHHS, the surveys were backlogged due to the COVID-19 pandemic, in addition to a staffing shortage amidst a hiring freeze. The existing staff was unable to maintain regular certifications and address the backlog within the required timeline. If surveys are not completed, facilities could become noncompliant with health and safety requirements without detection, thus potentially endangering patients.
Recommendations:
We recommend DHHS create a plan to clear the backlog and maintain proper timing to complete the Health and Safety Survey.
DHHS’s Response:
The Division of Licensing and Background Checks (DLBC), Office of Licensing (OL) agrees with this finding and recommendation.
2023-008. Noncompliance with Timing of Health and Safety Surveys
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency and Reportable Noncompliance)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
12 of the 14 facilities sampled for Medicaid Health and Safety Surveys were performed between 18.63 months and 59.5 months, including 10 sampled facilities over 28 months, from the last survey date. Federal regulation 42 CFR 442.15 requires that surveys of facilities are to be conducted “to determine compliance with the requirements at a survey interval of no greater than 15 months.” According to DHHS, the surveys were backlogged due to the COVID-19 pandemic, in addition to a staffing shortage amidst a hiring freeze. The existing staff was unable to maintain regular certifications and address the backlog within the required timeline. If surveys are not completed, facilities could become noncompliant with health and safety requirements without detection, thus potentially endangering patients.
Recommendations:
We recommend DHHS create a plan to clear the backlog and maintain proper timing to complete the Health and Safety Survey.
DHHS’s Response:
The Division of Licensing and Background Checks (DLBC), Office of Licensing (OL) agrees with this finding and recommendation.
2023-009. Untimely Implementation of Provider Eligibility Requirement Changes
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
DHHS did not properly review and approve 1 of 42 Medicaid provider applications reviewed during the audit. Per Federal regulations (2 CFR 455 Subpart E), providers must be screened, and their license and certifications must be verified before they are initially validated or revalidated. Effective July 1, 2021, requirements for Case Managers provider group were updated to require a Case Manager Certificate to be eligible for providing Medicaid services. Because DHHS did not implement the requirement in the system until June 15, 2022, the system did not have the proper criteria to determine provider eligibility during the period of delayed implementation. As a result, DHHS risks using Medicaid funds on ineligible providers.
Recommendations:
We recommend that DHHS implement procedures to ensure that eligibility requirements are implemented promptly after new eligibility requirements are announced by State Medicaid.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Medicaid Operations (OMO) agrees with this finding and recommendation.
2023-009. Untimely Implementation of Provider Eligibility Requirement Changes
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
DHHS did not properly review and approve 1 of 42 Medicaid provider applications reviewed during the audit. Per Federal regulations (2 CFR 455 Subpart E), providers must be screened, and their license and certifications must be verified before they are initially validated or revalidated. Effective July 1, 2021, requirements for Case Managers provider group were updated to require a Case Manager Certificate to be eligible for providing Medicaid services. Because DHHS did not implement the requirement in the system until June 15, 2022, the system did not have the proper criteria to determine provider eligibility during the period of delayed implementation. As a result, DHHS risks using Medicaid funds on ineligible providers.
Recommendations:
We recommend that DHHS implement procedures to ensure that eligibility requirements are implemented promptly after new eligibility requirements are announced by State Medicaid.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Medicaid Operations (OMO) agrees with this finding and recommendation.
2023-009. Untimely Implementation of Provider Eligibility Requirement Changes
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
DHHS did not properly review and approve 1 of 42 Medicaid provider applications reviewed during the audit. Per Federal regulations (2 CFR 455 Subpart E), providers must be screened, and their license and certifications must be verified before they are initially validated or revalidated. Effective July 1, 2021, requirements for Case Managers provider group were updated to require a Case Manager Certificate to be eligible for providing Medicaid services. Because DHHS did not implement the requirement in the system until June 15, 2022, the system did not have the proper criteria to determine provider eligibility during the period of delayed implementation. As a result, DHHS risks using Medicaid funds on ineligible providers.
