2022-003 Internal Control over Compliance and Compliance with Subrecipient Monitoring Information on the Major Federal Program ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: State of Illinois, Department of Commerce and Economic Opportunity Program Title - Small Business Community Navigators Program Pass-through Entity Identifying Number - 21-483011 Sub-award Period - July 1, 2021 to June 30, 2022 Criteria - In accordance with ?200.331(b) and ?200.331(d), Requirements for Pass-Through Entities, the Trust (including consolidated entity National Main Street Center (NMSC), the recipient of these federal funds) must evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. The Trust must also monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statues, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity; (2) following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and (3) issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity. Condition - During our testing of subrecipient monitoring, we selected five subrecipient samples. We identified the following conditions: ? For each sample tested, NMSC was unable to provide documented evidence for the evaluation of each subrecipient?s risk assessment. ? For each sample tested, there was no timely evidence that NMSC verified the subrecipients? audit requirements. Subsequently, management verified that one of the five subrecipients tested was subject to a single audit and as such, risk assessment and monitoring activities around the federal award recipient were not performed by NMSC in accordance with ?200.331(b) and ?200.331(d). We verified that the Trust performed monitoring on the subrecipients under the federal grant by reviewing video conference call records between the Trust and the subrecipients throughout the grant period; further, we verified that the Trust submitted monitoring reports on a monthly basis to the State of Illinois detailing how monitoring occurred, which included speaking to each subrecipient at least weekly and through group video conference calls every other week. We also noted that the Trust submitted subrecipient invoices to the State of Illinois as part of the monthly reporting package. Cause ? The Trust did not follow its policies and procedures in place to ensure compliance with the requirements regarding subrecipient monitoring. Effect or Potential Effect - Failure to comply with the subrecipient monitoring requirements of the Uniform Guidance could result in unallowable expenses being charged to the grants by the subrecipients. Questioned Costs - None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements. The sample was selected based on a non-statistical basis. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding. Recommendation ? We recommend that the Trust follow its policies and procedures to ensure the subrecipient process, from identification of that subrecipient through verification of subrecipients? audit requirements, occurs to ensure compliance. To address the many compliance requirements when dealing with subrecipients, most organizations have developed pre-award assessment toolkits, audit requirement monitoring toolkits and other types of subrecipient management aids to assist in ensuring the steps are performed as required. Views of Responsible Officials - In June 2022, the Trust hired a Grants & Compliance Specialist to implement subrecipient monitoring procedures for NMSC, the entity responsible for this federal program. All National Trust and NMSC pass-through programs in effect during fiscal year 2023 are subject to these procedures.
2022-004 Internal Control over Compliance and Compliance with Procurement, Suspension and Debarment Information on the Major Federal Program ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: Westchester County Program Title - Business First American Rescue Plan Act Grant Program Pass-through Entity Identifying Number - N/A Sub-award Period March 3, 2021 to August 31, 2022 Criteria ? In accordance with ?200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, ?200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. All procurement transactions must be conducted in a manner providing full and open competition consistent in accordance with ?200.319 and must be performed using the appropriate procurement method as outlined in ?200.320. In accordance with ?200.213 and ?180.300, Suspension and Debarment, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity, or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a nonfederal entity. In addition, in accordance with ?180.415(b), non-federal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person, or under which an excluded person is a principal, unless the non-federal entity obtains an exception under ?180.135. Condition ? During our testing of procurement, suspension and debarment we selected one sample. We noted the following conditions: ? For the sample tested, the Trust was unable to provide evidence that the Trust complied with the procurement process in accordance with ?200.318(a), General Procurement Standards. ? For the sample tested, the Trust was unable to provide evidence that it performed procedures to verify the vendor was not suspended or debarred in accordance with ?200.213 and ?180.300, Suspension and Debarment. The Trust subsequently performed procedures to verify that the vendor was not suspended or debarred. Cause ? The Trust has a written procurement policy; however, the Trust did not follow its internal control process to ensure compliance with the Procurement, Suspension and Debarment compliance requirement. Effect or Potential Effect ? The failure to adhere to its internal control system of the procurement process could result in funds being spent by inappropriate individuals. Questioned Costs ? None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements required based on CFR ?200.318(a). The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding. Recommendation ? We recommend that the Trust ensures compliance and adherence to policies and procedures to ensure compliance with Procurement, Suspension and Debarment. Views of Responsible Officials - The Trust has a Procurement SOP that is fully responsive to CFR ?200.318, and the sampled expense complied with that policy when procured in April 2022. Federal funds were awarded in July 2022 permitting reimbursement of costs incurred as early as March 2021. At the direction of pass-through entity Westchester County, these one-time coronavirus relief funds were applied to reimburse the Trust for expenses selected by that entity even though the vendors were contracted prior to the award of relief funds. This retroactive application of coronavirus relief funds as stipulated by Westchester County is unlikely to recur. Nonetheless, the Trust will modify the Procurement SOP to clarify that multiple contracts with a single vendor must be treated as a single contract for purposes of the small purchase threshold and will ensure that all expenses are subject to the more stringent requirements under CFR ?200.318. Additionally, the Trust will modify the procurement procedures to ensure that suspension and debarment screening occurs prior to entering into contracts.
