FINDING 2022-003 Subject: Staffing for Adequate Fire and Emergency Response (SAFER) - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, and Period of Performance Federal Agency: Department of Homeland Security Federal Program: Staffing for Adequate Fire and Emergency Response (SAFER) Assistance Listings Number: 97.083 Federal Award Numbers and Years (or Other Identifying Numbers): EMW-2017-FH-00374, EMW-2019-FF-01116 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance Audit Finding: Material Weakness Condition and Context The District had designed, but did not adequately document implementation of a system of internal controls that would likely be effective in preventing, or detecting and correcting, material noncompliance. The District incurred and paid for payroll and other related expenses, and then requested reimbursement from the federal agency for these costs. Costs requested for reimbursement from the federal agency are to be allowable per the grant, adequately supported, paid prior to reimbursement, and paid within the period of performance. The District submitted seven reimbursement requests during the audit period. The Financial Coordinator compiled the payroll and benefit amounts to be submitted for reimbursement and provided it to the Fire Chief. The reimbursement request was then filed by the Fire Chief without evidence of an oversight or review process in place to prevent, or detect and correct, errors to ensure the payroll was an allowable activity, allowable cost, paid prior to reimbursement, and within the period of performance. The lack of internal controls was a systemic issue throughout the audit period. Criteria. 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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 be in compliance 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). . . ." Cause The system of internal controls, as documented by management of the District, could not be verified as being implemented. While the District had a written policy outlining the procedures to ensure the activity was allowable per the grant, adequately supported, paid prior to reimbursement, and paid within the period of performance documentation of the implementation of the procedures as intended was not maintained. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect management's statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the District design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Staffing for Adequate Fire and Emergency Response (SAFER) - Reporting Federal Agency: Department of Homeland Security Federal Program: Staffing for Adequate Fire and Emergency Response (SAFER) Assistance Listings Number: 97.083 Federal Award Numbers and Years (or Other Identifying Numbers): EMW-2017-FH-00374, EMW-2019-FF-01116 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context Recipients are required to submit Reimbursement Requests, Quarterly Performance Reports, and Semi-Annual SF-425 Federal Financial Reports to the Federal Emergency Management Agency (FEMA). The reporting periods, as well as the respective due dates, are based on the calendar year, and recipients must begin to submit reports in the period following the beginning of their period of performance, and throughout the entire period of performance of the grant. Information to be reported includes expenditures for the appropriate reporting period. Reimbursement Requests The District submitted seven Reimbursement Requests during the audit period. The Financial Coordinator prepared a sheet with the payroll and benefit amounts to be submitted for reimbursement and provided it to the Fire Chief. The Reimbursement Requests were filed by the Fire Chief without a review or oversight process in place to prevent, or detect and correct, errors. Quarterly and Programmatic Performance Reports and Semi-Annual SF-425 Federal Financial Reports EMW-2017-FH-00374 (2017 grant) The District had not implemented or designed a system of internal controls to ensure submission of the Quarterly Performance Reports (quarterly reports) or the Semi-Annual SF-425 Federal Financial Reports. During the audit period, the District was required to submit three quarterly reports and two semi-annual reports. The submission dates for the three quarterly reports could not be determined. Additionally, the District did not submit the Semi-Annual SF-425 Federal Financial Reports that were due by January 30, 2022, and July 30, 2022, in a timely manner. The two reports due were submitted 18 and 19 days late, respectively. EMW-2019-FF-01116 (2019 grant) The District had not implemented or designed a system of internal controls to ensure submission of the Programmatic Performance Report (PPR) or the Semi-Annual SF-425 Federal Financial Report (semi-annual report). During the audit period, the District was required to submit one PPR and two semi-annual reports. The submission date for the PPR, that was due April 30, 2022, could not be determined. In addition, the District did not submit the semi-annual reports that were due by January 30, 2022, and July 30, 2022, in a timely manner. The two reports were submitted 30 and 13 days late, respectively. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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 be in compliance 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). . . ." 2 CFR 200.329(c)(1) states in part: "The non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be no less frequent than annually nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes. Reports submitted annually by the non-Federal entity and/or pass-through entity must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. . . ." Cause A system of internal controls was not designed or implemented by management of the District, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect management's statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the seven Quarterly Performance Reports and the four Semi-Annual SF-425 Federal Financial Reports due during the audit period were either not submitted or not submitted timely. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the District. Questioned Costs There were no questioned costs. Recommendation We recommended that management of the District design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place over reimbursement requisitions. In addition, we recommended that management of the District establish a proper system of internal controls and develop policies and procedures to ensure that all required reports are filed and filed timely. