Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Eligibility - Administering agencies may disburse program funds only to those organizations that meet eligibility requirements under the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program for Children (SMP), and Fresh Fruit and Vegetable Program (FFVP). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that its subrecipients met eligibility requirements. Context: The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For 2 of 40 subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and internal controls were not sufficient to ensure that it retained documentation of subrecipient eligibility. Effect: Failure to verify and maintain documentation of subrecipient eligibility could allow the Commonwealth to issue program payments to subrecipients that are not eligible to receive payments under the program. Recommendation: The Department should enhance its policies and procedures to ensure that it retains copies of permanent agreements where subrecipient eligibility is documented and that this documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Twenty-three of forty subrecipients selected for testing were not reported timely to FSRS during FY 2022. The subawards were reported from one to two months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported timely to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Eligibility - Administering agencies may disburse program funds only to those organizations that meet eligibility requirements under the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program for Children (SMP), and Fresh Fruit and Vegetable Program (FFVP). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that its subrecipients met eligibility requirements. Context: The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For 2 of 40 subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and internal controls were not sufficient to ensure that it retained documentation of subrecipient eligibility. Effect: Failure to verify and maintain documentation of subrecipient eligibility could allow the Commonwealth to issue program payments to subrecipients that are not eligible to receive payments under the program. Recommendation: The Department should enhance its policies and procedures to ensure that it retains copies of permanent agreements where subrecipient eligibility is documented and that this documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Twenty-three of forty subrecipients selected for testing were not reported timely to FSRS during FY 2022. The subawards were reported from one to two months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported timely to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child and Adult Care Food Program, COVID-19 ? Child and Adult Care Food Program Assistance Listing Number: 10.558 Award Number and Year: 202120N202044 (10/1/2020 ? 9/30/2021), 202120H170644 (12/27/2020 ? 9/30/2021), 202222N202044 (10/1/2021 ? 9/30/2022), 202222N115044 (10/1/2021 ? 9/30/2022), 202221N115044 (10/1/2021 ? 9/30/2023) Compliance Requirement: Eligibility and Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Eligibility ? Per 7 CFR section 226.2, subrecipients must meet the definition of ?independent center? or ?sponsoring organization?. In addition, all institutions must also meet the eligibility requirements stated in 7 CFR section 226.15 and 42 USC 1766(a)(6) and (d)(l). Definitions include: (1) Independent center means a child care center, at-risk afterschool care center, emergency shelter, outside-school-hours care center or adult day care center which enters into an agreement with the state agency to assume final administrative and financial responsibility for program operations. (2) Sponsoring organization means a public or nonprofit private organization that is entirely responsible for the administration of the food program. (3) For-profit center means a child care center, outside-school-hours care center, or adult day care center providing nonresidential care to adults or children that does not qualify for tax-exempt status under the Internal Revenue Code of 1986. For-profit centers serving adults must meet the criteria described in paragraph (a) of this definition. For-profit centers serving children must meet the criteria described in paragraphs (b )(1) or (b )(2) of this definition, except that children who only participate in the at-risk afterschool snack and/or meal component of the program must not be considered in determining the percentages under paragraphs (b )( 1) or (b)(2) of this definition. Subrecipient Monitoring ? Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that it issued subawards in compliance with federal regulations. Context: Forty subawards were selected for testing and the following exceptions were noted: ? For forty of forty subawards selected for testing, the Federal Award Identification Number (FAIN) was not provided to the subrecipient. ? For one of forty subawards selected for testing, the Department could not provide documentation that it had obtained the subrecipient?s Unique Entity Identifier. ? The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For three of forty subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were issued in compliance with federal regulations. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Failure to ensure subrecipients are eligible to receive program funding could result in unauthorized entities receiving program funding. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all subrecipients are eligible to receive program funds, that required information is included in all subawards, that it retains copies of all subaward agreements, and that documentation is readily available for audit. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child and Adult Care Food Program, COVID-19 ? Child and Adult Care Food Program Assistance Listing Number: 10.558 Award Number and Year: 202120N202044 (10/1/2020 ? 9/30/2021), 202120H170644 (12/27/2020 ? 9/30/2021), 202222N202044 (10/1/2021 ? 9/30/2022), 202222N115044 (10/1/2021 ? 9/30/2022), 202221N115044 (10/1/2021 ? 9/30/2023) Compliance Requirement: Eligibility and Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Eligibility ? Per 7 CFR section 226.2, subrecipients must meet the definition of ?independent center? or ?sponsoring organization?. In addition, all institutions must also meet the eligibility requirements stated in 7 CFR section 226.15 and 42 USC 1766(a)(6) and (d)(l). Definitions include: (1) Independent center means a child care center, at-risk afterschool care center, emergency shelter, outside-school-hours care center or adult day care center which enters into an agreement with the state agency to assume final administrative and financial responsibility for program operations. (2) Sponsoring organization means a public or nonprofit private organization that is entirely responsible for the administration of the food program. (3) For-profit center means a child care center, outside-school-hours care center, or adult day care center providing nonresidential care to adults or children that does not qualify for tax-exempt status under the Internal Revenue Code of 1986. For-profit centers serving adults must meet the criteria described in paragraph (a) of this definition. For-profit centers serving children must meet the criteria described in paragraphs (b )(1) or (b )(2) of this definition, except that children who only participate in the at-risk afterschool snack and/or meal component of the program must not be considered in determining the percentages under paragraphs (b )( 1) or (b)(2) of this definition. Subrecipient Monitoring ? Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that it issued subawards in compliance with federal regulations. Context: Forty subawards were selected for testing and the following exceptions were noted: ? For forty of forty subawards selected for testing, the Federal Award Identification Number (FAIN) was not provided to the subrecipient. ? For one of forty subawards selected for testing, the Department could not provide documentation that it had obtained the subrecipient?s Unique Entity Identifier. ? The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For three of forty subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were issued in compliance with federal regulations. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Failure to ensure subrecipients are eligible to receive program funding could result in unauthorized entities receiving program funding. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all subrecipients are eligible to receive program funds, that required information is included in all subawards, that it retains copies of all subaward agreements, and that documentation is readily available for audit. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Eligibility - Administering agencies may disburse program funds only to those organizations that meet eligibility requirements under the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program for Children (SMP), and Fresh Fruit and Vegetable Program (FFVP). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that its subrecipients met eligibility requirements. Context: The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For 2 of 40 subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and internal controls were not sufficient to ensure that it retained documentation of subrecipient eligibility. Effect: Failure to verify and maintain documentation of subrecipient eligibility could allow the Commonwealth to issue program payments to subrecipients that are not eligible to receive payments under the program. Recommendation: The Department should enhance its policies and procedures to ensure that it retains copies of permanent agreements where subrecipient eligibility is documented and that this documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Twenty-three of forty subrecipients selected for testing were not reported timely to FSRS during FY 2022. The subawards were reported from one to two months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported timely to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Eligibility - Administering agencies may disburse program funds only to those organizations that meet eligibility requirements under the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program for Children (SMP), and Fresh Fruit and Vegetable Program (FFVP). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that its subrecipients met eligibility requirements. Context: The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For 2 of 40 subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and internal controls were not sufficient to ensure that it retained documentation of subrecipient eligibility. Effect: Failure to verify and maintain documentation of subrecipient eligibility could allow the Commonwealth to issue program payments to subrecipients that are not eligible to receive payments under the program. Recommendation: The Department should enhance its policies and procedures to ensure that it retains copies of permanent agreements where subrecipient eligibility is documented and that this documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Twenty-three of forty subrecipients selected for testing were not reported timely to FSRS during FY 2022. The subawards were reported from one to two months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported timely to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Eligibility - Administering agencies may disburse program funds only to those organizations that meet eligibility requirements under the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program for Children (SMP), and Fresh Fruit and Vegetable Program (FFVP). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that its subrecipients met eligibility requirements. Context: The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For 2 of 40 subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and internal controls were not sufficient to ensure that it retained documentation of subrecipient eligibility. Effect: Failure to verify and maintain documentation of subrecipient eligibility could allow the Commonwealth to issue program payments to subrecipients that are not eligible to receive payments under the program. Recommendation: The Department should enhance its policies and procedures to ensure that it retains copies of permanent agreements where subrecipient eligibility is documented and that this documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Twenty-three of forty subrecipients selected for testing were not reported timely to FSRS during FY 2022. The subawards were reported from one to two months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported timely to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-005 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Matching Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state is required to provide 50 percent of the amounts paid to the majority of eligible Extended Benefits (EB) claimants (those not covered by federal law or special provisions of state law) (20 CFR sections 615.2 and 615.14(a)). Those EB amounts paid by the State Workforce Agency (SWA), and that are not the responsibility of the state, are reimbursable to the state from the Unemployment Trust Fund (UTF) (20 CFR section 615.14). The first week of EB is reimbursable to the state only if, in addition to other requirements, the state requires the first week of an individual?s benefit year to be an ?unpaid waiting week?. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that it had provided the required 50 percent of matching funds for Extended Benefits. Context: The Department was unable to provide documentation that it provided 50 percent of the amount paid to Extended Benefits claimants nor that it had an approved federal waiver stating that the Department was not required to match these funds. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it provided the required 50 percent match for Extended Benefits payments. Effect: The Department claimed Federal reimbursement for the State share of costs of the program. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that it is in compliance with the matching requirements of the program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-006 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Under state Unemployment Compensation (UC) laws, a worker?s benefit rights depend on the amount of the worker?s wages and/or weeks of work in covered employment in a ?base period.? While most states define the base period as the first four of the last five completed calendar quarters prior to the filing of the claim, other base periods may be used. To qualify for benefits, a claimant must have earned a certain amount of wages or have worked a certain number of weeks or calendar quarters within the base period or meet some combination of wage and employment requirements. Some states require a waiting period of one week of total or partial unemployment before UC is payable. A ?waiting period? is a non-compensable period of unemployment in which the worker is otherwise eligible for benefits. To be eligible to receive UC, all states provide that a claimant must have been separated from suitable work for non-disqualifying reasons under state law (i.e., not because of such acts as leaving voluntarily without good cause or discharge for misconduct connected with work). After separation, they must be able and available for work, actively seeking work, legally authorized to work in the United States and must not have refused an offer of suitable work. Executive Office of Labor and Workforce Development procedures require that a monetary determination letter be sent to each claimant upon completion of eligibility determination and the calculation of the weekly benefit amount. This letter provides the claimant with an official notification that benefits have been approved. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: After completing eligibility determination for a claimant, the Executive Office of Labor and Workforce Development (the Department) did not send a monetary determination letter. Context: For one of sixty claimants selected for testing, the Department did not send a monetary determination letter to the claimant identifying the approved weekly benefit amount. Auditors were able to recalculate the weekly benefit amount from other sources and determined that it had been accurately calculated. Questioned costs: None noted. Cause: The Department?s procedures and controls were not sufficient to ensure it sent monetary determination letters to all claimants upon completion of eligibility determination. Effect: The Department was unable to provide documentation that it had sent a monetary determination letter to a claimant. