SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
Ref.
No. Compliance and Internal Control over Compliance Findings
2023-004 Reporting - Significant Deficiency
Federal agency: Department of Housing and Urban Development Programs
Pass-Through Entity: N/A - Direct
Program: ALN No. 14.228 Community Development Block Grants / State’s Programs and
Non-Entitlement Grants in Hawaii
Criteria: Section 15011 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) required that recipients of $150,000 or more of CARES Act funding submit, not later than 10 days after the end of each calendar quarter, a report containing information regarding the use and amount of CARES Act funds received; the amount of funds obligated and expended for each project or activity; a detailed list of all such projects or activities, including a description of the project or activity; and detailed information on any subcontracts or subgrants awarded by the recipient.
Condition: During our testing of the reporting compliance requirement, we noted four (4) out of 4 instances where the quarterly report documenting the items required by Section 15011 of the CARES Act was not reviewed and/or submitted within 10 days after the quarter end.
Cause: Lack of adherence to reporting requirements displayed by the Community Development Block Grant (CDBG) Program personnel.
Effect: Without an effective internal control system, failure to timely review and submit reports as required by Section 15011 of the CARES Act could result in the misrepresentation of data and could adversely affect the program outcomes and future funding.
Questioned Cost: $ --
Recommendation
The County should improve their internal control process to ensure that quarterly reports required by Section 15011 of the CARES Act are completed and submitted on a timely basis.
Views of Responsible Officials and Planned Corrective Action
The County agrees with the finding and the recommendation. See Part IV Corrective Action Plan.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued)
Ref.
No. Compliance and Internal Control over Compliance Findings
2023-005 Subrecipient Monitoring - Significant Deficiency
Federal agency: Department of Justice Programs
Pass-Through Entity: State of Hawaii Department of the Attorney General
Program: ALN No. 16.575 Crime Victim Assistance
Criteria: Subrecipient monitoring and management requirements for pass-through entities at 2 CFR §200.332 – Requirements for pass-through entities requires that the County monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity.
The County of Maui’s Prosecuting Attorney’s Office completes a “Project Monitoring Report Form” during the project period for each subrecipient which details programmatic and fiscal data. At the end of the contract period, each subrecipient is required to submit a “Subrecipient Monitoring Form”. The purpose of this report is to monitor subrecipients, and to also ensure that the County is in compliance with federal, state, and Victims of Crime Act requirements and regulations.
Condition: During our testing of the subrecipient monitoring compliance requirement, we discovered the following:
• Two (2) out of 2 instances where the County did not complete the Project Monitoring Report Form for the subrecipient during the contract period.
• One (1) out of 2 instances where the County did not obtain a Subrecipient Monitoring Form from the subrecipient at the end of the contract period.
• One (1) out of 2 instances where the County obtained a Subrecipient Monitoring Form from the subrecipient, however, it was not properly completed.
Cause: The County did not follow its procedures to complete the Project Monitoring Report Form and obtain the Subrecipient Monitoring Form from its subrecipients.
Effect: Completion of the Project Monitoring Report Form and obtaining the Subrecipient Monitoring Form from subrecipients help to ensure that the subaward is used for authorized purposes and the terms and conditions of the subaward and that subaward performance goals are achieved.
Questioned Cost: $ --
Recommendation
We recommend the County ensure the completion of its Project Monitoring Report Form during the contract period and obtain the Subrecipient Monitoring Form from its subrecipients at the end of every contract period as part of its monitoring procedures over subrecipients.
Views of Responsible Officials and Planned Corrective Action
The County agrees with the finding and the recommendation. See Part IV Corrective Action Plan
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued)
Ref.
No. Compliance and Internal Control over Compliance Findings
2023-005 Allowable Costs – Material Weakness
Federal agency: Department of Justice Programs
Pass-Through Entity: State of Hawaii Department of the Attorney General
Program: ALN No. 16.575 Crime Victim Assistance
Criteria: Allowable costs are those costs consistent with the principles set forth in the Uniform Guidance 2 CFR §200 Subpart E – Cost Principles, and found in the laws, regulations, and the provisions of contracts or grant agreements pertaining to the Crime Victim Assistance Program (Program).