2022-002 Internal Control over Compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles ? Payroll Activities Information on the Major Federal Programs ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: State of Illinois, Department of Commerce and Economic Opportunity Program Title - Small Business Community Navigators Program Pass-through Entity Identifying Number - 21-483011 Sub-award Period - July 1, 2021 to June 30, 2022 National Endowment for the Humanities (NEH) Assistance Listing Number: 45.164 Assistance Listing Name: Promotion of the Humanities Public Programs Program Title - Telling the Full Story: Sustaining the Stewards of America?s Diverse Historic Places Award Number - ZOR-283411-21 Award Period - October 1, 2021 to September 30, 2023 Program Title - For the People by the People: Transforming National Trust Historic Sites through the Humanities Award Number - ZPP-283412-22 Award Period - October 1, 2021 to March 31, 2023 Criteria ? The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?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 establish 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 and/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.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) 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. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? During the audit, we noted that the Trust has a system of internal control by which every pay period, timesheets are submitted by each employee and approved by a supervisor. However, given the system limitations from the time-entry system, employees can only charge hours to their home department, and those employees who do not work solely on the federal program are not able to charge hours directly to the federal award through the system. Given the system limitations, program managers gathered documentation to evidence the hours and associated costs which should be charged to the federal award and recorded the corresponding personnel costs to the federal award through a journal entry; however, there was no direct evidence of review and approval of these personnel costs charged to the federal awards, other than an approval of the journal entry. While there was a lack of direct approval of hours charged to the federal program by program managers, we validated that the employees who charged time to the federal awards as part of our sample selection were included in the budgets for the federal programs. Cause ? The Trust?s system of internal control did not have procedures in place for program managers to approve the hours charged to the federal awards. Effect or Potential Effect ? Without direct approvals that the personnel costs charged are accurate, the Trust is not able to demonstrate that key elements in a system of internal control over recording of time exists. Questioned Costs ? None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding.Recommendation ? We recommend that the Trust strengthen its current policies and procedures to ensure that payroll costs charged to federal awards are supported by a system of internal controls that allows for timely employee preparation and certification and supervisory approval of time charged to the federal awards. Views of Responsible Officials - The Trust will implement procedures in fiscal year 2023 requiring supervisors to review and approve time charged to federal awards in addition to the reviews performed by finance staff as part of ongoing monitoring of federal awards, including approval of time incurred during the fiscal year prior to implementation of new procedures.
