Finding 2023-003: Schedule of Expenditures of Federal Awards (Significant Deficiency)
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-002.Criteria: In accordance with 2 CFR Section 200.508 (b), USTTI is required to prepare appropriate
financial statements, including the Schedule of Expenditures of Federal Awards (SEFA).
Condition: USTTI experienced difficulty in ensuring that all Federal expenditures were identified,
categorized and included in the SEFA. Due to the amount of program codes in the accounting system,
it was difficult to identify which subprogram codes related to the various Federal programs. In addition,
indirect costs reported to the Federal granting agencies were not properly calculated. This condition
impacted the entire SEFA and is considered to be a systematic problem.
Cause: The high volume of subprogram codes was a contributing factor to the error as well as the
improper calculation of the indirect costs on the grants.
Effect: USTTI experienced difficulty in preparing an accurate SEFA.
Context: USTTI does not have processes and procedures in place to prepare an accurate SEFA.Questioned Costs: None.
Identification as a Repeat Finding: Yes. See Finding 2022-002.Recommendation: We recommend USTTI prepare its SEFA on a quarterly basis in accordance with
the Uniform Guidance, and it should be reviewed and approved by an individual in a supervisory
capacity with knowledge of the grant program. USTTI should ensure that the review process
encompasses agreeing the amounts in the SEFA to expenses recorded in the general ledger.
Additionally, USTTI should review the indirect rate calculation to ensure that is is accurate and that
USTTI is not charging more indirect costs than allowed in accordance with the terms of its grant.
Finding 2023-003: Schedule of Expenditures of Federal Awards (Significant Deficiency)
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-002.Criteria: In accordance with 2 CFR Section 200.508 (b), USTTI is required to prepare appropriate
financial statements, including the Schedule of Expenditures of Federal Awards (SEFA).
Condition: USTTI experienced difficulty in ensuring that all Federal expenditures were identified,
categorized and included in the SEFA. Due to the amount of program codes in the accounting system,
it was difficult to identify which subprogram codes related to the various Federal programs. In addition,
indirect costs reported to the Federal granting agencies were not properly calculated. This condition
impacted the entire SEFA and is considered to be a systematic problem.
Cause: The high volume of subprogram codes was a contributing factor to the error as well as the
improper calculation of the indirect costs on the grants.
Effect: USTTI experienced difficulty in preparing an accurate SEFA.
Context: USTTI does not have processes and procedures in place to prepare an accurate SEFA.Questioned Costs: None.
Identification as a Repeat Finding: Yes. See Finding 2022-002.Recommendation: We recommend USTTI prepare its SEFA on a quarterly basis in accordance with
the Uniform Guidance, and it should be reviewed and approved by an individual in a supervisory
capacity with knowledge of the grant program. USTTI should ensure that the review process
encompasses agreeing the amounts in the SEFA to expenses recorded in the general ledger.
Additionally, USTTI should review the indirect rate calculation to ensure that is is accurate and that
USTTI is not charging more indirect costs than allowed in accordance with the terms of its grant.
Finding 2023-004: Procurement (Significant Deficiency)
Information on the Federal Program: ALN 19.663 Global Telecommunications and Emerging
Technology Training
Criteria: 2 CFR 200.318 states that non-Federal entities must have and use documented procurement
procedures consistent with the requirements for procurement regulations included in paragraphs 318
through 327.
Condition: We noted procurement procedures are outsourced to a third party, but management is
heavily involved in the ultimate decision. However, the procurement policy is not formalized and
procurement actions are not documented and maintained in USTTI's vendor files.
Cause: USTTI did not have a documented formal procurement policy in accordance with the Uniform
Guidance.
Effect: A lack of a formal procurement policy is insufficient to meet the requirements of the Uniform
Guidance as noted in the Criteria section above.
Questioned Costs: None.
Context: Because USTTI does not have a formal procurement policy, it is not in compliance with the
Uniform Guidance.Context (continued): Our audit work in this area consisted of a test of internal controls over a random
sample of expenditures, as well as substantive tests of details over transactions above a defined
threshold from select expense accounts that were charged to the Federal program. We consider our
samples to be representative of the respective populations, and thus, are statistically valid samples.