2 CFR §200.400 – Policy guide states that the application of the cost principles is based on the fundamental premises that the County, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award. In addition, the County’s accounting practices must be consistent with the cost principles and support the accumulation of costs as required by the principles, and must provide for adequate documentation to support costs charged to the Federal award.
2 CFR §200.430 – Compensation for personal services states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees is reasonable for services rendered and conforms to the established written policy of the County and is determined and supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
The County recovers all expenditures through reimbursements from the State of Hawaii Attorney General’s (SOH AG) office on a monthly basis. The Account Clerk prepares a Request for Funds and Cash Balance Form (RFF) for submission and review. All expenditures are summarized using the County’s Finance Enterprise (FE) Form for the respective reimbursement period and is included in the RFF submitted to the SOH AG’s office for reimbursement.
Condition: During our testing of allowable costs related to non-payroll expenditures, we noted the following:
• Twenty-five (25) out of 25 instances where the County was unable to provide the FE Form for the respective RFF.
During our testing of the allowable costs related to payroll expenditures, we noted the following:
• Sixteen (16) out of 16 instances where the County was unable to locate the RFF for payroll costs.
Cause: The County did not follow its procedures to prepare and review adequate documentation to support the accumulation of costs charged.
Effect: Review and preparation of adequate documentation to support accumulated costs help to ensure that the Federal award is used for authorized purposes and is being administered in accordance to 2 CFR §200 Subpart E.
Questioned Cost: $ --
Recommendation
We recommend the County follow their internal control process to ensure that adequate documentation supports the accumulation of costs charged to the Program as required by 2 CFR §200 Subpart E.
Views of Responsible Officials and Planned Corrective Action
The County agrees with the finding and the recommendation. See Part IV Corrective Action Plan
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
Ref.
No. Compliance and Internal Control over Compliance Findings
2023-004 Reporting - Significant Deficiency
Federal agency: Department of Housing and Urban Development Programs
Pass-Through Entity: N/A - Direct
Program: ALN No. 14.228 Community Development Block Grants / State’s Programs and
Non-Entitlement Grants in Hawaii
Criteria: Section 15011 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) required that recipients of $150,000 or more of CARES Act funding submit, not later than 10 days after the end of each calendar quarter, a report containing information regarding the use and amount of CARES Act funds received; the amount of funds obligated and expended for each project or activity; a detailed list of all such projects or activities, including a description of the project or activity; and detailed information on any subcontracts or subgrants awarded by the recipient.
Condition: During our testing of the reporting compliance requirement, we noted four (4) out of 4 instances where the quarterly report documenting the items required by Section 15011 of the CARES Act was not reviewed and/or submitted within 10 days after the quarter end.
Cause: Lack of adherence to reporting requirements displayed by the Community Development Block Grant (CDBG) Program personnel.
Effect: Without an effective internal control system, failure to timely review and submit reports as required by Section 15011 of the CARES Act could result in the misrepresentation of data and could adversely affect the program outcomes and future funding.
Questioned Cost: $ --
Recommendation
The County should improve their internal control process to ensure that quarterly reports required by Section 15011 of the CARES Act are completed and submitted on a timely basis.
Views of Responsible Officials and Planned Corrective Action
The County agrees with the finding and the recommendation. See Part IV Corrective Action Plan.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued)
Ref.
No. Compliance and Internal Control over Compliance Findings
2023-005 Subrecipient Monitoring - Significant Deficiency
Federal agency: Department of Justice Programs
Pass-Through Entity: State of Hawaii Department of the Attorney General
Program: ALN No. 16.575 Crime Victim Assistance
Criteria: Subrecipient monitoring and management requirements for pass-through entities at 2 CFR §200.332 – Requirements for pass-through entities requires that the County monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity.