2022-002 Internal Control over Compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles ? Payroll Activities Information on the Major Federal Programs ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: State of Illinois, Department of Commerce and Economic Opportunity Program Title - Small Business Community Navigators Program Pass-through Entity Identifying Number - 21-483011 Sub-award Period - July 1, 2021 to June 30, 2022 National Endowment for the Humanities (NEH) Assistance Listing Number: 45.164 Assistance Listing Name: Promotion of the Humanities Public Programs Program Title - Telling the Full Story: Sustaining the Stewards of America?s Diverse Historic Places Award Number - ZOR-283411-21 Award Period - October 1, 2021 to September 30, 2023 Program Title - For the People by the People: Transforming National Trust Historic Sites through the Humanities Award Number - ZPP-283412-22 Award Period - October 1, 2021 to March 31, 2023 Criteria ? The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?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 establish 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 and/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.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) 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. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? During the audit, we noted that the Trust has a system of internal control by which every pay period, timesheets are submitted by each employee and approved by a supervisor. However, given the system limitations from the time-entry system, employees can only charge hours to their home department, and those employees who do not work solely on the federal program are not able to charge hours directly to the federal award through the system. Given the system limitations, program managers gathered documentation to evidence the hours and associated costs which should be charged to the federal award and recorded the corresponding personnel costs to the federal award through a journal entry; however, there was no direct evidence of review and approval of these personnel costs charged to the federal awards, other than an approval of the journal entry. While there was a lack of direct approval of hours charged to the federal program by program managers, we validated that the employees who charged time to the federal awards as part of our sample selection were included in the budgets for the federal programs. Cause ? The Trust?s system of internal control did not have procedures in place for program managers to approve the hours charged to the federal awards. Effect or Potential Effect ? Without direct approvals that the personnel costs charged are accurate, the Trust is not able to demonstrate that key elements in a system of internal control over recording of time exists. Questioned Costs ? None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding.Recommendation ? We recommend that the Trust strengthen its current policies and procedures to ensure that payroll costs charged to federal awards are supported by a system of internal controls that allows for timely employee preparation and certification and supervisory approval of time charged to the federal awards. Views of Responsible Officials - The Trust will implement procedures in fiscal year 2023 requiring supervisors to review and approve time charged to federal awards in addition to the reviews performed by finance staff as part of ongoing monitoring of federal awards, including approval of time incurred during the fiscal year prior to implementation of new procedures.
2022-002 Internal Control over Compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles ? Payroll Activities Information on the Major Federal Programs ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: State of Illinois, Department of Commerce and Economic Opportunity Program Title - Small Business Community Navigators Program Pass-through Entity Identifying Number - 21-483011 Sub-award Period - July 1, 2021 to June 30, 2022 National Endowment for the Humanities (NEH) Assistance Listing Number: 45.164 Assistance Listing Name: Promotion of the Humanities Public Programs Program Title - Telling the Full Story: Sustaining the Stewards of America?s Diverse Historic Places Award Number - ZOR-283411-21 Award Period - October 1, 2021 to September 30, 2023 Program Title - For the People by the People: Transforming National Trust Historic Sites through the Humanities Award Number - ZPP-283412-22 Award Period - October 1, 2021 to March 31, 2023 Criteria ? The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?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 establish 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 and/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.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) 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. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? During the audit, we noted that the Trust has a system of internal control by which every pay period, timesheets are submitted by each employee and approved by a supervisor. However, given the system limitations from the time-entry system, employees can only charge hours to their home department, and those employees who do not work solely on the federal program are not able to charge hours directly to the federal award through the system. Given the system limitations, program managers gathered documentation to evidence the hours and associated costs which should be charged to the federal award and recorded the corresponding personnel costs to the federal award through a journal entry; however, there was no direct evidence of review and approval of these personnel costs charged to the federal awards, other than an approval of the journal entry. While there was a lack of direct approval of hours charged to the federal program by program managers, we validated that the employees who charged time to the federal awards as part of our sample selection were included in the budgets for the federal programs. Cause ? The Trust?s system of internal control did not have procedures in place for program managers to approve the hours charged to the federal awards. Effect or Potential Effect ? Without direct approvals that the personnel costs charged are accurate, the Trust is not able to demonstrate that key elements in a system of internal control over recording of time exists. Questioned Costs ? None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding.Recommendation ? We recommend that the Trust strengthen its current policies and procedures to ensure that payroll costs charged to federal awards are supported by a system of internal controls that allows for timely employee preparation and certification and supervisory approval of time charged to the federal awards. Views of Responsible Officials - The Trust will implement procedures in fiscal year 2023 requiring supervisors to review and approve time charged to federal awards in addition to the reviews performed by finance staff as part of ongoing monitoring of federal awards, including approval of time incurred during the fiscal year prior to implementation of new procedures.