Due to the timing of the audit for the year ended December 31, 2022, USTTI was not able to formalize
a policy for the year ended December 31, 2023. We noted that USTTI has formalized a procurement
policy during the year ended December 31, 2024.
Identification as a Repeat Finding: Yes. See Finding 2022-03.
Recommendation: We recommend USTTI formalize a procurement policy which is in compliance with
the Uniform Guidance. We also recommend that USTTI management ensure the procurement policy is
distributed and communicated in a formal manner to its employees, and that management properly
enforce compliance with the policy. All procurement actions should be clearly documented in writing
and maintained in the vendor or contractor files.
Finding 2023-005: Suspension and Debarment (Significant Deficiency)
Information on the Federal Program: ALN 19.663 Global Telecommunications and Emerging
Technology Training
Criteria: Under 2 CFR §200.213, non-Federal entities are subject to the non-procurement debarment
and suspension regulations included in Executive Orders 12549 and 12689 and 2 CFR part 180.
These regulations restrict awards, subawards, and contracts with certain parties that are debarred,
suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or
activities. The non-Federal entity must verify that the person with whom you intend to do business is
not excluded or disqualified, by (a) Checking SAM Exclusions; or (b) Collecting a certification from that
person; or (c) Adding a clause or condition to the covered transaction with that person.
Condition: During our testing over Suspension and Debarment, we determined that USTTI did not
perform screenings on potential or current vendors, suppliers or contractors that were paid with
Federal funds.
Cause: USTTI does not have a formal internal policy with respect to screening vendors, suppliers,
contractors and employees in order to adhere to compliance over suspension and debarment.
Effect: Failure to screen potential and current vendors, suppliers, contractors and employees
increases the potential that Federal funds be inadvertently provided to parties deemed to be
suspended or disbarred by the United States Government.
Questioned Costs: None.
Context: We noted that none of the vendors, suppliers etc. selected for testing had a formally
documented Suspension and Debarment check conducted prior to payment of their invoices.Context (Continued): Due to the timing of the audit for the year ended December 31, 2022, USTTI
was not able to formalize a policy for the year ended December 31, 2023. We noted that USTTI has
formalized a suspension and debarment policy during the year ended December 31, 2024.
Identification as a Repeat Finding: Yes. See Finding 2022-04.
Recommendation: We recommend that management develop and implement a formal policy on
suspension and debarment. This policy should include a threshold for when vendors, suppliers,
contractors and employees should be screened. All screenings should be conducted prior to signing a
contract or issuing payment. We recommend that USTTI notify all employees of this policy and ensure
that it is enforced during the upcoming fiscal year.
Finding 2023-006: Federal Financial Reporting (Significant Deficiency)
Information on the Federal Program: ALN 19.663 Global Telecommunications and Emerging
Technology Training
Criteria: The U.S. Department of State requires that USTTI submit a quarterly Federal Financial
Report (FFR), SF-425, in accordance with the quarterly schedule indicated in its grant agreement,
within 30 days following the end of each calendar quarter.
Condition: USTTI filed its FFR's for the fiscal year by the required due dates if there was activity.
However, we noted that the expenditures reported in the quarterly FFR's were not consistent with the
actual expenditures reported in the general ledger due to indirect costs which were incorrectly reported
as direct expenses on the FFR's. We also noted that USTTI incorrectly reported on the accrual basis of
accounting rather than on the cash basis of accounting on the quarterly FFR's.
Cause: Management did not have effective internal controls in place to ensure that the FFR's were
accurately filed and submitted.
Effect: Without established controls over reporting and reimbursement requests, there is a reasonable
possibility that USTTI would not detect noncompliance in the normal course of performing duties and
be able to correct them in a timely manner.
Questioned Costs: None.
Context: Our audit procedures consisted of reviewing the FFR's that were filed and comparing them to
the amounts reported in the general ledger. We consider our sample to be representative of the
population. The condition appears to be systemic in nature.
Identification as a Repeat Finding: Yes. See Finding 2022-05.Recommendation: We recommend USTTI prepare the FFR's based on actual expenditures for each
quarter. Since it is likely indirect rate adjustments may occur after quarter-end, USTTI should make
efforts to ensure these transactions are reflected in the general ledger before preparation of the FFR's,
while still meeting the FFR submission deadlines.