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Staffing for Adequate Fire and Emergency Response (SAFER) - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, and Period of Performance Federal Agency: Department of Homeland Security Federal Program: Staffing for Adequate Fire and Emergency Response (SAFER) Assistance Listings Number: 97.083 Federal Award Numbers and Years (or Other Identifying Numbers): EMW-2017-FH-00374, EMW-2019-FF-01116 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance Audit Finding: Material Weakness Condition and Context The District had designed, but did not adequately document implementation of a system of internal controls that would likely be effective in preventing, or detecting and correcting, material noncompliance. The District incurred and paid for payroll and other related expenses, and then requested reimbursement from the federal agency for these costs. Costs requested for reimbursement from the federal agency are to be allowable per the grant, adequately supported, paid prior to reimbursement, and paid within the period of performance. The District submitted seven reimbursement requests during the audit period. The Financial Coordinator compiled the payroll and benefit amounts to be submitted for reimbursement and provided it to the Fire Chief. The reimbursement request was then filed by the Fire Chief without evidence of an oversight or review process in place to prevent, or detect and correct, errors to ensure the payroll was an allowable activity, allowable cost, paid prior to reimbursement, and within the period of performance. The lack of internal controls was a systemic issue throughout the audit period. Criteria. 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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 be in compliance 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). . . ." Cause The system of internal controls, as documented by management of the District, could not be verified as being implemented. While the District had a written policy outlining the procedures to ensure the activity was allowable per the grant, adequately supported, paid prior to reimbursement, and paid within the period of performance documentation of the implementation of the procedures as intended was not maintained. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect management's statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the District design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Staffing for Adequate Fire and Emergency Response (SAFER) - Reporting Federal Agency: Department of Homeland Security Federal Program: Staffing for Adequate Fire and Emergency Response (SAFER) Assistance Listings Number: 97.083 Federal Award Numbers and Years (or Other Identifying Numbers): EMW-2017-FH-00374, EMW-2019-FF-01116 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context Recipients are required to submit Reimbursement Requests, Quarterly Performance Reports, and Semi-Annual SF-425 Federal Financial Reports to the Federal Emergency Management Agency (FEMA). The reporting periods, as well as the respective due dates, are based on the calendar year, and recipients must begin to submit reports in the period following the beginning of their period of performance, and throughout the entire period of performance of the grant. Information to be reported includes expenditures for the appropriate reporting period. Reimbursement Requests The District submitted seven Reimbursement Requests during the audit period. The Financial Coordinator prepared a sheet with the payroll and benefit amounts to be submitted for reimbursement and provided it to the Fire Chief. The Reimbursement Requests were filed by the Fire Chief without a review or oversight process in place to prevent, or detect and correct, errors. Quarterly and Programmatic Performance Reports and Semi-Annual SF-425 Federal Financial Reports EMW-2017-FH-00374 (2017 grant) The District had not implemented or designed a system of internal controls to ensure submission of the Quarterly Performance Reports (quarterly reports) or the Semi-Annual SF-425 Federal Financial Reports. During the audit period, the District was required to submit three quarterly reports and two semi-annual reports. The submission dates for the three quarterly reports could not be determined. Additionally, the District did not submit the Semi-Annual SF-425 Federal Financial Reports that were due by January 30, 2022, and July 30, 2022, in a timely manner. The two reports due were submitted 18 and 19 days late, respectively. EMW-2019-FF-01116 (2019 grant) The District had not implemented or designed a system of internal controls to ensure submission of the Programmatic Performance Report (PPR) or the Semi-Annual SF-425 Federal Financial Report (semi-annual report). During the audit period, the District was required to submit one PPR and two semi-annual reports. The submission date for the PPR, that was due April 30, 2022, could not be determined. In addition, the District did not submit the semi-annual reports that were due by January 30, 2022, and July 30, 2022, in a timely manner. The two reports were submitted 30 and 13 days late, respectively. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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 be in compliance 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). . . ." 2 CFR 200.329(c)(1) states in part: "The non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be no less frequent than annually nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes. Reports submitted annually by the non-Federal entity and/or pass-through entity must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. . . ." Cause A system of internal controls was not designed or implemented by management of the District, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect management's statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the seven Quarterly Performance Reports and the four Semi-Annual SF-425 Federal Financial Reports due during the audit period were either not submitted or not submitted timely. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the District. Questioned Costs There were no questioned costs. Recommendation We recommended that management of the District design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place over reimbursement requisitions. In addition, we recommended that management of the District establish a proper system of internal controls and develop policies and procedures to ensure that all required reports are filed and filed timely. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.