Audit 322720

Assistance Listing Number and Program: 21.027 COVID-19 State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Pass-Through Entity and Award Number: Wisconsin Public Service Commission / 5-BF-2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which requires an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations and the terms and conditions of the federal award. Recipients of COVID-19 State and Local Fiscal Recovery Fund payments from the Wisconsin Public Service Commission (PSC) must also comply with the reporting requirements described in the terms and conditions of the PSC agreement. Condition: The Reedsburg Utility Commission did not have a process to review and approve the quarterly progress reports prior to submission to the PSC by someone other than the preparer. Additionally, estimates were used to report costs incurred in those quarterly reports. We tested four quarterly reports submitted for the Iowa County and Witwen projects. Our sample was not statistically valid. Cause: The Reedsburg Utility Commission did not have a control process in place to ensure that the reports were being reviewed by someone other than the preparer prior to submission to the PSC and that actual costs were used in the reports. Effect: Reports could contain errors due to estimation and lack of review. Questioned Costs: None reported. Recommendation: The Utility Commission should review its internal control procedures to ensure there are proper review and approval processes over completeness and accuracy of reports in place before submissions to state agencies are completed. Actual amounts supported by the financial software should be used in those reports. Management's Response: The Utility Commission General Manager or Communications System Supervisor will review the quarterly progress reports prepared by someone else. Section II of the Project Status Report instructions states “Answer each question to the best of your ability.” The work orders do not include all costs related to labor benefits and taxes, and also the electronics and customer premise equipment associated with the projects. These costs are calculated and added in when the project is completed and is being closed out. Estimating these items for the quarterly Project Status Report is providing the project costs spent through the respective quarter to the best of our ability due to the limitations of the work order reporting process.

Assistance Listing Number and Program: 21.027 COVID-19 State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Pass-Through Entity and Award Number: Wisconsin Public Service Commission / 5-BF-2022 Criteria: Per 2 CFR Part 180, when a nonfederal entity enters into a procurement transaction with another entity for goods or services that equals or exceeds $25,000, also known as a covered transaction, the nonfederal entity must verify that the entity is not suspended or debarred. A nonfederal entity has three options for performing this verification: 1) obtaining a certification from the entity; 2) checking the System for Award Management (SAM) Exclusions or 3) adding certification language to the contract or subaward with the entity. Additionally, per the agreement with the Wisconsin Public Service Commission, the nonfederal entity should, to the greatest extent practicable under the award, ensure the purchase or use of materials that are produced in the United States. Condition: The Reedsburg Utility Commission (RUC) was not able to provide evidence that the suspension and debarment verification was completed or preference for the purchase of domestic materials for the two vendors selected for testing. The sample was not statistically valid. Cause: The utility commission did not retain documentation that showed the search on SAM.gov and the preference of domestic material purchases was completed Effect: Payments could be made to an entity that is on the suspended or debarred list or for materials that were not domestically sourced. Questioned Costs: None reported. Recommendation: The utility commission should review its internal control procedures to ensure there are proper processes in place for verifying applicable procurement transactions are not entered into with a suspended or debarred entity, and verifying that material purchase agreements are with domestic vendors, and retain documentation showing verification for these were done. Management's Response: When purchasing inventory materials that may be used in the ARPA projects, RUC purchasing staff will request certification from the vendor that they are not suspended or debarred from federally funded projects and also request material country of origin documentation or Build America, Buy America (BABA) qualifications when receiving quotes.

Assistance Listing Number and Program: 21.027 COVID-19 State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Pass-Through Entity and Award Number: Wisconsin Public Service Commission / 5-BF-2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which requires an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations and the terms and conditions of the federal award. Recipients of COVID-19 State and Local Fiscal Recovery Fund payments from the Wisconsin Public Service Commission (PSC) must also comply with the reporting requirements described in the terms and conditions of the PSC agreement. Condition: The Reedsburg Utility Commission did not have a process to review and approve the quarterly progress reports prior to submission to the PSC by someone other than the preparer. Additionally, estimates were used to report costs incurred in those quarterly reports. We tested four quarterly reports submitted for the Iowa County and Witwen projects. Our sample was not statistically valid. Cause: The Reedsburg Utility Commission did not have a control process in place to ensure that the reports were being reviewed by someone other than the preparer prior to submission to the PSC and that actual costs were used in the reports. Effect: Reports could contain errors due to estimation and lack of review. Questioned Costs: None reported. Recommendation: The Utility Commission should review its internal control procedures to ensure there are proper review and approval processes over completeness and accuracy of reports in place before submissions to state agencies are completed. Actual amounts supported by the financial software should be used in those reports. Management's Response: The Utility Commission General Manager or Communications System Supervisor will review the quarterly progress reports prepared by someone else. Section II of the Project Status Report instructions states “Answer each question to the best of your ability.” The work orders do not include all costs related to labor benefits and taxes, and also the electronics and customer premise equipment associated with the projects. These costs are calculated and added in when the project is completed and is being closed out. Estimating these items for the quarterly Project Status Report is providing the project costs spent through the respective quarter to the best of our ability due to the limitations of the work order reporting process.

Assistance Listing Number and Program: 21.027 COVID-19 State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Pass-Through Entity and Award Number: Wisconsin Public Service Commission / 5-BF-2022 Criteria: Per 2 CFR Part 180, when a nonfederal entity enters into a procurement transaction with another entity for goods or services that equals or exceeds $25,000, also known as a covered transaction, the nonfederal entity must verify that the entity is not suspended or debarred. A nonfederal entity has three options for performing this verification: 1) obtaining a certification from the entity; 2) checking the System for Award Management (SAM) Exclusions or 3) adding certification language to the contract or subaward with the entity. Additionally, per the agreement with the Wisconsin Public Service Commission, the nonfederal entity should, to the greatest extent practicable under the award, ensure the purchase or use of materials that are produced in the United States. Condition: The Reedsburg Utility Commission (RUC) was not able to provide evidence that the suspension and debarment verification was completed or preference for the purchase of domestic materials for the two vendors selected for testing. The sample was not statistically valid. Cause: The utility commission did not retain documentation that showed the search on SAM.gov and the preference of domestic material purchases was completed Effect: Payments could be made to an entity that is on the suspended or debarred list or for materials that were not domestically sourced. Questioned Costs: None reported. Recommendation: The utility commission should review its internal control procedures to ensure there are proper processes in place for verifying applicable procurement transactions are not entered into with a suspended or debarred entity, and verifying that material purchase agreements are with domestic vendors, and retain documentation showing verification for these were done. Management's Response: When purchasing inventory materials that may be used in the ARPA projects, RUC purchasing staff will request certification from the vendor that they are not suspended or debarred from federally funded projects and also request material country of origin documentation or Build America, Buy America (BABA) qualifications when receiving quotes.