Finding 2023-003: Schedule of Expenditures of Federal Awards (Significant Deficiency)
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-002.Criteria: In accordance with 2 CFR Section 200.508 (b), USTTI is required to prepare appropriate
financial statements, including the Schedule of Expenditures of Federal Awards (SEFA).
Condition: USTTI experienced difficulty in ensuring that all Federal expenditures were identified,
categorized and included in the SEFA. Due to the amount of program codes in the accounting system,
it was difficult to identify which subprogram codes related to the various Federal programs. In addition,
indirect costs reported to the Federal granting agencies were not properly calculated. This condition
impacted the entire SEFA and is considered to be a systematic problem.
Cause: The high volume of subprogram codes was a contributing factor to the error as well as the
improper calculation of the indirect costs on the grants.
Effect: USTTI experienced difficulty in preparing an accurate SEFA.
Context: USTTI does not have processes and procedures in place to prepare an accurate SEFA.Questioned Costs: None.
Identification as a Repeat Finding: Yes. See Finding 2022-002.Recommendation: We recommend USTTI prepare its SEFA on a quarterly basis in accordance with
the Uniform Guidance, and it should be reviewed and approved by an individual in a supervisory
capacity with knowledge of the grant program. USTTI should ensure that the review process
encompasses agreeing the amounts in the SEFA to expenses recorded in the general ledger.
Additionally, USTTI should review the indirect rate calculation to ensure that is is accurate and that
USTTI is not charging more indirect costs than allowed in accordance with the terms of its grant.
Finding 2023-003: Schedule of Expenditures of Federal Awards (Significant Deficiency)
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-002.Criteria: In accordance with 2 CFR Section 200.508 (b), USTTI is required to prepare appropriate
financial statements, including the Schedule of Expenditures of Federal Awards (SEFA).
Condition: USTTI experienced difficulty in ensuring that all Federal expenditures were identified,
categorized and included in the SEFA. Due to the amount of program codes in the accounting system,
it was difficult to identify which subprogram codes related to the various Federal programs. In addition,
indirect costs reported to the Federal granting agencies were not properly calculated. This condition
impacted the entire SEFA and is considered to be a systematic problem.
Cause: The high volume of subprogram codes was a contributing factor to the error as well as the
improper calculation of the indirect costs on the grants.
Effect: USTTI experienced difficulty in preparing an accurate SEFA.
Context: USTTI does not have processes and procedures in place to prepare an accurate SEFA.Questioned Costs: None.
Identification as a Repeat Finding: Yes. See Finding 2022-002.Recommendation: We recommend USTTI prepare its SEFA on a quarterly basis in accordance with
the Uniform Guidance, and it should be reviewed and approved by an individual in a supervisory
capacity with knowledge of the grant program. USTTI should ensure that the review process
encompasses agreeing the amounts in the SEFA to expenses recorded in the general ledger.
Additionally, USTTI should review the indirect rate calculation to ensure that is is accurate and that
USTTI is not charging more indirect costs than allowed in accordance with the terms of its grant.
Finding 2023-004: Procurement (Significant Deficiency)
Information on the Federal Program: ALN 19.663 Global Telecommunications and Emerging
Technology Training
Criteria: 2 CFR 200.318 states that non-Federal entities must have and use documented procurement
procedures consistent with the requirements for procurement regulations included in paragraphs 318
through 327.
Condition: We noted procurement procedures are outsourced to a third party, but management is
heavily involved in the ultimate decision. However, the procurement policy is not formalized and
procurement actions are not documented and maintained in USTTI's vendor files.
Cause: USTTI did not have a documented formal procurement policy in accordance with the Uniform
Guidance.
Effect: A lack of a formal procurement policy is insufficient to meet the requirements of the Uniform
Guidance as noted in the Criteria section above.
Questioned Costs: None.
Context: Because USTTI does not have a formal procurement policy, it is not in compliance with the
Uniform Guidance.Context (continued): Our audit work in this area consisted of a test of internal controls over a random
sample of expenditures, as well as substantive tests of details over transactions above a defined
threshold from select expense accounts that were charged to the Federal program. We consider our
samples to be representative of the respective populations, and thus, are statistically valid samples.