2022-003 Internal Control over Compliance and Compliance with Subrecipient Monitoring Information on the Major Federal Program ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: State of Illinois, Department of Commerce and Economic Opportunity Program Title - Small Business Community Navigators Program Pass-through Entity Identifying Number - 21-483011 Sub-award Period - July 1, 2021 to June 30, 2022 Criteria - In accordance with ?200.331(b) and ?200.331(d), Requirements for Pass-Through Entities, the Trust (including consolidated entity National Main Street Center (NMSC), the recipient of these federal funds) must evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. The Trust must also monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statues, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity; (2) following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and (3) issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity. Condition - During our testing of subrecipient monitoring, we selected five subrecipient samples. We identified the following conditions: ? For each sample tested, NMSC was unable to provide documented evidence for the evaluation of each subrecipient?s risk assessment. ? For each sample tested, there was no timely evidence that NMSC verified the subrecipients? audit requirements. Subsequently, management verified that one of the five subrecipients tested was subject to a single audit and as such, risk assessment and monitoring activities around the federal award recipient were not performed by NMSC in accordance with ?200.331(b) and ?200.331(d). We verified that the Trust performed monitoring on the subrecipients under the federal grant by reviewing video conference call records between the Trust and the subrecipients throughout the grant period; further, we verified that the Trust submitted monitoring reports on a monthly basis to the State of Illinois detailing how monitoring occurred, which included speaking to each subrecipient at least weekly and through group video conference calls every other week. We also noted that the Trust submitted subrecipient invoices to the State of Illinois as part of the monthly reporting package. Cause ? The Trust did not follow its policies and procedures in place to ensure compliance with the requirements regarding subrecipient monitoring. Effect or Potential Effect - Failure to comply with the subrecipient monitoring requirements of the Uniform Guidance could result in unallowable expenses being charged to the grants by the subrecipients. Questioned Costs - None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements. The sample was selected based on a non-statistical basis. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding. Recommendation ? We recommend that the Trust follow its policies and procedures to ensure the subrecipient process, from identification of that subrecipient through verification of subrecipients? audit requirements, occurs to ensure compliance. To address the many compliance requirements when dealing with subrecipients, most organizations have developed pre-award assessment toolkits, audit requirement monitoring toolkits and other types of subrecipient management aids to assist in ensuring the steps are performed as required. Views of Responsible Officials - In June 2022, the Trust hired a Grants & Compliance Specialist to implement subrecipient monitoring procedures for NMSC, the entity responsible for this federal program. All National Trust and NMSC pass-through programs in effect during fiscal year 2023 are subject to these procedures.
2022-004 Internal Control over Compliance and Compliance with Procurement, Suspension and Debarment Information on the Major Federal Program ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: Westchester County Program Title - Business First American Rescue Plan Act Grant Program Pass-through Entity Identifying Number - N/A Sub-award Period March 3, 2021 to August 31, 2022 Criteria ? In accordance with ?200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, ?200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. All procurement transactions must be conducted in a manner providing full and open competition consistent in accordance with ?200.319 and must be performed using the appropriate procurement method as outlined in ?200.320. In accordance with ?200.213 and ?180.300, Suspension and Debarment, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity, or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a nonfederal entity. In addition, in accordance with ?180.415(b), non-federal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person, or under which an excluded person is a principal, unless the non-federal entity obtains an exception under ?180.135. Condition ? During our testing of procurement, suspension and debarment we selected one sample. We noted the following conditions: ? For the sample tested, the Trust was unable to provide evidence that the Trust complied with the procurement process in accordance with ?200.318(a), General Procurement Standards. ? For the sample tested, the Trust was unable to provide evidence that it performed procedures to verify the vendor was not suspended or debarred in accordance with ?200.213 and ?180.300, Suspension and Debarment. The Trust subsequently performed procedures to verify that the vendor was not suspended or debarred. Cause ? The Trust has a written procurement policy; however, the Trust did not follow its internal control process to ensure compliance with the Procurement, Suspension and Debarment compliance requirement. Effect or Potential Effect ? The failure to adhere to its internal control system of the procurement process could result in funds being spent by inappropriate individuals. Questioned Costs ? None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements required based on CFR ?200.318(a). The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding. Recommendation ? We recommend that the Trust ensures compliance and adherence to policies and procedures to ensure compliance with Procurement, Suspension and Debarment. Views of Responsible Officials - The Trust has a Procurement SOP that is fully responsive to CFR ?200.318, and the sampled expense complied with that policy when procured in April 2022. Federal funds were awarded in July 2022 permitting reimbursement of costs incurred as early as March 2021. At the direction of pass-through entity Westchester County, these one-time coronavirus relief funds were applied to reimburse the Trust for expenses selected by that entity even though the vendors were contracted prior to the award of relief funds. This retroactive application of coronavirus relief funds as stipulated by Westchester County is unlikely to recur. Nonetheless, the Trust will modify the Procurement SOP to clarify that multiple contracts with a single vendor must be treated as a single contract for purposes of the small purchase threshold and will ensure that all expenses are subject to the more stringent requirements under CFR ?200.318. Additionally, the Trust will modify the procurement procedures to ensure that suspension and debarment screening occurs prior to entering into contracts.