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that it sends a monetary determination letter to all claimants upon completion of eligibility determination. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-007 Prior Year Finding: 2021-009 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: ETA 9130, Financial Status Report, UI Programs ? This report is used to report program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. A separate ETA 9130 is submitted for each of the following: UI, PEUC, and PUA Administration, DUA, TRA/RTAA, and UA Projects (administration and benefits). See TEGL No. 02-16 for specific and clarifying instructions about the ETA 9130. Per 9130 guidelines the report is submitted via an on-line reporting system. The report submission process is 3-steps (1) secondary contact enters in the data (2) primary contact is responsible for certifying the accuracy of the data by entering the PIN (3) DOl/ETA is responsible for reviewing the FSR, communicating with the grantee and accepting the report within 10 working days after certification. Quarterly reporting deadlines: May 15 (March end date), August 14 (June 30 end date), November 14 (September end date), February 14 (December 31 end date). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: ETA 9130 reports submitted by the Executive Office of Labor and Workforce Development (the Department) did not agree to supporting documentation. In addition, several reports were not submitted timely. Context: Reports for the 12/31/2021 and 6/30/2022 quarters were selected for testing, which resulted in testing eleven individual reports. The following exceptions were noted: ? For ten of eleven reports, current period and cumulative indirect expenditures were included in supporting documentation but were not included in the report. ? For three of eleven reports, the federal share of expenditures in the previous period and current period did not agree to supporting documentation. The cumulative federal share of expenditures did tie to supporting documentation. ? For one of eleven reports, the federal share of expenditures in the previous period, current period and cumulative did not agree to supporting documentation. In addition, the federal share of unliquidated obligations, total federal share of obligations and unliquidated balance of federal funds did not agree to supporting documentation. This resulted in an underreporting of the Federal share. ? Six of eleven reports were not submitted timely. The reports were submitted from one to four days late. Questioned costs: None noted, as the reporting errors did not result in an overclaim of the federal share of expenditures. Cause: The Department does not have sufficient internal controls in place over compliance of the ETA 9130 reporting process. Effect: ETA 9130 reports did not agree to supporting documentation and were submitted late. Recommendation: We recommend that policies and procedures be enhanced to ensure that financial reports are filed timely and accurately. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Special Tests and Provisions ? Match with IRS 940 FUTA Tax Form Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: States are required to annually certify for each taxpayer the total amount of contributions required to be paid under the state law for the calendar year and the amounts and dates of such payments in order for the taxpayer to be allowed the credit against the Federal Unemployment (FUTA) tax (26 CFR sections 31.3302(a)-3(a)). In order to accomplish this certification, states annually perform a match of employer tax payments with credit claimed for these payments on the employer?s IRS 940 FUTA tax form. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) did not complete the annual match of employer tax payments with IRS 940 FUTA tax forms on a timely basis. Context: The Department initiated the annual match process, but it was not completed until after auditors requested documentation that it had been performed. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it completed the annual FUTA tax certification process on a timely basis. Effect: Untimely annual FUTA tax certifications could result in unresolved errors in the payment of the FUTA tax and related credits taken by taxpayers. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that the annual match of employer tax payments with employers? IRS 940 FUTA tax forms is completed on a timely basis. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-009 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Special Tests and Provisions ? UI Benefit Payments Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The State Workforce Agency (SWA) is required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL?s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is exempted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied, and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of statistically sound random samples to the universe of all claims paid and denied in a state. Specifically, the SWA?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine if the administration of the UC program is consistent with state and federal law (20 CFR section 602.21(d)). As presented in the ET Handbook No. 395, the investigation involves a review of state agency records, as well as contacting the claimant, employers, and third parties (either in-person, by telephone, or by fax) to conduct new and original fact-finding related to all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to federal and state law as well as official policy. The following time limits are established for completion of all cases for the year. (The "year" includes all batches of weeks ending in the calendar year.): ? a minimum of 70 percent of cases must be completed within 60 days of the week ending date of the batch; ? 95 percent of cases must be completed within 90 days of the week ending date of the batch; ? a minimum of 98 percent of cases for the year must be completed within 120 days of the ending date of the calendar year. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) did not complete BAM case investigations within the time limits established in the ET Handbook No. 395. Context: Sixty cases were selected for testing. The Department did not meet the required time limits for closing cases within 90 or 120 days. Specifically, we noted the following exceptions: ? 90% of cases tested (54 of 60 cases) were closed within 90 days which is less than the required 95% ? 96.7% of cases tested (58 of 60 cases) were closed within 120 days which is less than the required 98% ? The remaining 3.3% of cases tested (2 of 60 cases) were closed from between 130 and 160 days. In addition, claims selected for testing by the Department must cover claims paid and denied claims. For 8 weeks selected for testing, only claims paid were selected for testing by the Department. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it met the required BAM investigation time limits for closing cases and to ensure all claim types were part of weekly testing. Effect: Noncompliance with BAM case investigation time limits could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that BAM case investigations are completed timely in accordance with the time limits established in the ET Handbook No. 395 and that both paid and denied claims are selected for testing. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-005 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Matching Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state is required to provide 50 percent of the amounts paid to the majority of eligible Extended Benefits (EB) claimants (those not covered by federal law or special provisions of state law) (20 CFR sections 615.2 and 615.14(a)). Those EB amounts paid by the State Workforce Agency (SWA), and that are not the responsibility of the state, are reimbursable to the state from the Unemployment Trust Fund (UTF) (20 CFR section 615.14). The first week of EB is reimbursable to the state only if, in addition to other requirements, the state requires the first week of an individual?s benefit year to be an ?unpaid waiting week?. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that it had provided the required 50 percent of matching funds for Extended Benefits. Context: The Department was unable to provide documentation that it provided 50 percent of the amount paid to Extended Benefits claimants nor that it had an approved federal waiver stating that the Department was not required to match these funds. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it provided the required 50 percent match for Extended Benefits payments. Effect: The Department claimed Federal reimbursement for the State share of costs of the program. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that it is in compliance with the matching requirements of the program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-006 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Under state Unemployment Compensation (UC) laws, a worker?s benefit rights depend on the amount of the worker?s wages and/or weeks of work in covered employment in a ?base period.? While most states define the base period as the first four of the last five completed calendar quarters prior to the filing of the claim, other base periods may be used. To qualify for benefits, a claimant must have earned a certain amount of wages or have worked a certain number of weeks or calendar quarters within the base period or meet some combination of wage and employment requirements. Some states require a waiting period of one week of total or partial unemployment before UC is payable. A ?waiting period? is a non-compensable period of unemployment in which the worker is otherwise eligible for benefits. To be eligible to receive UC, all states provide that a claimant must have been separated from suitable work for non-disqualifying reasons under state law (i.e., not because of such acts as leaving voluntarily without good cause or discharge for misconduct connected with work). After separation, they must be able and available for work, actively seeking work, legally authorized to work in the United States and must not have refused an offer of suitable work. Executive Office of Labor and Workforce Development procedures require that a monetary determination letter be sent to each claimant upon completion of eligibility determination and the calculation of the weekly benefit amount. This letter provides the claimant with an official notification that benefits have been approved. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: After completing eligibility determination for a claimant, the Executive Office of Labor and Workforce Development (the Department) did not send a monetary determination letter. Context: For one of sixty claimants selected for testing, the Department did not send a monetary determination letter to the claimant identifying the approved weekly benefit amount. Auditors were able to recalculate the weekly benefit amount from other sources and determined that it had been accurately calculated. Questioned costs: None noted. Cause: The Department?s procedures and controls were not sufficient to ensure it sent monetary determination letters to all claimants upon completion of eligibility determination. Effect: The Department was unable to provide documentation that it had sent a monetary determination letter to a claimant. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that it sends a monetary determination letter to all claimants upon completion of eligibility determination. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-007 Prior Year Finding: 2021-009 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: ETA 9130, Financial Status Report, UI Programs ? This report is used to report program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. A separate ETA 9130 is submitted for each of the following: UI, PEUC, and PUA Administration, DUA, TRA/RTAA, and UA Projects (administration and benefits). See TEGL No. 02-16 for specific and clarifying instructions about the ETA 9130. Per 9130 guidelines the report is submitted via an on-line reporting system. The report submission process is 3-steps (1) secondary contact enters in the data (2) primary contact is responsible for certifying the accuracy of the data by entering the PIN (3) DOl/ETA is responsible for reviewing the FSR, communicating with the grantee and accepting the report within 10 working days after certification. Quarterly reporting deadlines: May 15 (March end date), August 14 (June 30 end date), November 14 (September end date), February 14 (December 31 end date). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: ETA 9130 reports submitted by the Executive Office of Labor and Workforce Development (the Department) did not agree to supporting documentation. In addition, several reports were not submitted timely. Context: Reports for the 12/31/2021 and 6/30/2022 quarters were selected for testing, which resulted in testing eleven individual reports. The following exceptions were noted: ? For ten of eleven reports, current period and cumulative indirect expenditures were included in supporting documentation but were not included in the report. ? For three of eleven reports, the federal share of expenditures in the previous period and current period did not agree to supporting documentation. The cumulative federal share of expenditures did tie to supporting documentation. ? For one of eleven reports, the federal share of expenditures in the previous period, current period and cumulative did not agree to supporting documentation. In addition, the federal share of unliquidated obligations, total federal share of obligations and unliquidated balance of federal funds did not agree to supporting documentation. This resulted in an underreporting of the Federal share. ? Six of eleven reports were not submitted timely. The reports were submitted from one to four days late. Questioned costs: None noted, as the reporting errors did not result in an overclaim of the federal share of expenditures. Cause: The Department does not have sufficient internal controls in place over compliance of the ETA 9130 reporting process. Effect: ETA 9130 reports did not agree to supporting documentation and were submitted late. Recommendation: We recommend that policies and procedures be enhanced to ensure that financial reports are filed timely and accurately. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Special Tests and Provisions ? Match with IRS 940 FUTA Tax Form Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: States are required to annually certify for each taxpayer the total amount of contributions required to be paid under the state law for the calendar year and the amounts and dates of such payments in order for the taxpayer to be allowed the credit against the Federal Unemployment (FUTA) tax (26 CFR sections 31.3302(a)-3(a)). In order to accomplish this certification, states annually perform a match of employer tax payments with credit claimed for these payments on the employer?s IRS 940 FUTA tax form. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) did not complete the annual match of employer tax payments with IRS 940 FUTA tax forms on a timely basis. Context: The Department initiated the annual match process, but it was not completed until after auditors requested documentation that it had been performed. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it completed the annual FUTA tax certification process on a timely basis. Effect: Untimely annual FUTA tax certifications could result in unresolved errors in the payment of the FUTA tax and related credits taken by taxpayers. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that the annual match of employer tax payments with employers? IRS 940 FUTA tax forms is completed on a timely basis. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-009 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Special Tests and Provisions ? UI Benefit Payments Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The State Workforce Agency (SWA) is required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL?s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is exempted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied, and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of statistically sound random samples to the universe of all claims paid and denied in a state. Specifically, the SWA?