Audit 317237

Finding 2023-002 – Material Weakness Program: Federal Highway Works Administration - Highway Planning and Construction Cluster CFDA No.: 20.205 Federal Agency: U.S. Department of Transportation Award Year: 2022/23 Compliance Requirement: Reporting Questioned Costs: N/A Criteria: Per Uniform Guidance Subpart F section 200.512 the audit must be completed, and data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s reports, or nine months after the end of the audit period. Condition: Management was not able to provide the necessary information needed to complete the audit by the required date. Cause: Management and accounting staff turnover leading to delays in the start and completion of the audit. Effect: Noncompliance may result in withholding of payments, denying both the use of funds and matching credit for all or part of the cost of the activity or action not in compliance, whole or partial suspension or termination of the Assistance Agreements, recovery of funds paid under the Assistance Agreements, withholding of future awards, or other legal remedies in accordance with 2 CFR §200.338. Recommendation: The Council should further enhance their accounting process to ensure that all accounting records are properly reflected in the financial statements prior to the commencement of the audit. In addition, we recommend that the Council work on additional cross training within the finance team to ensure that there are adequate staff with the ability to complete the financial close and financial statement preparation process. Management’s Response and Corrective Action Plan: Finding 2023-002 – Material Weakness Program: Federal Highway Works Administration - Highway Planning and Construction Cluster The delays in the commencement and completion of the audit, as well as the material misstatements and excessive year-end closing journal entries, were primarily due to significant turnover in our finance department during the fiscal year and the financial closing process. Effect of Condition: We acknowledge that these issues led to material adjustments identified through the audit procedures, which significantly delayed the audit process

Finding 2023-002 – Material Weakness Program: Federal Highway Works Administration - Highway Planning and Construction Cluster CFDA No.: 20.205 Federal Agency: U.S. Department of Transportation Award Year: 2022/23 Compliance Requirement: Reporting Questioned Costs: N/A Criteria: Per Uniform Guidance Subpart F section 200.512 the audit must be completed, and data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s reports, or nine months after the end of the audit period. Condition: Management was not able to provide the necessary information needed to complete the audit by the required date. Cause: Management and accounting staff turnover leading to delays in the start and completion of the audit. Effect: Noncompliance may result in withholding of payments, denying both the use of funds and matching credit for all or part of the cost of the activity or action not in compliance, whole or partial suspension or termination of the Assistance Agreements, recovery of funds paid under the Assistance Agreements, withholding of future awards, or other legal remedies in accordance with 2 CFR §200.338. Recommendation: The Council should further enhance their accounting process to ensure that all accounting records are properly reflected in the financial statements prior to the commencement of the audit. In addition, we recommend that the Council work on additional cross training within the finance team to ensure that there are adequate staff with the ability to complete the financial close and financial statement preparation process. Management’s Response and Corrective Action Plan: Finding 2023-002 – Material Weakness Program: Federal Highway Works Administration - Highway Planning and Construction Cluster The delays in the commencement and completion of the audit, as well as the material misstatements and excessive year-end closing journal entries, were primarily due to significant turnover in our finance department during the fiscal year and the financial closing process. Effect of Condition: We acknowledge that these issues led to material adjustments identified through the audit procedures, which significantly delayed the audit process