2022-002 Internal Control over Compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles ? Payroll Activities Information on the Major Federal Programs ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: State of Illinois, Department of Commerce and Economic Opportunity Program Title - Small Business Community Navigators Program Pass-through Entity Identifying Number - 21-483011 Sub-award Period - July 1, 2021 to June 30, 2022 National Endowment for the Humanities (NEH) Assistance Listing Number: 45.164 Assistance Listing Name: Promotion of the Humanities Public Programs Program Title - Telling the Full Story: Sustaining the Stewards of America?s Diverse Historic Places Award Number - ZOR-283411-21 Award Period - October 1, 2021 to September 30, 2023 Program Title - For the People by the People: Transforming National Trust Historic Sites through the Humanities Award Number - ZPP-283412-22 Award Period - October 1, 2021 to March 31, 2023 Criteria ? The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?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 establish 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 and/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.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) 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. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? During the audit, we noted that the Trust has a system of internal control by which every pay period, timesheets are submitted by each employee and approved by a supervisor. However, given the system limitations from the time-entry system, employees can only charge hours to their home department, and those employees who do not work solely on the federal program are not able to charge hours directly to the federal award through the system. Given the system limitations, program managers gathered documentation to evidence the hours and associated costs which should be charged to the federal award and recorded the corresponding personnel costs to the federal award through a journal entry; however, there was no direct evidence of review and approval of these personnel costs charged to the federal awards, other than an approval of the journal entry. While there was a lack of direct approval of hours charged to the federal program by program managers, we validated that the employees who charged time to the federal awards as part of our sample selection were included in the budgets for the federal programs. Cause ? The Trust?s system of internal control did not have procedures in place for program managers to approve the hours charged to the federal awards. Effect or Potential Effect ? Without direct approvals that the personnel costs charged are accurate, the Trust is not able to demonstrate that key elements in a system of internal control over recording of time exists. Questioned Costs ? None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding.Recommendation ? We recommend that the Trust strengthen its current policies and procedures to ensure that payroll costs charged to federal awards are supported by a system of internal controls that allows for timely employee preparation and certification and supervisory approval of time charged to the federal awards. Views of Responsible Officials - The Trust will implement procedures in fiscal year 2023 requiring supervisors to review and approve time charged to federal awards in addition to the reviews performed by finance staff as part of ongoing monitoring of federal awards, including approval of time incurred during the fiscal year prior to implementation of new procedures.