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine if the administration of the UC program is consistent with state and federal law (20 CFR section 602.21(d)). As presented in the ET Handbook No. 395, the investigation involves a review of state agency records, as well as contacting the claimant, employers, and third parties (either in-person, by telephone, or by fax) to conduct new and original fact-finding related to all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to federal and state law as well as official policy. The following time limits are established for completion of all cases for the year. (The "year" includes all batches of weeks ending in the calendar year.): ? a minimum of 70 percent of cases must be completed within 60 days of the week ending date of the batch; ? 95 percent of cases must be completed within 90 days of the week ending date of the batch; ? a minimum of 98 percent of cases for the year must be completed within 120 days of the ending date of the calendar year. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) did not complete BAM case investigations within the time limits established in the ET Handbook No. 395. Context: Sixty cases were selected for testing. The Department did not meet the required time limits for closing cases within 90 or 120 days. Specifically, we noted the following exceptions: ? 90% of cases tested (54 of 60 cases) were closed within 90 days which is less than the required 95% ? 96.7% of cases tested (58 of 60 cases) were closed within 120 days which is less than the required 98% ? The remaining 3.3% of cases tested (2 of 60 cases) were closed from between 130 and 160 days. In addition, claims selected for testing by the Department must cover claims paid and denied claims. For 8 weeks selected for testing, only claims paid were selected for testing by the Department. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it met the required BAM investigation time limits for closing cases and to ensure all claim types were part of weekly testing. Effect: Noncompliance with BAM case investigation time limits could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that BAM case investigations are completed timely in accordance with the time limits established in the ET Handbook No. 395 and that both paid and denied claims are selected for testing. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-010 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? ETA 9130 Financial Report Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: ETA 9130, Financial Report ? All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. A separate ETA 9130 is submitted for each of these categories. Funds reserved and set aside for PFP contract strategies are required to be reported on ETA 9130 basic reports for each WIOA fund source utilized. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that ETA 9130 reports were completed and submitted in accordance with program requirements. Context: Reports for the 9/30/2021 and 6/30/2022 quarters were selected for testing. Separate reports are required to be submitted for each category and reporting level, resulting in a total of 75 samples selected for testing. The following exceptions were noted: ? 47 of 75 reports were not submitted timely. ? 4 of 75 reports were incomplete. ? 19 of 75 reports did not agree to supporting documentation. ? For 9 of 75 reports, documentation could not be provided that the reports had been reviewed by the Budget Supervisor and certified by the Director of Insurance. Cause: The Department?s procedures were not sufficient to ensure that ETA 9130 reports were completed in accordance with program requirements and that they were reviewed and approved prior to submission. Internal controls did not prevent or detect the errors. Effect: Reports were consistently submitted late and did not agree to supporting documentation. A lack of review and approval of reports could allow incorrect data to be reported for the program which could misrepresent the State?s financial performance in the program. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over financial reporting to ensure that ETA 9130 reports are completed and submitted in accordance with program requirements. We further recommend that internal controls are enhanced to ensure that reports are reviewed and approved prior to submission. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-011 Prior Year Finding: 2021-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Executive Office of Labor and Workforce Development (Department) did not report subaward information to FSRS. Context: Six subawards, including one subaward amendment, were selected for testing, totaling $10,422,414. None of the six subawards were reported to FSRS as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Allowable Costs/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR ? 200.430 (a), 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: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR ? 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, ? Be incorporated into the official records of the non-Federal entity, ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, ? Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, ? Comply with the established accounting policies and practices of the non-Federal entity, ? Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: One of sixty employee timesheets selected for testing did not use combination codes and the employee?s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee?s actual time and effort on the program. The program incurs direct payroll charges which represents approximately $5.8 million (17%) of total WIOA cluster spending. The Department implemented the use of combination codes within Self-Service Time and Attendance (SSTA), a module of the HR/CMS application in July 2019. Prior to this date, payroll was assigned to grants based on budgeted time and effort allocations maintained in the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). SSTA combination codes are used by employees to allocate and certify hours worked to Federal grants and employees? supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system will default to budgeted grant allocations entered into LCM. Cause: The Department?s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Payroll charges allocated to grants based on budgeted time and effort can result in federal reimbursements that are not reflective of actual time and effort working on a grant. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-013 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Monitoring - Per 2 CFR section 200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1)(xii) Assistance Listing number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at time of disbursement. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (Department) did not include all required information in a subaward agreement. Context: For one of six subawards selected for testing, the assistance listing number and federal award title was not included in the subaward agreement. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards included all required information. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that all required information is included in its subawards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-010 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? ETA 9130 Financial Report Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: ETA 9130, Financial Report ? All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. A separate ETA 9130 is submitted for each of these categories. Funds reserved and set aside for PFP contract strategies are required to be reported on ETA 9130 basic reports for each WIOA fund source utilized. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that ETA 9130 reports were completed and submitted in accordance with program requirements. Context: Reports for the 9/30/2021 and 6/30/2022 quarters were selected for testing. Separate reports are required to be submitted for each category and reporting level, resulting in a total of 75 samples selected for testing. The following exceptions were noted: ? 47 of 75 reports were not submitted timely. ? 4 of 75 reports were incomplete. ? 19 of 75 reports did not agree to supporting documentation. ? For 9 of 75 reports, documentation could not be provided that the reports had been reviewed by the Budget Supervisor and certified by the Director of Insurance. Cause: The Department?s procedures were not sufficient to ensure that ETA 9130 reports were completed in accordance with program requirements and that they were reviewed and approved prior to submission. Internal controls did not prevent or detect the errors. Effect: Reports were consistently submitted late and did not agree to supporting documentation. A lack of review and approval of reports could allow incorrect data to be reported for the program which could misrepresent the State?s financial performance in the program. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over financial reporting to ensure that ETA 9130 reports are completed and submitted in accordance with program requirements. We further recommend that internal controls are enhanced to ensure that reports are reviewed and approved prior to submission. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-011 Prior Year Finding: 2021-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Executive Office of Labor and Workforce Development (Department) did not report subaward information to FSRS. Context: Six subawards, including one subaward amendment, were selected for testing, totaling $10,422,414. None of the six subawards were reported to FSRS as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Allowable Costs/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR ? 200.430 (a), 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: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR ? 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, ? Be incorporated into the official records of the non-Federal entity, ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, ? Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, ? Comply with the established accounting policies and practices of the non-Federal entity, ? Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: One of sixty employee timesheets selected for testing did not use combination codes and the employee?s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee?s actual time and effort on the program. The program incurs direct payroll charges which represents approximately $5.8 million (17%) of total WIOA cluster spending. The Department implemented the use of combination codes within Self-Service Time and Attendance (SSTA), a module of the HR/CMS application in July 2019. Prior to this date, payroll was assigned to grants based on budgeted time and effort allocations maintained in the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). SSTA combination codes are used by employees to allocate and certify hours worked to Federal grants and employees? supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system will default to budgeted grant allocations entered into LCM. Cause: The Department?s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Payroll charges allocated to grants based on budgeted time and effort can result in federal reimbursements that are not reflective of actual time and effort working on a grant. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-013 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Monitoring - Per 2 CFR section 200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1)(xii) Assistance Listing number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at time of disbursement. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (Department) did not include all required information in a subaward agreement. Context: For one of six subawards selected for testing, the assistance listing number and federal award title was not included in the subaward agreement. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards included all required information. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that all required information is included in its subawards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-010 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? ETA 9130 Financial Report Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: ETA 9130, Financial Report ? All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. A separate ETA 9130 is submitted for each of these categories. Funds reserved and set aside for PFP contract strategies are required to be reported on ETA 9130 basic reports for each WIOA fund source utilized. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that ETA 9130 reports were completed and submitted in accordance with program requirements. Context: Reports for the 9/30/2021 and 6/30/2022 quarters were selected for testing. Separate reports are required to be submitted for each category and reporting level, resulting in a total of 75 samples selected for testing. The following exceptions were noted: ? 47 of 75 reports were not submitted timely. ? 4 of 75 reports were incomplete. ? 19 of 75 reports did not agree to supporting documentation. ? For 9 of 75 reports, documentation could not be provided that the reports had been reviewed by the Budget Supervisor and certified by the Director of Insurance. Cause: The Department?s procedures were not sufficient to ensure that ETA 9130 reports were completed in accordance with program requirements and that they were reviewed and approved prior to submission. Internal controls did not prevent or detect the errors. Effect: Reports were consistently submitted late and did not agree to supporting documentation. A lack of review and approval of reports could allow incorrect data to be reported for the program which could misrepresent the State?s financial performance in the program. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over financial reporting to ensure that ETA 9130 reports are completed and submitted in accordance with program requirements. We further recommend that internal controls are enhanced to ensure that reports are reviewed and approved prior to submission. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-011 Prior Year Finding: 2021-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Executive Office of Labor and Workforce Development (Department) did not report subaward information to FSRS. Context: Six subawards, including one subaward amendment, were selected for testing, totaling $10,422,414. None of the six subawards were reported to FSRS as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Allowable Costs/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR ? 200.430 (a), 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: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR ? 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, ? Be incorporated into the official records of the non-Federal entity, ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, ? Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, ? Comply with the established accounting policies and practices of the non-Federal entity, ? Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: One of sixty employee timesheets selected for testing did not use combination codes and the employee?s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee?s actual time and effort on the program. The program incurs direct payroll charges which represents approximately $5.8 million (17%) of total WIOA cluster spending. The Department implemented the use of combination codes within Self-Service Time and Attendance (SSTA), a module of the HR/CMS application in July 2019. Prior to this date, payroll was assigned to grants based on budgeted time and effort allocations maintained in the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). SSTA combination codes are used by employees to allocate and certify hours worked to Federal grants and employees? supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system will default to budgeted grant allocations entered into LCM. Cause: The Department?s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Payroll charges allocated to grants based on budgeted time and effort can result in federal reimbursements that are not reflective of actual time and effort working on a grant. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-013 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Monitoring - Per 2 CFR section 200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1)(xii) Assistance Listing number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at time of disbursement. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (Department) did not include all required information in a subaward agreement. Context: For one of six subawards selected for testing, the assistance listing number and federal award title was not included in the subaward agreement. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards included all required information. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that all required information is included in its subawards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-014 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Department of Transportation Federal Program: Highway Planning and Construction Cluster, COVID-19 ? Highway Planning and Construction Cluster Assistance Listing Number: 20.205, 20.219 Award Number and Year: (2021-2022) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Transportation (Department) could not provide support that it ensured its subrecipients were not suspended or debarred before issuing subawards to the entities. Context: The suspension and debarment status for 32 of 40 subrecipients selected for testing was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Department did not establish effective internal controls for maintaining sufficient evidence that a suspension and debarment check was completed before issuing subawards. Effect: If the suspension and debarment status of subrecipients is not verified when entering into covered transactions, it is possible that a subaward could be issued to an ineligible entity. Recommendation: We recommend the Department implement controls and procedures to ensure it maintains documentation of suspension and debarments checks and that the documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-014 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Department of Transportation Federal Program: Highway Planning and Construction Cluster, COVID-19 ? Highway Planning and Construction Cluster Assistance Listing Number: 20.205, 20.219 Award Number and Year: (2021-2022) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Transportation (Department) could not provide support that it ensured its subrecipients were not suspended or debarred before issuing subawards to the entities. Context: The suspension and debarment status for 32 of 40 subrecipients selected for testing was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Department did not establish effective internal controls for maintaining sufficient evidence that a suspension and debarment check was completed before issuing subawards. Effect: If the suspension and debarment status of subrecipients is not verified when entering into covered transactions, it is possible that a subaward could be issued to an ineligible entity. Recommendation: We recommend the Department implement controls and procedures to ensure it maintains documentation of suspension and debarments checks and that the documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-014 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Department of Transportation Federal Program: Highway Planning and Construction Cluster, COVID-19 ? Highway Planning and Construction Cluster Assistance Listing Number: 20.205, 20.219 Award Number and Year: (2021-2022) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Transportation (Department) could not provide support that it ensured its subrecipients were not suspended or debarred before issuing subawards to the entities. Context: The suspension and debarment status for 32 of 40 subrecipients selected for testing was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Department did not establish effective internal controls for maintaining sufficient evidence that a suspension and debarment check was completed before issuing subawards. Effect: If the suspension and debarment status of subrecipients is not verified when entering into covered transactions, it is possible that a subaward could be issued to an ineligible entity. Recommendation: We recommend the Department implement controls and procedures to ensure it maintains documentation of suspension and debarments checks and that the documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-015 Prior Year Finding: 2021-018 Federal Agency: U.S. Department of the Treasury State Agency: Executive Officeof Housing and Livable Communities Federal Program: COVID-19 ? Emergency Rental Assistance Assistance Listing Number: 21.023 Award Number and Year: ERA-1 (12/27/2020 ? 9/30/2022), ERA-2 (5/1/2021 ? 9/30/2025) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Emergency Rental Assistance (ERA) 1 and ERA 2 state, local, and territorial recipients were required to submit monthly and quarterly reports to the United States Department of the Treasury (U.S. Treasury). Monthly reports are brief two-question updates through which ERA recipients provide U.S. Treasury with very high-level counts of the numbers of households receiving assistance and the amounts of ERA funds distributed. Monthly reports are due 15 days after the end of each month, with the exception of the December 2021 monthly report which was due January 18, 2022. Quarterly reports are in-depth reports with data on an array of programmatic and financial information to provide transparency in the use and progress of ERA funds. Monthly reports were required for each month of Fiscal Year 2022 and were due 15 days after the end of the month. Quarterly reports were required for each quarter of Fiscal Year 2022 and were due October 29, 2021, February 1, 2022, April 15, 2022, and July 15, 2022. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Monthly reports for the period ending December 31, 2021 were not submitted timely by the Executive Office of Housing and Livable Communities (the Department). Context: We selected a sample of eight monthly reports (four each for ERA-1 and ERA-2) and four quarterly reports (two each for ERA-1 and ERA-2). We noted that the 12/31/2021 monthly reports for both ERA-1 and ERA-2 were due by 1/15/2022, but they were submitted on 3/18/2022, or 62 days late. Cause: The Department?s procedures and internal controls were not sufficient to ensure that monthly reports were submitted timely. Effect: The Department was not in compliance with monthly reporting requirements. Questioned costs: None. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that monthly reports are submitted timely. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: ESSER grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. The CARES Act requires ESSER grantees to submit quarterly reports. This reporting requirement is satisfied through grantees? submission of the required monthly FFATA data through FSRS.gov. This monthly subaward data reported by States, along with data on awards to States, are pulled into the ESF Transparency Portal. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Year 2 Annual Report submitted by the Department of Elementary and Secondary Education (Department) for ESSER I did not agree to supporting documentation. Further, subaward information used for quarterly reports was not submitted to FSRS timely. Context: The Year 2 annual report submitted by the Department for ESSER I did not agree to supporting documentation. A variance of $37,604 was noted in the total amount expended on subrecipients in the prior year and the total amount of reserve expended directly in the prior reporting period. Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS, therefore, monthly FFATA data used to satisfy the quarterly reporting requirements was untimely. The subawards were reported to FSRS from one or four months later than required by FFATA reporting requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that the amounts reported for ESSER I agreed to supporting documentation nor that monthly subaward data used to satisfy quarterly reporting requirements was reported timely to FSRS. Effect: The total amount of prior year and current year subrecipient expenditures reported on the Year 2 Annual Report for ESSER I did not agree to supporting documentation. Monthly FFATA data used to satisfy quarterly reporting requirements was not submitted timely. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that amounts reported on the Annual Report agree to supporting documentation. We further recommend that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in order to satisfy quarterly reporting requirements for the program. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-017 Prior Year Finding: 2021-019 Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS. The subawards were reported from one or four months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS no later than the end of the month following the month of issuance. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: ESSER grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. The CARES Act requires ESSER grantees to submit quarterly reports. This reporting requirement is satisfied through grantees? submission of the required monthly FFATA data through FSRS.gov. This monthly subaward data reported by States, along with data on awards to States, are pulled into the ESF Transparency Portal. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Year 2 Annual Report submitted by the Department of Elementary and Secondary Education (Department) for ESSER I did not agree to supporting documentation. Further, subaward information used for quarterly reports was not submitted to FSRS timely. Context: The Year 2 annual report submitted by the Department for ESSER I did not agree to supporting documentation. A variance of $37,604 was noted in the total amount expended on subrecipients in the prior year and the total amount of reserve expended directly in the prior reporting period. Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS, therefore, monthly FFATA data used to satisfy the quarterly reporting requirements was untimely. The subawards were reported to FSRS from one or four months later than required by FFATA reporting requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that the amounts reported for ESSER I agreed to supporting documentation nor that monthly subaward data used to satisfy quarterly reporting requirements was reported timely to FSRS. Effect: The total amount of prior year and current year subrecipient expenditures reported on the Year 2 Annual Report for ESSER I did not agree to supporting documentation. Monthly FFATA data used to satisfy quarterly reporting requirements was not submitted timely. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that amounts reported on the Annual Report agree to supporting documentation. We further recommend that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in order to satisfy quarterly reporting requirements for the program. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-017 Prior Year Finding: 2021-019 Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS. The subawards were reported from one or four months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS no later than the end of the month following the month of issuance. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-018 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Subaward information was not reported to FSRS during FY 2022. Context: None of the thirteen subrecipients selected for testing were reported to FSRS by the Executive Office of Housing and Livable Communities (the Department) during FY 2022. Total subawards selected were $90,808,866, and $0 was reported as required by FFATA requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Performance and Special Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: LIHEAP Performance Data Form (OMB No 0970-0449) ? For the year ending September 30, 2021, state grantees must submit this report by March 31, 2022. The first section of the report is the Grantee Survey that covers sources and allocation of funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service. LIHEAP Carryover and Reallotment Report (OMB No. 0970-0106) ? Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported. Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) ? As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Indian tribes are required to report only on the number of households served for each program component. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Housing and Livable Communities (the Department) did not submit performance and special reports timely. In addition, the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Context: Exceptions were noted for 2 of 3 reports selected for testing. We selected for testing the LIHEAP Performance Data Form, the LIHEAP Carryover and Reallotment Report, and the Annual Report on Households Assisted by LIHEAP that were due during FY2022. Specifically, we noted the following exceptions: ? The LIHEAP Performance Data Forms was not submitted timely. The report for the period ending 9/30/2021 was due by 3/31/2022 but was not submitted until 4/12/2022, or 12 days late. ? Several line items on the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Questioned costs: None noted. Cause: The Department?s procedures were not sufficient to ensure that performance and special reports were submitted timely nor that information reported on the Annual Report on Households Assisted by LIHEAP was accurate and agreed with supporting documentation. Internal controls did not prevent or detect the errors. Effect: Delays and inaccuracies in submission of annual performance and special reports could impact the Federal agency?s ability to manage the program, could result in delays in annual awards, and possible penalties or sanctions could be imposed by the grantor. Recommendation: We recommend that the Department review and enhance its procedures and internal controls to ensure that performance and special reports are submitted timely and that the information reported agrees to supporting documentation. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-018 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Subaward information was not reported to FSRS during FY 2022. Context: None of the thirteen subrecipients selected for testing were reported to FSRS by the Executive Office of Housing and Livable Communities (the Department) during FY 2022. Total subawards selected were $90,808,866, and $0 was reported as required by FFATA requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Performance and Special Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: LIHEAP Performance Data Form (OMB No 0970-0449) ? For the year ending September 30, 2021, state grantees must submit this report by March 31, 2022. The first section of the report is the Grantee Survey that covers sources and allocation of funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service. LIHEAP Carryover and Reallotment Report (OMB No. 0970-0106) ? Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported. Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) ? As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Indian tribes are required to report only on the number of households served for each program component. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Housing and Livable Communities (the Department) did not submit performance and special reports timely. In addition, the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Context: Exceptions were noted for 2 of 3 reports selected for testing. We selected for testing the LIHEAP Performance Data Form, the LIHEAP Carryover and Reallotment Report, and the Annual Report on Households Assisted by LIHEAP that were due during FY2022. Specifically, we noted the following exceptions: ? The LIHEAP Performance Data Forms was not submitted timely. The report for the period ending 9/30/2021 was due by 3/31/2022 but was not submitted until 4/12/2022, or 12 days late. ? Several line items on the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Questioned costs: None noted. Cause: The Department?s procedures were not sufficient to ensure that performance and special reports were submitted timely nor that information reported on the Annual Report on Households Assisted by LIHEAP was accurate and agreed with supporting documentation. Internal controls did not prevent or detect the errors. Effect: Delays and inaccuracies in submission of annual performance and special reports could impact the Federal agency?s ability to manage the program, could result in delays in annual awards, and possible penalties or sanctions could be imposed by the grantor. Recommendation: We recommend that the Department review and enhance its procedures and internal controls to ensure that performance and special reports are submitted timely and that the information reported agrees to supporting documentation. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Eligibility - Administering agencies may disburse program funds only to those organizations that meet eligibility requirements under the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program for Children (SMP), and Fresh Fruit and Vegetable Program (FFVP). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that its subrecipients met eligibility requirements. Context: The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For 2 of 40 subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and internal controls were not sufficient to ensure that it retained documentation of subrecipient eligibility. Effect: Failure to verify and maintain documentation of subrecipient eligibility could allow the Commonwealth to issue program payments to subrecipients that are not eligible to receive payments under the program. Recommendation: The Department should enhance its policies and procedures to ensure that it retains copies of permanent agreements where subrecipient eligibility is documented and that this documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Twenty-three of forty subrecipients selected for testing were not reported timely to FSRS during FY 2022. The subawards were reported from one to two months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported timely to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Eligibility - Administering agencies may disburse program funds only to those organizations that meet eligibility requirements under the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program for Children (SMP), and Fresh Fruit and Vegetable Program (FFVP). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that its subrecipients met eligibility requirements. Context: The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For 2 of 40 subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and internal controls were not sufficient to ensure that it retained documentation of subrecipient eligibility. Effect: Failure to verify and maintain documentation of subrecipient eligibility could allow the Commonwealth to issue program payments to subrecipients that are not eligible to receive payments under the program. Recommendation: The Department should enhance its policies and procedures to ensure that it retains copies of permanent agreements where subrecipient eligibility is documented and that this documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Twenty-three of forty subrecipients selected for testing were not reported timely to FSRS during FY 2022. The subawards were reported from one to two months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported timely to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child and Adult Care Food Program, COVID-19 ? Child and Adult Care Food Program Assistance Listing Number: 10.558 Award Number and Year: 202120N202044 (10/1/2020 ? 9/30/2021), 202120H170644 (12/27/2020 ? 9/30/2021), 202222N202044 (10/1/2021 ? 9/30/2022), 202222N115044 (10/1/2021 ? 9/30/2022), 202221N115044 (10/1/2021 ? 9/30/2023) Compliance Requirement: Eligibility and Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Eligibility ? Per 7 CFR section 226.2, subrecipients must meet the definition of ?independent center? or ?sponsoring organization?. In addition, all institutions must also meet the eligibility requirements stated in 7 CFR section 226.15 and 42 USC 1766(a)(6) and (d)(l). Definitions include: (1) Independent center means a child care center, at-risk afterschool care center, emergency shelter, outside-school-hours care center or adult day care center which enters into an agreement with the state agency to assume final administrative and financial responsibility for program operations. (2) Sponsoring organization means a public or nonprofit private organization that is entirely responsible for the administration of the food program. (3) For-profit center means a child care center, outside-school-hours care center, or adult day care center providing nonresidential care to adults or children that does not qualify for tax-exempt status under the Internal Revenue Code of 1986. For-profit centers serving adults must meet the criteria described in paragraph (a) of this definition. For-profit centers serving children must meet the criteria described in paragraphs (b )(1) or (b )(2) of this definition, except that children who only participate in the at-risk afterschool snack and/or meal component of the program must not be considered in determining the percentages under paragraphs (b )( 1) or (b)(2) of this definition. Subrecipient Monitoring ? Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that it issued subawards in compliance with federal regulations. Context: Forty subawards were selected for testing and the following exceptions were noted: ? For forty of forty subawards selected for testing, the Federal Award Identification Number (FAIN) was not provided to the subrecipient. ? For one of forty subawards selected for testing, the Department could not provide documentation that it had obtained the subrecipient?s Unique Entity Identifier. ? The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For three of forty subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were issued in compliance with federal regulations. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Failure to ensure subrecipients are eligible to receive program funding could result in unauthorized entities receiving program funding. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all subrecipients are eligible to receive program funds, that required information is included in all subawards, that it retains copies of all subaward agreements, and that documentation is readily available for audit. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child and Adult Care Food Program, COVID-19 ? Child and Adult Care Food Program Assistance Listing Number: 10.558 Award Number and Year: 202120N202044 (10/1/2020 ? 9/30/2021), 202120H170644 (12/27/2020 ? 9/30/2021), 202222N202044 (10/1/2021 ? 9/30/2022), 202222N115044 (10/1/2021 ? 9/30/2022), 202221N115044 (10/1/2021 ? 9/30/2023) Compliance Requirement: Eligibility and Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Eligibility ? Per 7 CFR section 226.2, subrecipients must meet the definition of ?independent center? or ?sponsoring organization?. In addition, all institutions must also meet the eligibility requirements stated in 7 CFR section 226.15 and 42 USC 1766(a)(6) and (d)(l). Definitions include: (1) Independent center means a child care center, at-risk afterschool care center, emergency shelter, outside-school-hours care center or adult day care center which enters into an agreement with the state agency to assume final administrative and financial responsibility for program operations. (2) Sponsoring organization means a public or nonprofit private organization that is entirely responsible for the administration of the food program. (3) For-profit center means a child care center, outside-school-hours care center, or adult day care center providing nonresidential care to adults or children that does not qualify for tax-exempt status under the Internal Revenue Code of 1986. For-profit centers serving adults must meet the criteria described in paragraph (a) of this definition. For-profit centers serving children must meet the criteria described in paragraphs (b )(1) or (b )(2) of this definition, except that children who only participate in the at-risk afterschool snack and/or meal component of the program must not be considered in determining the percentages under paragraphs (b )( 1) or (b)(2) of this definition. Subrecipient Monitoring ? Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that it issued subawards in compliance with federal regulations. Context: Forty subawards were selected for testing and the following exceptions were noted: ? For forty of forty subawards selected for testing, the Federal Award Identification Number (FAIN) was not provided to the subrecipient. ? For one of forty subawards selected for testing, the Department could not provide documentation that it had obtained the subrecipient?s Unique Entity Identifier. ? The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For three of forty subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were issued in compliance with federal regulations. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Failure to ensure subrecipients are eligible to receive program funding could result in unauthorized entities receiving program funding. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all subrecipients are eligible to receive program funds, that required information is included in all subawards, that it retains copies of all subaward agreements, and that documentation is readily available for audit. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Eligibility - Administering agencies may disburse program funds only to those organizations that meet eligibility requirements under the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program for Children (SMP), and Fresh Fruit and Vegetable Program (FFVP). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that its subrecipients met eligibility requirements. Context: The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For 2 of 40 subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and internal controls were not sufficient to ensure that it retained documentation of subrecipient eligibility. Effect: Failure to verify and maintain documentation of subrecipient eligibility could allow the Commonwealth to issue program payments to subrecipients that are not eligible to receive payments under the program. Recommendation: The Department should enhance its policies and procedures to ensure that it retains copies of permanent agreements where subrecipient eligibility is documented and that this documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Twenty-three of forty subrecipients selected for testing were not reported timely to FSRS during FY 2022. The subawards were reported from one to two months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported timely to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Eligibility - Administering agencies may disburse program funds only to those organizations that meet eligibility requirements under the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program for Children (SMP), and Fresh Fruit and Vegetable Program (FFVP). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that its subrecipients met eligibility requirements. Context: The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For 2 of 40 subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and internal controls were not sufficient to ensure that it retained documentation of subrecipient eligibility. Effect: Failure to verify and maintain documentation of subrecipient eligibility could allow the Commonwealth to issue program payments to subrecipients that are not eligible to receive payments under the program. Recommendation: The Department should enhance its policies and procedures to ensure that it retains copies of permanent agreements where subrecipient eligibility is documented and that this documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Twenty-three of forty subrecipients selected for testing were not reported timely to FSRS during FY 2022. The subawards were reported from one to two months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported timely to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Eligibility - Administering agencies may disburse program funds only to those organizations that meet eligibility requirements under the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program for Children (SMP), and Fresh Fruit and Vegetable Program (FFVP). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that its subrecipients met eligibility requirements. Context: The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. For 2 of 40 subrecipients selected for testing, the Department was unable to provide a copy of the approved permanent agreement, therefore, eligibility for these subrecipients could not be verified. Questioned costs: Undetermined. Cause: The Department?s procedures and internal controls were not sufficient to ensure that it retained documentation of subrecipient eligibility. Effect: Failure to verify and maintain documentation of subrecipient eligibility could allow the Commonwealth to issue program payments to subrecipients that are not eligible to receive payments under the program. Recommendation: The Department should enhance its policies and procedures to ensure that it retains copies of permanent agreements where subrecipient eligibility is documented and that this documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child Nutrition Cluster, COVID-19 ? Child Nutrition Cluster Assistance Listing Number: 10.555, 10.559, 10.582 Award Number and Year: 214MA303N1099 (10/1/2020 ? 9/30/2021), 214MA303N1199 (10/1/2020 ? 9/30/2021) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Twenty-three of forty subrecipients selected for testing were not reported timely to FSRS during FY 2022. The subawards were reported from one to two months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported timely to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-005 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Matching Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state is required to provide 50 percent of the amounts paid to the majority of eligible Extended Benefits (EB) claimants (those not covered by federal law or special provisions of state law) (20 CFR sections 615.2 and 615.14(a)). Those EB amounts paid by the State Workforce Agency (SWA), and that are not the responsibility of the state, are reimbursable to the state from the Unemployment Trust Fund (UTF) (20 CFR section 615.14). The first week of EB is reimbursable to the state only if, in addition to other requirements, the state requires the first week of an individual?s benefit year to be an ?unpaid waiting week?. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that it had provided the required 50 percent of matching funds for Extended Benefits. Context: The Department was unable to provide documentation that it provided 50 percent of the amount paid to Extended Benefits claimants nor that it had an approved federal waiver stating that the Department was not required to match these funds. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it provided the required 50 percent match for Extended Benefits payments. Effect: The Department claimed Federal reimbursement for the State share of costs of the program. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that it is in compliance with the matching requirements of the program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-006 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Under state Unemployment Compensation (UC) laws, a worker?s benefit rights depend on the amount of the worker?s wages and/or weeks of work in covered employment in a ?base period.? While most states define the base period as the first four of the last five completed calendar quarters prior to the filing of the claim, other base periods may be used. To qualify for benefits, a claimant must have earned a certain amount of wages or have worked a certain number of weeks or calendar quarters within the base period or meet some combination of wage and employment requirements. Some states require a waiting period of one week of total or partial unemployment before UC is payable. A ?waiting period? is a non-compensable period of unemployment in which the worker is otherwise eligible for benefits. To be eligible to receive UC, all states provide that a claimant must have been separated from suitable work for non-disqualifying reasons under state law (i.e., not because of such acts as leaving voluntarily without good cause or discharge for misconduct connected with work). After separation, they must be able and available for work, actively seeking work, legally authorized to work in the United States and must not have refused an offer of suitable work. Executive Office of Labor and Workforce Development procedures require that a monetary determination letter be sent to each claimant upon completion of eligibility determination and the calculation of the weekly benefit amount. This letter provides the claimant with an official notification that benefits have been approved. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: After completing eligibility determination for a claimant, the Executive Office of Labor and Workforce Development (the Department) did not send a monetary determination letter. Context: For one of sixty claimants selected for testing, the Department did not send a monetary determination letter to the claimant identifying the approved weekly benefit amount. Auditors were able to recalculate the weekly benefit amount from other sources and determined that it had been accurately calculated. Questioned costs: None noted. Cause: The Department?s procedures and controls were not sufficient to ensure it sent monetary determination letters to all claimants upon completion of eligibility determination. Effect: The Department was unable to provide documentation that it had sent a monetary determination letter to a claimant. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that it sends a monetary determination letter to all claimants upon completion of eligibility determination. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-007 Prior Year Finding: 2021-009 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: ETA 9130, Financial Status Report, UI Programs ? This report is used to report program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. A separate ETA 9130 is submitted for each of the following: UI, PEUC, and PUA Administration, DUA, TRA/RTAA, and UA Projects (administration and benefits). See TEGL No. 02-16 for specific and clarifying instructions about the ETA 9130. Per 9130 guidelines the report is submitted via an on-line reporting system. The report submission process is 3-steps (1) secondary contact enters in the data (2) primary contact is responsible for certifying the accuracy of the data by entering the PIN (3) DOl/ETA is responsible for reviewing the FSR, communicating with the grantee and accepting the report within 10 working days after certification. Quarterly reporting deadlines: May 15 (March end date), August 14 (June 30 end date), November 14 (September end date), February 14 (December 31 end date). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: ETA 9130 reports submitted by the Executive Office of Labor and Workforce Development (the Department) did not agree to supporting documentation. In addition, several reports were not submitted timely. Context: Reports for the 12/31/2021 and 6/30/2022 quarters were selected for testing, which resulted in testing eleven individual reports. The following exceptions were noted: ? For ten of eleven reports, current period and cumulative indirect expenditures were included in supporting documentation but were not included in the report. ? For three of eleven reports, the federal share of expenditures in the previous period and current period did not agree to supporting documentation. The cumulative federal share of expenditures did tie to supporting documentation. ? For one of eleven reports, the federal share of expenditures in the previous period, current period and cumulative did not agree to supporting documentation. In addition, the federal share of unliquidated obligations, total federal share of obligations and unliquidated balance of federal funds did not agree to supporting documentation. This resulted in an underreporting of the Federal share. ? Six of eleven reports were not submitted timely. The reports were submitted from one to four days late. Questioned costs: None noted, as the reporting errors did not result in an overclaim of the federal share of expenditures. Cause: The Department does not have sufficient internal controls in place over compliance of the ETA 9130 reporting process. Effect: ETA 9130 reports did not agree to supporting documentation and were submitted late. Recommendation: We recommend that policies and procedures be enhanced to ensure that financial reports are filed timely and accurately. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Special Tests and Provisions ? Match with IRS 940 FUTA Tax Form Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: States are required to annually certify for each taxpayer the total amount of contributions required to be paid under the state law for the calendar year and the amounts and dates of such payments in order for the taxpayer to be allowed the credit against the Federal Unemployment (FUTA) tax (26 CFR sections 31.3302(a)-3(a)). In order to accomplish this certification, states annually perform a match of employer tax payments with credit claimed for these payments on the employer?s IRS 940 FUTA tax form. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) did not complete the annual match of employer tax payments with IRS 940 FUTA tax forms on a timely basis. Context: The Department initiated the annual match process, but it was not completed until after auditors requested documentation that it had been performed. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it completed the annual FUTA tax certification process on a timely basis. Effect: Untimely annual FUTA tax certifications could result in unresolved errors in the payment of the FUTA tax and related credits taken by taxpayers. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that the annual match of employer tax payments with employers? IRS 940 FUTA tax forms is completed on a timely basis. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-009 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Special Tests and Provisions ? UI Benefit Payments Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The State Workforce Agency (SWA) is required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL?s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is exempted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied, and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of statistically sound random samples to the universe of all claims paid and denied in a state. Specifically, the SWA?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine if the administration of the UC program is consistent with state and federal law (20 CFR section 602.21(d)). As presented in the ET Handbook No. 395, the investigation involves a review of state agency records, as well as contacting the claimant, employers, and third parties (either in-person, by telephone, or by fax) to conduct new and original fact-finding related to all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to federal and state law as well as official policy. The following time limits are established for completion of all cases for the year. (The "year" includes all batches of weeks ending in the calendar year.): ? a minimum of 70 percent of cases must be completed within 60 days of the week ending date of the batch; ? 95 percent of cases must be completed within 90 days of the week ending date of the batch; ? a minimum of 98 percent of cases for the year must be completed within 120 days of the ending date of the calendar year. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) did not complete BAM case investigations within the time limits established in the ET Handbook No. 395. Context: Sixty cases were selected for testing. The Department did not meet the required time limits for closing cases within 90 or 120 days. Specifically, we noted the following exceptions: ? 90% of cases tested (54 of 60 cases) were closed within 90 days which is less than the required 95% ? 96.7% of cases tested (58 of 60 cases) were closed within 120 days which is less than the required 98% ? The remaining 3.3% of cases tested (2 of 60 cases) were closed from between 130 and 160 days. In addition, claims selected for testing by the Department must cover claims paid and denied claims. For 8 weeks selected for testing, only claims paid were selected for testing by the Department. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it met the required BAM investigation time limits for closing cases and to ensure all claim types were part of weekly testing. Effect: Noncompliance with BAM case investigation time limits could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that BAM case investigations are completed timely in accordance with the time limits established in the ET Handbook No. 395 and that both paid and denied claims are selected for testing. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-005 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Matching Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state is required to provide 50 percent of the amounts paid to the majority of eligible Extended Benefits (EB) claimants (those not covered by federal law or special provisions of state law) (20 CFR sections 615.2 and 615.14(a)). Those EB amounts paid by the State Workforce Agency (SWA), and that are not the responsibility of the state, are reimbursable to the state from the Unemployment Trust Fund (UTF) (20 CFR section 615.14). The first week of EB is reimbursable to the state only if, in addition to other requirements, the state requires the first week of an individual?s benefit year to be an ?unpaid waiting week?. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that it had provided the required 50 percent of matching funds for Extended Benefits. Context: The Department was unable to provide documentation that it provided 50 percent of the amount paid to Extended Benefits claimants nor that it had an approved federal waiver stating that the Department was not required to match these funds. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it provided the required 50 percent match for Extended Benefits payments. Effect: The Department claimed Federal reimbursement for the State share of costs of the program. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that it is in compliance with the matching requirements of the program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-006 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Under state Unemployment Compensation (UC) laws, a worker?s benefit rights depend on the amount of the worker?s wages and/or weeks of work in covered employment in a ?base period.? While most states define the base period as the first four of the last five completed calendar quarters prior to the filing of the claim, other base periods may be used. To qualify for benefits, a claimant must have earned a certain amount of wages or have worked a certain number of weeks or calendar quarters within the base period or meet some combination of wage and employment requirements. Some states require a waiting period of one week of total or partial unemployment before UC is payable. A ?waiting period? is a non-compensable period of unemployment in which the worker is otherwise eligible for benefits. To be eligible to receive UC, all states provide that a claimant must have been separated from suitable work for non-disqualifying reasons under state law (i.e., not because of such acts as leaving voluntarily without good cause or discharge for misconduct connected with work). After separation, they must be able and available for work, actively seeking work, legally authorized to work in the United States and must not have refused an offer of suitable work. Executive Office of Labor and Workforce Development procedures require that a monetary determination letter be sent to each claimant upon completion of eligibility determination and the calculation of the weekly benefit amount. This letter provides the claimant with an official notification that benefits have been approved. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: After completing eligibility determination for a claimant, the Executive Office of Labor and Workforce Development (the Department) did not send a monetary determination letter. Context: For one of sixty claimants selected for testing, the Department did not send a monetary determination letter to the claimant identifying the approved weekly benefit amount. Auditors were able to recalculate the weekly benefit amount from other sources and determined that it had been accurately calculated. Questioned costs: None noted. Cause: The Department?s procedures and controls were not sufficient to ensure it sent monetary determination letters to all claimants upon completion of eligibility determination. Effect: The Department was unable to provide documentation that it had sent a monetary determination letter to a claimant. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that it sends a monetary determination letter to all claimants upon completion of eligibility determination. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-007 Prior Year Finding: 2021-009 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: ETA 9130, Financial Status Report, UI Programs ? This report is used to report program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. A separate ETA 9130 is submitted for each of the following: UI, PEUC, and PUA Administration, DUA, TRA/RTAA, and UA Projects (administration and benefits). See TEGL No. 02-16 for specific and clarifying instructions about the ETA 9130. Per 9130 guidelines the report is submitted via an on-line reporting system. The report submission process is 3-steps (1) secondary contact enters in the data (2) primary contact is responsible for certifying the accuracy of the data by entering the PIN (3) DOl/ETA is responsible for reviewing the FSR, communicating with the grantee and accepting the report within 10 working days after certification. Quarterly reporting deadlines: May 15 (March end date), August 14 (June 30 end date), November 14 (September end date), February 14 (December 31 end date). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: ETA 9130 reports submitted by the Executive Office of Labor and Workforce Development (the Department) did not agree to supporting documentation. In addition, several reports were not submitted timely. Context: Reports for the 12/31/2021 and 6/30/2022 quarters were selected for testing, which resulted in testing eleven individual reports. The following exceptions were noted: ? For ten of eleven reports, current period and cumulative indirect expenditures were included in supporting documentation but were not included in the report. ? For three of eleven reports, the federal share of expenditures in the previous period and current period did not agree to supporting documentation. The cumulative federal share of expenditures did tie to supporting documentation. ? For one of eleven reports, the federal share of expenditures in the previous period, current period and cumulative did not agree to supporting documentation. In addition, the federal share of unliquidated obligations, total federal share of obligations and unliquidated balance of federal funds did not agree to supporting documentation. This resulted in an underreporting of the Federal share. ? Six of eleven reports were not submitted timely. The reports were submitted from one to four days late. Questioned costs: None noted, as the reporting errors did not result in an overclaim of the federal share of expenditures. Cause: The Department does not have sufficient internal controls in place over compliance of the ETA 9130 reporting process. Effect: ETA 9130 reports did not agree to supporting documentation and were submitted late. Recommendation: We recommend that policies and procedures be enhanced to ensure that financial reports are filed timely and accurately. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Special Tests and Provisions ? Match with IRS 940 FUTA Tax Form Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: States are required to annually certify for each taxpayer the total amount of contributions required to be paid under the state law for the calendar year and the amounts and dates of such payments in order for the taxpayer to be allowed the credit against the Federal Unemployment (FUTA) tax (26 CFR sections 31.3302(a)-3(a)). In order to accomplish this certification, states annually perform a match of employer tax payments with credit claimed for these payments on the employer?s IRS 940 FUTA tax form. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) did not complete the annual match of employer tax payments with IRS 940 FUTA tax forms on a timely basis. Context: The Department initiated the annual match process, but it was not completed until after auditors requested documentation that it had been performed. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it completed the annual FUTA tax certification process on a timely basis. Effect: Untimely annual FUTA tax certifications could result in unresolved errors in the payment of the FUTA tax and related credits taken by taxpayers. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that the annual match of employer tax payments with employers? IRS 940 FUTA tax forms is completed on a timely basis. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-009 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Special Tests and Provisions ? UI Benefit Payments Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The State Workforce Agency (SWA) is required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL?s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is exempted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied, and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of statistically sound random samples to the universe of all claims paid and denied in a state. Specifically, the SWA?