The County of Maui’s Prosecuting Attorney’s Office completes a “Project Monitoring Report Form” during the project period for each subrecipient which details programmatic and fiscal data. At the end of the contract period, each subrecipient is required to submit a “Subrecipient Monitoring Form”. The purpose of this report is to monitor subrecipients, and to also ensure that the County is in compliance with federal, state, and Victims of Crime Act requirements and regulations.
Condition: During our testing of the subrecipient monitoring compliance requirement, we discovered the following:
• Two (2) out of 2 instances where the County did not complete the Project Monitoring Report Form for the subrecipient during the contract period.
• One (1) out of 2 instances where the County did not obtain a Subrecipient Monitoring Form from the subrecipient at the end of the contract period.
• One (1) out of 2 instances where the County obtained a Subrecipient Monitoring Form from the subrecipient, however, it was not properly completed.
Cause: The County did not follow its procedures to complete the Project Monitoring Report Form and obtain the Subrecipient Monitoring Form from its subrecipients.
Effect: Completion of the Project Monitoring Report Form and obtaining the Subrecipient Monitoring Form from subrecipients help to ensure that the subaward is used for authorized purposes and the terms and conditions of the subaward and that subaward performance goals are achieved.
Questioned Cost: $ --
Recommendation
We recommend the County ensure the completion of its Project Monitoring Report Form during the contract period and obtain the Subrecipient Monitoring Form from its subrecipients at the end of every contract period as part of its monitoring procedures over subrecipients.
Views of Responsible Officials and Planned Corrective Action
The County agrees with the finding and the recommendation. See Part IV Corrective Action Plan
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued)
Ref.
No. Compliance and Internal Control over Compliance Findings
2023-005 Allowable Costs – Material Weakness
Federal agency: Department of Justice Programs
Pass-Through Entity: State of Hawaii Department of the Attorney General
Program: ALN No. 16.575 Crime Victim Assistance
Criteria: Allowable costs are those costs consistent with the principles set forth in the Uniform Guidance 2 CFR §200 Subpart E – Cost Principles, and found in the laws, regulations, and the provisions of contracts or grant agreements pertaining to the Crime Victim Assistance Program (Program).
2 CFR §200.400 – Policy guide states that the application of the cost principles is based on the fundamental premises that the County, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award. In addition, the County’s accounting practices must be consistent with the cost principles and support the accumulation of costs as required by the principles, and must provide for adequate documentation to support costs charged to the Federal award.
2 CFR §200.430 – Compensation for personal services states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees is reasonable for services rendered and conforms to the established written policy of the County and is determined and supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
The County recovers all expenditures through reimbursements from the State of Hawaii Attorney General’s (SOH AG) office on a monthly basis. The Account Clerk prepares a Request for Funds and Cash Balance Form (RFF) for submission and review. All expenditures are summarized using the County’s Finance Enterprise (FE) Form for the respective reimbursement period and is included in the RFF submitted to the SOH AG’s office for reimbursement.
Condition: During our testing of allowable costs related to non-payroll expenditures, we noted the following:
• Twenty-five (25) out of 25 instances where the County was unable to provide the FE Form for the respective RFF.
During our testing of the allowable costs related to payroll expenditures, we noted the following:
• Sixteen (16) out of 16 instances where the County was unable to locate the RFF for payroll costs.
Cause: The County did not follow its procedures to prepare and review adequate documentation to support the accumulation of costs charged.
Effect: Review and preparation of adequate documentation to support accumulated costs help to ensure that the Federal award is used for authorized purposes and is being administered in accordance to 2 CFR §200 Subpart E.
Questioned Cost: $ --
Recommendation
We recommend the County follow their internal control process to ensure that adequate documentation supports the accumulation of costs charged to the Program as required by 2 CFR §200 Subpart E.
Views of Responsible Officials and Planned Corrective Action
The County agrees with the finding and the recommendation. See Part IV Corrective Action Plan