Due to the timing of the audit for the year ended December 31, 2022, USTTI was not able to formalize
a policy for the year ended December 31, 2023. We noted that USTTI has formalized a procurement
policy during the year ended December 31, 2024.
Identification as a Repeat Finding: Yes. See Finding 2022-03.
Recommendation: We recommend USTTI formalize a procurement policy which is in compliance with
the Uniform Guidance. We also recommend that USTTI management ensure the procurement policy is
distributed and communicated in a formal manner to its employees, and that management properly
enforce compliance with the policy. All procurement actions should be clearly documented in writing
and maintained in the vendor or contractor files.
Finding 2023-005: Suspension and Debarment (Significant Deficiency)
Information on the Federal Program: ALN 19.663 Global Telecommunications and Emerging
Technology Training
Criteria: Under 2 CFR §200.213, non-Federal entities are subject to the non-procurement debarment
and suspension regulations included in Executive Orders 12549 and 12689 and 2 CFR part 180.
These regulations restrict awards, subawards, and contracts with certain parties that are debarred,
suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or
activities. The non-Federal entity must verify that the person with whom you intend to do business is
not excluded or disqualified, by (a) Checking SAM Exclusions; or (b) Collecting a certification from that
person; or (c) Adding a clause or condition to the covered transaction with that person.
Condition: During our testing over Suspension and Debarment, we determined that USTTI did not
perform screenings on potential or current vendors, suppliers or contractors that were paid with
Federal funds.
Cause: USTTI does not have a formal internal policy with respect to screening vendors, suppliers,
contractors and employees in order to adhere to compliance over suspension and debarment.
Effect: Failure to screen potential and current vendors, suppliers, contractors and employees
increases the potential that Federal funds be inadvertently provided to parties deemed to be
suspended or disbarred by the United States Government.
Questioned Costs: None.
Context: We noted that none of the vendors, suppliers etc. selected for testing had a formally
documented Suspension and Debarment check conducted prior to payment of their invoices.Context (Continued): Due to the timing of the audit for the year ended December 31, 2022, USTTI
was not able to formalize a policy for the year ended December 31, 2023. We noted that USTTI has
formalized a suspension and debarment policy during the year ended December 31, 2024.
Identification as a Repeat Finding: Yes. See Finding 2022-04.
Recommendation: We recommend that management develop and implement a formal policy on
suspension and debarment. This policy should include a threshold for when vendors, suppliers,
contractors and employees should be screened. All screenings should be conducted prior to signing a
contract or issuing payment. We recommend that USTTI notify all employees of this policy and ensure
that it is enforced during the upcoming fiscal year.
Finding 2023-006: Federal Financial Reporting (Significant Deficiency)
Information on the Federal Program: ALN 19.663 Global Telecommunications and Emerging
Technology Training
Criteria: The U.S. Department of State requires that USTTI submit a quarterly Federal Financial
Report (FFR), SF-425, in accordance with the quarterly schedule indicated in its grant agreement,
within 30 days following the end of each calendar quarter.
Condition: USTTI filed its FFR's for the fiscal year by the required due dates if there was activity.
However, we noted that the expenditures reported in the quarterly FFR's were not consistent with the
actual expenditures reported in the general ledger due to indirect costs which were incorrectly reported
as direct expenses on the FFR's. We also noted that USTTI incorrectly reported on the accrual basis of
accounting rather than on the cash basis of accounting on the quarterly FFR's.
Cause: Management did not have effective internal controls in place to ensure that the FFR's were
accurately filed and submitted.
Effect: Without established controls over reporting and reimbursement requests, there is a reasonable
possibility that USTTI would not detect noncompliance in the normal course of performing duties and
be able to correct them in a timely manner.
Questioned Costs: None.
Context: Our audit procedures consisted of reviewing the FFR's that were filed and comparing them to
the amounts reported in the general ledger. We consider our sample to be representative of the
population. The condition appears to be systemic in nature.
Identification as a Repeat Finding: Yes. See Finding 2022-05.Recommendation: We recommend USTTI prepare the FFR's based on actual expenditures for each
quarter. Since it is likely indirect rate adjustments may occur after quarter-end, USTTI should make
efforts to ensure these transactions are reflected in the general ledger before preparation of the FFR's,
while still meeting the FFR submission deadlines.