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine if the administration of the UC program is consistent with state and federal law (20 CFR section 602.21(d)). As presented in the ET Handbook No. 395, the investigation involves a review of state agency records, as well as contacting the claimant, employers, and third parties (either in-person, by telephone, or by fax) to conduct new and original fact-finding related to all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to federal and state law as well as official policy. The following time limits are established for completion of all cases for the year. (The "year" includes all batches of weeks ending in the calendar year.): ? a minimum of 70 percent of cases must be completed within 60 days of the week ending date of the batch; ? 95 percent of cases must be completed within 90 days of the week ending date of the batch; ? a minimum of 98 percent of cases for the year must be completed within 120 days of the ending date of the calendar year. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) did not complete BAM case investigations within the time limits established in the ET Handbook No. 395. Context: Sixty cases were selected for testing. The Department did not meet the required time limits for closing cases within 90 or 120 days. Specifically, we noted the following exceptions: ? 90% of cases tested (54 of 60 cases) were closed within 90 days which is less than the required 95% ? 96.7% of cases tested (58 of 60 cases) were closed within 120 days which is less than the required 98% ? The remaining 3.3% of cases tested (2 of 60 cases) were closed from between 130 and 160 days. In addition, claims selected for testing by the Department must cover claims paid and denied claims. For 8 weeks selected for testing, only claims paid were selected for testing by the Department. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it met the required BAM investigation time limits for closing cases and to ensure all claim types were part of weekly testing. Effect: Noncompliance with BAM case investigation time limits could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that BAM case investigations are completed timely in accordance with the time limits established in the ET Handbook No. 395 and that both paid and denied claims are selected for testing. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-010 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? ETA 9130 Financial Report Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: ETA 9130, Financial Report ? All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. A separate ETA 9130 is submitted for each of these categories. Funds reserved and set aside for PFP contract strategies are required to be reported on ETA 9130 basic reports for each WIOA fund source utilized. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that ETA 9130 reports were completed and submitted in accordance with program requirements. Context: Reports for the 9/30/2021 and 6/30/2022 quarters were selected for testing. Separate reports are required to be submitted for each category and reporting level, resulting in a total of 75 samples selected for testing. The following exceptions were noted: ? 47 of 75 reports were not submitted timely. ? 4 of 75 reports were incomplete. ? 19 of 75 reports did not agree to supporting documentation. ? For 9 of 75 reports, documentation could not be provided that the reports had been reviewed by the Budget Supervisor and certified by the Director of Insurance. Cause: The Department?s procedures were not sufficient to ensure that ETA 9130 reports were completed in accordance with program requirements and that they were reviewed and approved prior to submission. Internal controls did not prevent or detect the errors. Effect: Reports were consistently submitted late and did not agree to supporting documentation. A lack of review and approval of reports could allow incorrect data to be reported for the program which could misrepresent the State?s financial performance in the program. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over financial reporting to ensure that ETA 9130 reports are completed and submitted in accordance with program requirements. We further recommend that internal controls are enhanced to ensure that reports are reviewed and approved prior to submission. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-011 Prior Year Finding: 2021-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Executive Office of Labor and Workforce Development (Department) did not report subaward information to FSRS. Context: Six subawards, including one subaward amendment, were selected for testing, totaling $10,422,414. None of the six subawards were reported to FSRS as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Allowable Costs/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR ? 200.430 (a), 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: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR ? 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, ? Be incorporated into the official records of the non-Federal entity, ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, ? Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, ? Comply with the established accounting policies and practices of the non-Federal entity, ? Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: One of sixty employee timesheets selected for testing did not use combination codes and the employee?s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee?s actual time and effort on the program. The program incurs direct payroll charges which represents approximately $5.8 million (17%) of total WIOA cluster spending. The Department implemented the use of combination codes within Self-Service Time and Attendance (SSTA), a module of the HR/CMS application in July 2019. Prior to this date, payroll was assigned to grants based on budgeted time and effort allocations maintained in the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). SSTA combination codes are used by employees to allocate and certify hours worked to Federal grants and employees? supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system will default to budgeted grant allocations entered into LCM. Cause: The Department?s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Payroll charges allocated to grants based on budgeted time and effort can result in federal reimbursements that are not reflective of actual time and effort working on a grant. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-013 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Monitoring - Per 2 CFR section 200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1)(xii) Assistance Listing number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at time of disbursement. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (Department) did not include all required information in a subaward agreement. Context: For one of six subawards selected for testing, the assistance listing number and federal award title was not included in the subaward agreement. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards included all required information. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that all required information is included in its subawards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-010 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? ETA 9130 Financial Report Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: ETA 9130, Financial Report ? All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. A separate ETA 9130 is submitted for each of these categories. Funds reserved and set aside for PFP contract strategies are required to be reported on ETA 9130 basic reports for each WIOA fund source utilized. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that ETA 9130 reports were completed and submitted in accordance with program requirements. Context: Reports for the 9/30/2021 and 6/30/2022 quarters were selected for testing. Separate reports are required to be submitted for each category and reporting level, resulting in a total of 75 samples selected for testing. The following exceptions were noted: ? 47 of 75 reports were not submitted timely. ? 4 of 75 reports were incomplete. ? 19 of 75 reports did not agree to supporting documentation. ? For 9 of 75 reports, documentation could not be provided that the reports had been reviewed by the Budget Supervisor and certified by the Director of Insurance. Cause: The Department?s procedures were not sufficient to ensure that ETA 9130 reports were completed in accordance with program requirements and that they were reviewed and approved prior to submission. Internal controls did not prevent or detect the errors. Effect: Reports were consistently submitted late and did not agree to supporting documentation. A lack of review and approval of reports could allow incorrect data to be reported for the program which could misrepresent the State?s financial performance in the program. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over financial reporting to ensure that ETA 9130 reports are completed and submitted in accordance with program requirements. We further recommend that internal controls are enhanced to ensure that reports are reviewed and approved prior to submission. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-011 Prior Year Finding: 2021-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Executive Office of Labor and Workforce Development (Department) did not report subaward information to FSRS. Context: Six subawards, including one subaward amendment, were selected for testing, totaling $10,422,414. None of the six subawards were reported to FSRS as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Allowable Costs/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR ? 200.430 (a), 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: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR ? 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, ? Be incorporated into the official records of the non-Federal entity, ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, ? Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, ? Comply with the established accounting policies and practices of the non-Federal entity, ? Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: One of sixty employee timesheets selected for testing did not use combination codes and the employee?s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee?s actual time and effort on the program. The program incurs direct payroll charges which represents approximately $5.8 million (17%) of total WIOA cluster spending. The Department implemented the use of combination codes within Self-Service Time and Attendance (SSTA), a module of the HR/CMS application in July 2019. Prior to this date, payroll was assigned to grants based on budgeted time and effort allocations maintained in the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). SSTA combination codes are used by employees to allocate and certify hours worked to Federal grants and employees? supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system will default to budgeted grant allocations entered into LCM. Cause: The Department?s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Payroll charges allocated to grants based on budgeted time and effort can result in federal reimbursements that are not reflective of actual time and effort working on a grant. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-013 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Monitoring - Per 2 CFR section 200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1)(xii) Assistance Listing number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at time of disbursement. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (Department) did not include all required information in a subaward agreement. Context: For one of six subawards selected for testing, the assistance listing number and federal award title was not included in the subaward agreement. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards included all required information. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that all required information is included in its subawards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-010 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? ETA 9130 Financial Report Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: ETA 9130, Financial Report ? All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. A separate ETA 9130 is submitted for each of these categories. Funds reserved and set aside for PFP contract strategies are required to be reported on ETA 9130 basic reports for each WIOA fund source utilized. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that ETA 9130 reports were completed and submitted in accordance with program requirements. Context: Reports for the 9/30/2021 and 6/30/2022 quarters were selected for testing. Separate reports are required to be submitted for each category and reporting level, resulting in a total of 75 samples selected for testing. The following exceptions were noted: ? 47 of 75 reports were not submitted timely. ? 4 of 75 reports were incomplete. ? 19 of 75 reports did not agree to supporting documentation. ? For 9 of 75 reports, documentation could not be provided that the reports had been reviewed by the Budget Supervisor and certified by the Director of Insurance. Cause: The Department?s procedures were not sufficient to ensure that ETA 9130 reports were completed in accordance with program requirements and that they were reviewed and approved prior to submission. Internal controls did not prevent or detect the errors. Effect: Reports were consistently submitted late and did not agree to supporting documentation. A lack of review and approval of reports could allow incorrect data to be reported for the program which could misrepresent the State?s financial performance in the program. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over financial reporting to ensure that ETA 9130 reports are completed and submitted in accordance with program requirements. We further recommend that internal controls are enhanced to ensure that reports are reviewed and approved prior to submission. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-011 Prior Year Finding: 2021-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Executive Office of Labor and Workforce Development (Department) did not report subaward information to FSRS. Context: Six subawards, including one subaward amendment, were selected for testing, totaling $10,422,414. None of the six subawards were reported to FSRS as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Allowable Costs/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR ? 200.430 (a), 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: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR ? 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, ? Be incorporated into the official records of the non-Federal entity, ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, ? Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, ? Comply with the established accounting policies and practices of the non-Federal entity, ? Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: One of sixty employee timesheets selected for testing did not use combination codes and the employee?s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee?s actual time and effort on the program. The program incurs direct payroll charges which represents approximately $5.8 million (17%) of total WIOA cluster spending. The Department implemented the use of combination codes within Self-Service Time and Attendance (SSTA), a module of the HR/CMS application in July 2019. Prior to this date, payroll was assigned to grants based on budgeted time and effort allocations maintained in the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). SSTA combination codes are used by employees to allocate and certify hours worked to Federal grants and employees? supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system will default to budgeted grant allocations entered into LCM. Cause: The Department?s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Payroll charges allocated to grants based on budgeted time and effort can result in federal reimbursements that are not reflective of actual time and effort working on a grant. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-013 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Monitoring - Per 2 CFR section 200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1)(xii) Assistance Listing number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at time of disbursement. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (Department) did not include all required information in a subaward agreement. Context: For one of six subawards selected for testing, the assistance listing number and federal award title was not included in the subaward agreement. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards included all required information. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that all required information is included in its subawards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-014 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Department of Transportation Federal Program: Highway Planning and Construction Cluster, COVID-19 ? Highway Planning and Construction Cluster Assistance Listing Number: 20.205, 20.219 Award Number and Year: (2021-2022) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Transportation (Department) could not provide support that it ensured its subrecipients were not suspended or debarred before issuing subawards to the entities. Context: The suspension and debarment status for 32 of 40 subrecipients selected for testing was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Department did not establish effective internal controls for maintaining sufficient evidence that a suspension and debarment check was completed before issuing subawards. Effect: If the suspension and debarment status of subrecipients is not verified when entering into covered transactions, it is possible that a subaward could be issued to an ineligible entity. Recommendation: We recommend the Department implement controls and procedures to ensure it maintains documentation of suspension and debarments checks and that the documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-014 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Department of Transportation Federal Program: Highway Planning and Construction Cluster, COVID-19 ? Highway Planning and Construction Cluster Assistance Listing Number: 20.205, 20.219 Award Number and Year: (2021-2022) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Transportation (Department) could not provide support that it ensured its subrecipients were not suspended or debarred before issuing subawards to the entities. Context: The suspension and debarment status for 32 of 40 subrecipients selected for testing was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Department did not establish effective internal controls for maintaining sufficient evidence that a suspension and debarment check was completed before issuing subawards. Effect: If the suspension and debarment status of subrecipients is not verified when entering into covered transactions, it is possible that a subaward could be issued to an ineligible entity. Recommendation: We recommend the Department implement controls and procedures to ensure it maintains documentation of suspension and debarments checks and that the documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-014 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Department of Transportation Federal Program: Highway Planning and Construction Cluster, COVID-19 ? Highway Planning and Construction Cluster Assistance Listing Number: 20.205, 20.219 Award Number and Year: (2021-2022) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Transportation (Department) could not provide support that it ensured its subrecipients were not suspended or debarred before issuing subawards to the entities. Context: The suspension and debarment status for 32 of 40 subrecipients selected for testing was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Department did not establish effective internal controls for maintaining sufficient evidence that a suspension and debarment check was completed before issuing subawards. Effect: If the suspension and debarment status of subrecipients is not verified when entering into covered transactions, it is possible that a subaward could be issued to an ineligible entity. Recommendation: We recommend the Department implement controls and procedures to ensure it maintains documentation of suspension and debarments checks and that the documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-015 Prior Year Finding: 2021-018 Federal Agency: U.S. Department of the Treasury State Agency: Executive Officeof Housing and Livable Communities Federal Program: COVID-19 ? Emergency Rental Assistance Assistance Listing Number: 21.023 Award Number and Year: ERA-1 (12/27/2020 ? 9/30/2022), ERA-2 (5/1/2021 ? 9/30/2025) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Emergency Rental Assistance (ERA) 1 and ERA 2 state, local, and territorial recipients were required to submit monthly and quarterly reports to the United States Department of the Treasury (U.S. Treasury). Monthly reports are brief two-question updates through which ERA recipients provide U.S. Treasury with very high-level counts of the numbers of households receiving assistance and the amounts of ERA funds distributed. Monthly reports are due 15 days after the end of each month, with the exception of the December 2021 monthly report which was due January 18, 2022. Quarterly reports are in-depth reports with data on an array of programmatic and financial information to provide transparency in the use and progress of ERA funds. Monthly reports were required for each month of Fiscal Year 2022 and were due 15 days after the end of the month. Quarterly reports were required for each quarter of Fiscal Year 2022 and were due October 29, 2021, February 1, 2022, April 15, 2022, and July 15, 2022. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Monthly reports for the period ending December 31, 2021 were not submitted timely by the Executive Office of Housing and Livable Communities (the Department). Context: We selected a sample of eight monthly reports (four each for ERA-1 and ERA-2) and four quarterly reports (two each for ERA-1 and ERA-2). We noted that the 12/31/2021 monthly reports for both ERA-1 and ERA-2 were due by 1/15/2022, but they were submitted on 3/18/2022, or 62 days late. Cause: The Department?s procedures and internal controls were not sufficient to ensure that monthly reports were submitted timely. Effect: The Department was not in compliance with monthly reporting requirements. Questioned costs: None. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that monthly reports are submitted timely. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: ESSER grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. The CARES Act requires ESSER grantees to submit quarterly reports. This reporting requirement is satisfied through grantees? submission of the required monthly FFATA data through FSRS.gov. This monthly subaward data reported by States, along with data on awards to States, are pulled into the ESF Transparency Portal. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Year 2 Annual Report submitted by the Department of Elementary and Secondary Education (Department) for ESSER I did not agree to supporting documentation. Further, subaward information used for quarterly reports was not submitted to FSRS timely. Context: The Year 2 annual report submitted by the Department for ESSER I did not agree to supporting documentation. A variance of $37,604 was noted in the total amount expended on subrecipients in the prior year and the total amount of reserve expended directly in the prior reporting period. Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS, therefore, monthly FFATA data used to satisfy the quarterly reporting requirements was untimely. The subawards were reported to FSRS from one or four months later than required by FFATA reporting requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that the amounts reported for ESSER I agreed to supporting documentation nor that monthly subaward data used to satisfy quarterly reporting requirements was reported timely to FSRS. Effect: The total amount of prior year and current year subrecipient expenditures reported on the Year 2 Annual Report for ESSER I did not agree to supporting documentation. Monthly FFATA data used to satisfy quarterly reporting requirements was not submitted timely. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that amounts reported on the Annual Report agree to supporting documentation. We further recommend that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in order to satisfy quarterly reporting requirements for the program. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-017 Prior Year Finding: 2021-019 Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS. The subawards were reported from one or four months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS no later than the end of the month following the month of issuance. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: ESSER grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. The CARES Act requires ESSER grantees to submit quarterly reports. This reporting requirement is satisfied through grantees? submission of the required monthly FFATA data through FSRS.gov. This monthly subaward data reported by States, along with data on awards to States, are pulled into the ESF Transparency Portal. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Year 2 Annual Report submitted by the Department of Elementary and Secondary Education (Department) for ESSER I did not agree to supporting documentation. Further, subaward information used for quarterly reports was not submitted to FSRS timely. Context: The Year 2 annual report submitted by the Department for ESSER I did not agree to supporting documentation. A variance of $37,604 was noted in the total amount expended on subrecipients in the prior year and the total amount of reserve expended directly in the prior reporting period. Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS, therefore, monthly FFATA data used to satisfy the quarterly reporting requirements was untimely. The subawards were reported to FSRS from one or four months later than required by FFATA reporting requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that the amounts reported for ESSER I agreed to supporting documentation nor that monthly subaward data used to satisfy quarterly reporting requirements was reported timely to FSRS. Effect: The total amount of prior year and current year subrecipient expenditures reported on the Year 2 Annual Report for ESSER I did not agree to supporting documentation. Monthly FFATA data used to satisfy quarterly reporting requirements was not submitted timely. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that amounts reported on the Annual Report agree to supporting documentation. We further recommend that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in order to satisfy quarterly reporting requirements for the program. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-017 Prior Year Finding: 2021-019 Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS. The subawards were reported from one or four months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS no later than the end of the month following the month of issuance. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-018 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Subaward information was not reported to FSRS during FY 2022. Context: None of the thirteen subrecipients selected for testing were reported to FSRS by the Executive Office of Housing and Livable Communities (the Department) during FY 2022. Total subawards selected were $90,808,866, and $0 was reported as required by FFATA requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Performance and Special Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: LIHEAP Performance Data Form (OMB No 0970-0449) ? For the year ending September 30, 2021, state grantees must submit this report by March 31, 2022. The first section of the report is the Grantee Survey that covers sources and allocation of funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service. LIHEAP Carryover and Reallotment Report (OMB No. 0970-0106) ? Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported. Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) ? As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Indian tribes are required to report only on the number of households served for each program component. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Housing and Livable Communities (the Department) did not submit performance and special reports timely. In addition, the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Context: Exceptions were noted for 2 of 3 reports selected for testing. We selected for testing the LIHEAP Performance Data Form, the LIHEAP Carryover and Reallotment Report, and the Annual Report on Households Assisted by LIHEAP that were due during FY2022. Specifically, we noted the following exceptions: ? The LIHEAP Performance Data Forms was not submitted timely. The report for the period ending 9/30/2021 was due by 3/31/2022 but was not submitted until 4/12/2022, or 12 days late. ? Several line items on the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Questioned costs: None noted. Cause: The Department?s procedures were not sufficient to ensure that performance and special reports were submitted timely nor that information reported on the Annual Report on Households Assisted by LIHEAP was accurate and agreed with supporting documentation. Internal controls did not prevent or detect the errors. Effect: Delays and inaccuracies in submission of annual performance and special reports could impact the Federal agency?s ability to manage the program, could result in delays in annual awards, and possible penalties or sanctions could be imposed by the grantor. Recommendation: We recommend that the Department review and enhance its procedures and internal controls to ensure that performance and special reports are submitted timely and that the information reported agrees to supporting documentation. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-018 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Subaward information was not reported to FSRS during FY 2022. Context: None of the thirteen subrecipients selected for testing were reported to FSRS by the Executive Office of Housing and Livable Communities (the Department) during FY 2022. Total subawards selected were $90,808,866, and $0 was reported as required by FFATA requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Performance and Special Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: LIHEAP Performance Data Form (OMB No 0970-0449) ? For the year ending September 30, 2021, state grantees must submit this report by March 31, 2022. The first section of the report is the Grantee Survey that covers sources and allocation of funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service. LIHEAP Carryover and Reallotment Report (OMB No. 0970-0106) ? Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported. Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) ? As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Indian tribes are required to report only on the number of households served for each program component. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Housing and Livable Communities (the Department) did not submit performance and special reports timely. In addition, the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Context: Exceptions were noted for 2 of 3 reports selected for testing. We selected for testing the LIHEAP Performance Data Form, the LIHEAP Carryover and Reallotment Report, and the Annual Report on Households Assisted by LIHEAP that were due during FY2022. Specifically, we noted the following exceptions: ? The LIHEAP Performance Data Forms was not submitted timely. The report for the period ending 9/30/2021 was due by 3/31/2022 but was not submitted until 4/12/2022, or 12 days late. ? Several line items on the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Questioned costs: None noted. Cause: The Department?s procedures were not sufficient to ensure that performance and special reports were submitted timely nor that information reported on the Annual Report on Households Assisted by LIHEAP was accurate and agreed with supporting documentation. Internal controls did not prevent or detect the errors. Effect: Delays and inaccuracies in submission of annual performance and special reports could impact the Federal agency?s ability to manage the program, could result in delays in annual awards, and possible penalties or sanctions could be imposed by the grantor. Recommendation: We recommend that the Department review and enhance its procedures and internal controls to ensure that performance and special reports are submitted timely and that the information reported agrees to supporting documentation. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.