Recommendations:
We recommend that DHHS implement procedures to ensure that eligibility requirements are implemented promptly after new eligibility requirements are announced by State Medicaid.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Medicaid Operations (OMO) agrees with this finding and recommendation.
2023-009. Untimely Implementation of Provider Eligibility Requirement Changes
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
DHHS did not properly review and approve 1 of 42 Medicaid provider applications reviewed during the audit. Per Federal regulations (2 CFR 455 Subpart E), providers must be screened, and their license and certifications must be verified before they are initially validated or revalidated. Effective July 1, 2021, requirements for Case Managers provider group were updated to require a Case Manager Certificate to be eligible for providing Medicaid services. Because DHHS did not implement the requirement in the system until June 15, 2022, the system did not have the proper criteria to determine provider eligibility during the period of delayed implementation. As a result, DHHS risks using Medicaid funds on ineligible providers.
Recommendations:
We recommend that DHHS implement procedures to ensure that eligibility requirements are implemented promptly after new eligibility requirements are announced by State Medicaid.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Medicaid Operations (OMO) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the federal awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance.
Recommendations:
We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the federal awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance.
Recommendations:
We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the federal awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance.
Recommendations:
We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness
Utah Department of Health and Human Services
(Finding Type: Significant Deficiency)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.778 Medicaid Assistance Program
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the federal awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance.
Recommendations:
We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness.
DHHS’s Response:
The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-005. Foster Care Eligibility Reviews Not Adequately Completed
Utah Department of Health and Human Services
(Finding Type: Material Internal Control Weakness)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.658 Foster Care Title IV-E
Federal Award Number: 2201UTFOST
2301UTFOST
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-006
For 17 of 60 (28%) cases reviewed, there was no evidence that DHHS had reviewed the initial Title IV-E Foster Care eligibility decisions. Federal regulation 2 CFR 200.303 requires that “the non-federal entity must establish and maintain effective internal control over the Federal award 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.”
In response to a prior year audit finding, DHHS hired an employee in January 2023 to complete the review of eligibility determination. However, the review only covered new cases initiated during the current year, but not the existing cases initiated in prior years. These existing cases have never been reviewed to ensure proper eligibility decisions were made. However, benefit payments were incurred and paid during the year. Given the large number of cases requiring eligibility decisions the current team receives, the control was not properly designed and implemented to complete these reviews in a timely manner. Unreviewed or untimely reviews of eligibility decisions could lead to improper eligibility determinations and inappropriate benefit payments.
Recommendations:
We recommend DHHS allocate sufficient resources to expand the existing review or modify the control to ensure eligibility decisions are reviewed in a timely manner.
DHHS’s Response
The department acknowledges the need for continuous effort on the internal control assessment and reasonable implementation for this area. Procedures exist and review was performed to assist with proper IV-E eligibility determination.
2023-005. Foster Care Eligibility Reviews Not Adequately Completed
Utah Department of Health and Human Services
(Finding Type: Material Internal Control Weakness)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 93.658 Foster Care Title IV-E
Federal Award Number: 2201UTFOST
2301UTFOST
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-006
For 17 of 60 (28%) cases reviewed, there was no evidence that DHHS had reviewed the initial Title IV-E Foster Care eligibility decisions. Federal regulation 2 CFR 200.303 requires that “the non-federal entity must establish and maintain effective internal control over the Federal award 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.”
In response to a prior year audit finding, DHHS hired an employee in January 2023 to complete the review of eligibility determination. However, the review only covered new cases initiated during the current year, but not the existing cases initiated in prior years. These existing cases have never been reviewed to ensure proper eligibility decisions were made. However, benefit payments were incurred and paid during the year. Given the large number of cases requiring eligibility decisions the current team receives, the control was not properly designed and implemented to complete these reviews in a timely manner. Unreviewed or untimely reviews of eligibility decisions could lead to improper eligibility determinations and inappropriate benefit payments.
