Audit 330601

2020 ‐ 001: Material Weaknesses in Internal Controls over Compliance— Activities Allowed and Allowable Costs for Non-payroll expenses, Period of Performance, Reporting, and Special Test and Provisions. Federal Program - Disaster Grants - Public Assistance (Presidentially Declared Disasters) – ALN 97.036 Year: 2020 Federal Agency: US Department of Homeland Security Pass-Through Entity: The Minnesota Division of Homeland Security Criteria — Recipients receiving Federal awards must establish and maintain effective internal controls over the Federal awards that provide reasonable assurance the recipient is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. A structured review process is a key element of any effective internal control framework designed to prevent or detect noncompliance. Condition — When performing procedures to obtain an understanding of internal controls over the program, there was no evidence maintained of designed, implemented, and operating controls for fiscal year 2020. Cause — The entity had turnover of program staff and a change in its IT systems subsequent to the grant expenses being incurred and the audit being performed. These changes resulted in a lack of evidence maintained from the period of the related expenses to support the design, implementation, and operations of the entity’s controls over compliance with federal awards terms and conditions. Effect — The failure to maintain adequate evidence of the design, implementation and operation of controls over compliance could lead to noncompliance with the terms and conditions of federal awards and potential loss of funding. Questioned Cost — N/A Context —The understanding of the internal controls yielded the following results: Compliance requirement Control Finding Activities Allowed and Allowable Costs (Non-Payroll) & Period of Performance There was no evidence maintained to support the design, implementation or operation of the control in place to ensure that vendor invoices were accurately reviewed for allowability and that it was incurred in the period stipulated in the grant agreement prior to the submission for reimbursement. Reporting & Special Test There was no evidence maintained to support the design, implementation or operation of the control in place to ensure a proper review was performed prior to the deadline to verify if the report was accurate and complete. Recommendation — Management should design processes to ensure that evidence of their controls design, implementation and operation are maintained to support the compliance with the terms and conditions of their grant awards. View of Responsible Officials — See Corrective Action Plan

2020 ‐ 001: Material Weaknesses in Internal Controls over Compliance— Activities Allowed and Allowable Costs for Non-payroll expenses, Period of Performance, Reporting, and Special Test and Provisions. Federal Program - Disaster Grants - Public Assistance (Presidentially Declared Disasters) – ALN 97.036 Year: 2020 Federal Agency: US Department of Homeland Security Pass-Through Entity: The Minnesota Division of Homeland Security Criteria — Recipients receiving Federal awards must establish and maintain effective internal controls over the Federal awards that provide reasonable assurance the recipient is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. A structured review process is a key element of any effective internal control framework designed to prevent or detect noncompliance. Condition — When performing procedures to obtain an understanding of internal controls over the program, there was no evidence maintained of designed, implemented, and operating controls for fiscal year 2020. Cause — The entity had turnover of program staff and a change in its IT systems subsequent to the grant expenses being incurred and the audit being performed. These changes resulted in a lack of evidence maintained from the period of the related expenses to support the design, implementation, and operations of the entity’s controls over compliance with federal awards terms and conditions. Effect — The failure to maintain adequate evidence of the design, implementation and operation of controls over compliance could lead to noncompliance with the terms and conditions of federal awards and potential loss of funding. Questioned Cost — N/A Context —The understanding of the internal controls yielded the following results: Compliance requirement Control Finding Activities Allowed and Allowable Costs (Non-Payroll) & Period of Performance There was no evidence maintained to support the design, implementation or operation of the control in place to ensure that vendor invoices were accurately reviewed for allowability and that it was incurred in the period stipulated in the grant agreement prior to the submission for reimbursement. Reporting & Special Test There was no evidence maintained to support the design, implementation or operation of the control in place to ensure a proper review was performed prior to the deadline to verify if the report was accurate and complete. Recommendation — Management should design processes to ensure that evidence of their controls design, implementation and operation are maintained to support the compliance with the terms and conditions of their grant awards. View of Responsible Officials — See Corrective Action Plan