2022-002 Internal Control over Compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles ? Payroll Activities Information on the Major Federal Programs ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: State of Illinois, Department of Commerce and Economic Opportunity Program Title - Small Business Community Navigators Program Pass-through Entity Identifying Number - 21-483011 Sub-award Period - July 1, 2021 to June 30, 2022 National Endowment for the Humanities (NEH) Assistance Listing Number: 45.164 Assistance Listing Name: Promotion of the Humanities Public Programs Program Title - Telling the Full Story: Sustaining the Stewards of America?s Diverse Historic Places Award Number - ZOR-283411-21 Award Period - October 1, 2021 to September 30, 2023 Program Title - For the People by the People: Transforming National Trust Historic Sites through the Humanities Award Number - ZPP-283412-22 Award Period - October 1, 2021 to March 31, 2023 Criteria ? The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?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 establish 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 and/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.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) 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. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? During the audit, we noted that the Trust has a system of internal control by which every pay period, timesheets are submitted by each employee and approved by a supervisor. However, given the system limitations from the time-entry system, employees can only charge hours to their home department, and those employees who do not work solely on the federal program are not able to charge hours directly to the federal award through the system. Given the system limitations, program managers gathered documentation to evidence the hours and associated costs which should be charged to the federal award and recorded the corresponding personnel costs to the federal award through a journal entry; however, there was no direct evidence of review and approval of these personnel costs charged to the federal awards, other than an approval of the journal entry. While there was a lack of direct approval of hours charged to the federal program by program managers, we validated that the employees who charged time to the federal awards as part of our sample selection were included in the budgets for the federal programs. Cause ? The Trust?s system of internal control did not have procedures in place for program managers to approve the hours charged to the federal awards. Effect or Potential Effect ? Without direct approvals that the personnel costs charged are accurate, the Trust is not able to demonstrate that key elements in a system of internal control over recording of time exists. Questioned Costs ? None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding.Recommendation ? We recommend that the Trust strengthen its current policies and procedures to ensure that payroll costs charged to federal awards are supported by a system of internal controls that allows for timely employee preparation and certification and supervisory approval of time charged to the federal awards. Views of Responsible Officials - The Trust will implement procedures in fiscal year 2023 requiring supervisors to review and approve time charged to federal awards in addition to the reviews performed by finance staff as part of ongoing monitoring of federal awards, including approval of time incurred during the fiscal year prior to implementation of new procedures.
2022-002 Internal Control over Compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles ? Payroll Activities Information on the Major Federal Programs ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: State of Illinois, Department of Commerce and Economic Opportunity Program Title - Small Business Community Navigators Program Pass-through Entity Identifying Number - 21-483011 Sub-award Period - July 1, 2021 to June 30, 2022 National Endowment for the Humanities (NEH) Assistance Listing Number: 45.164 Assistance Listing Name: Promotion of the Humanities Public Programs Program Title - Telling the Full Story: Sustaining the Stewards of America?s Diverse Historic Places Award Number - ZOR-283411-21 Award Period - October 1, 2021 to September 30, 2023 Program Title - For the People by the People: Transforming National Trust Historic Sites through the Humanities Award Number - ZPP-283412-22 Award Period - October 1, 2021 to March 31, 2023 Criteria ? The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?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 establish 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 and/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.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) 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. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? During the audit, we noted that the Trust has a system of internal control by which every pay period, timesheets are submitted by each employee and approved by a supervisor. However, given the system limitations from the time-entry system, employees can only charge hours to their home department, and those employees who do not work solely on the federal program are not able to charge hours directly to the federal award through the system. Given the system limitations, program managers gathered documentation to evidence the hours and associated costs which should be charged to the federal award and recorded the corresponding personnel costs to the federal award through a journal entry; however, there was no direct evidence of review and approval of these personnel costs charged to the federal awards, other than an approval of the journal entry. While there was a lack of direct approval of hours charged to the federal program by program managers, we validated that the employees who charged time to the federal awards as part of our sample selection were included in the budgets for the federal programs. Cause ? The Trust?s system of internal control did not have procedures in place for program managers to approve the hours charged to the federal awards. Effect or Potential Effect ? Without direct approvals that the personnel costs charged are accurate, the Trust is not able to demonstrate that key elements in a system of internal control over recording of time exists. Questioned Costs ? None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding.Recommendation ? We recommend that the Trust strengthen its current policies and procedures to ensure that payroll costs charged to federal awards are supported by a system of internal controls that allows for timely employee preparation and certification and supervisory approval of time charged to the federal awards. Views of Responsible Officials - The Trust will implement procedures in fiscal year 2023 requiring supervisors to review and approve time charged to federal awards in addition to the reviews performed by finance staff as part of ongoing monitoring of federal awards, including approval of time incurred during the fiscal year prior to implementation of new procedures.