Recommendations:
We recommend DHHS allocate sufficient resources to expand the existing review or modify the control to ensure eligibility decisions are reviewed in a timely manner.
DHHS’s Response
The department acknowledges the need for continuous effort on the internal control assessment and reasonable implementation for this area. Procedures exist and review was performed to assist with proper IV-E eligibility determination.
2023-006. Lack of Controls over Food Benefit Payments
Utah Department of Health and Human Services
(Finding Type: Material Internal Control Weakness)
Federal Agency: Department of Health and Human Services
Assistance Listing Number and Title: 10.557 Women Infants & Children
Federal Award Number: Various
Questioned Costs: N/A
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: N/A
DHHS did not verify food benefit expenditure detail received from its third-party service organization, along with request for reimbursing program funds, to ensure expenditures were made for allowable activities and costs before making payment. Federal regulation 2 CFR 200.303 states that “the non-federal entity must establish and maintain effective internal control over the Federal award 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.” DHHS has controls in place to ensure that benefit distribution information, such as eligible participants and food plans, is properly sent to its third-party service organization. However, DHHS did not verify the third-party service organization’s expenditure details to ensure that benefit payments made were in compliance with the allowable costs and allowable activities requirements before reimbursement. As a result, inaccurate, incomplete, or false payments may be paid without detection.
Recommendations:
We recommend DHHS establish a system of reviewing its third-party service organization’s expenditure details to ensure that program funds are paid for allowable activities and costs.
DHHS’s Response:
The department recognizes the need to review food benefit expenditure information received from the WIC third-party host processing vendor. WIC procedures are established which support proper performance for food benefit redemption.
2023-020. Working Capital Reserves in Excess of Federal Guidelines
Department of Government Operations
(Finding Type: Reportable Noncompliance)
Federal Agency: Various
Assistance Listing Number and Title: Various
Federal Award Number: Various
Questioned Costs: Undeterminable
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-027, 2021-025, 2020-036; 2019-023; 2018-033; 2017-021; 2016-037; 2015-048; 2014-040; 2013-049; 2012 12-51; 2011 11-56
As of June 30, 2023, five divisions within DGO held working capital reserves in excess of federal guidelines of at least the amounts that follow: (see table in text) The following divisions do not have excess reserves at the internal service fund level; however, the federal oversight agency requires them to be assessed at the service area level, which resulted in excess reserves as follows: (See table in text) 2 CFR part 200, Appendix V, paragraph G.2, generally allows a working capital reserve as part of retained earnings of up to 60 days’ cash expenses for normal operating purposes in each internal service fund. For DTS, the federal oversight agency only allows 45 days. The excess reserves were due to the inherent difficulty of accurately estimating expenses when setting rates. Excess reserves could result in a federal liability since federal programs share an interest in the reserves.
Recommendation:
Depending on the business requirements, we recommend each division within DGO reduce excess working capital reserves within each of the respective funds or service areas.
DGO’s Response and Corrective Action Plan:
Division of Purchasing and General Services
Cooperative Contract Management Fund – Public entities in Utah rely on the Division of Purchasing and General Services (State Purchasing) to maintain the cooperative contract program to assist with public procurement in Utah. The usage of state cooperative contracts by public entities continues to increase yearly, resulting in a corresponding increase in the collection of administrative fees. State Purchasing continues to review contract administrative fees on state cooperative contracts as each contract expires and is resolicited. This is a slow process since State Purchasing has approximately 1,200 cooperative contracts that expire only every five years and are then resolicited. While State Purchasing is allowed under law to collect up to a 1.0% administrative fee on each cooperative contract, currently the average administrative fee is approximately 0.35%, a decrease of 18.6% from the average contract administrative fee in fiscal year 2022.
The Division of Purchasing and General Services also continues to work with the Department of Government Operations executive leadership to request the Utah Legislature appropriate out a portion of the excess reserves in the Cooperative Contract Management Fund. The calculation of the federal portion of these transfers will be submitted to Cost Allocation Services for review and approval when these transfers are completed.
Federal Surplus Property Fund- Surplus Property anticipated relocating by the end of fiscal year 2023 with the completion of the new Utah State Prison. Due to schedule changes, the new location for Surplus Property was not completed in time and the new anticipated relocation date is the end of fiscal year 2025. At the time of relocation, Surplus Property will use the excess reserve funds to move and furnish the new location, including replacing aged equipment.
Division of Finance
Purchasing Card Fund – State Finance is in the process of implementing a new travel and expense reporting system for all state agencies. This system will simplify travel approvals, travel reimbursements, and reduce the administrative burden for the purchasing card (P-Card) expense reports on state agency personnel. To cover system implementation costs, State Finance elected not to distribute the rebates received from U.S. Bank related to state agency P-Card spending for calendar years 2021, 2022, and 2023. Rebates were still sent to participating entities external to the primary government. The anticipated completion date for the new system is the end of the calendar year 2024. State Finance will then review annually the costs of the system, develop a cost allocation strategy between the travel and P-Card programs, and adjust travel rates to cover the travel program's ongoing costs. The P-Card program will then distribute any remaining P-Card rebates to state agencies respective to their spend. This effort should reduce and/or eliminate any excess federal reserves in the P-Card fund by the end of fiscal year 2025.
Division of Risk Management
Workers' Compensation Fund – The Division of Risk Management did not request an increase in rates for fiscal year 2024 for the Workers Compensation Fund. It is also anticipated that premiums for worker compensation insurance for fiscal year 2025 will increase. This increase will help bring this fund back into compliance. The Division of Risk Management will also reevaluate this program at the end of fiscal year 2024 to determine if a legislative request to transfer funds out and/or refund the federal portion of retained earnings is needed to reduce and/or eliminate the excess federal reserves remaining in this fund.
Division of Technology Services
Communication Services – The fiscal year 2024 Communication Services rate was set to under recover the cost of providing this service by $276,000. The fiscal year 2025 rate was also set to under recover the cost of providing this service by an additional $398,000. DTS plans to annually review and adjust rates and issue mid-year rebates, if necessary, to bring DTS Communication Services into compliance with federal excess reserve guidelines by the end of fiscal year 2025.
Mainframe Services – This service will be coming to an end by fiscal year 2024. As this service ends, DTS will issue rebates of any remaining Mainframe Services retained earnings to the state agencies who used the system.
Division of Human Resource Management
Human Resources Field Services – During fiscal year 2023, the Division of Human Resource Management worked to better align expenses with the corresponding rate. A cost allocation plan was developed to accomplish this goal. As a result of that effort, the Human Resources Field Services rate was decreased, and the Payroll Services and Core Services rates were increased for fiscal year 2025. The Division anticipates that these rate adjustments will eliminate the excess reserves.
Public Employees Health Plan
(Finding Type: Reportable Noncompliance)
Federal Agency: Various
Assistance Listing Number and Title: Various
Federal Award Number: Various
Questioned Costs: Undeterminable
Pass-through Entity: N/A
Prior Year Single Audit Report Finding Number: 2022-028; 2021-026; 2020-039; 2019-026; 2018-036; 2017-023; 2016-039; 2015-050; 2014-042; 2013-050; 2012 12-53; 2011 11-58
As of June 30, 2023, PEHP held working capital reserves in excess of federal guidelines as follows below. (see text for table) 2 CFR part 200, Appendix V, paragraph G.2, generally allows a working capital reserve as part of retained earnings of up to 60 days cash expenses for normal operating purposes. The inherent difficulty of accurately estimating expenses led to excess reserves. Excess reserves could result in a federal liability since federal programs share an interest in the reserves.
Recommendations:
Depending on the business requirements, we recommend that PEHP reduce excess working capital reserves to a level allowed by federal regulations.
PEHP’s Response:
Long Term Disability
We agree that the program holds working capital reserves more than the federal guidelines.
State Dental
We agree that the program holds working capital reserves more than the federal guidelines.
Medicare Supplement
We agree that the program holds working capital reserves more than the federal guidelines.