FAC Explorer

Audit 339789

FY End
2023-06-30
Total Expended
$10.17M
Findings
6
Programs
2
Organization: Central Montana Regional Water Authority (MT)
Year: 2023 Accepted: 2025-01-24
Auditor: Douglas Wilson & Company PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
520223 2023-002 Significant Deficiency - A
520224 2023-003 Significant Deficiency - L
520225 2023-003 Significant Deficiency - L
1096665 2023-002 Significant Deficiency - A
1096666 2023-003 Significant Deficiency - L
1096667 2023-003 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
10.760 Water and Waste Disposal Systems for Rural Communities $6.60M Yes 1
21.027 Coronavirus State and Local Fiscal Recovery Funds $3.57M Yes 2

Contacts

Name Title Type
HU59MMFLRBG1 Monty Auditee
4063236060 Melissa Soldano Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1: BASIS OF ACCOUNTING: Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Authority and the information is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Authority did not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Authority and the information is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.
Title: NOTE 2: INDIRECT COST RATE: Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Authority and the information is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Authority did not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Authority did not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2023-002
Allowable Costs and Cost Principles U.S. Department of Treasury, passed through from the Montana Department of Natural Resources and Conservation ALN: 21.027, Coronavirus State and Local Fiscal Recovery Funds Criteria: The grant award RW-22-077A scope of work is for Phase 3, 3A and 4 – LiDAR Survey of Pipeline Routes. Musselshell County also contracted with the Authority to pay for a portion of these costs. Code section 2 CFR 200.302 requires recipients to maintain appropriate records and documentation to sufficiently identify the amount, source and expenditure of federal funds for federal awards. Condition: The Authority received reimbursement for expenses incurred from the County and the Montana Department of Natural Resources and Conservation (DNRC), totaling $55,698. The same costs were incorrectly counted toward both funding sources. Context: The Authority collected revenue twice for the same costs. No funds were reimbursed to the County. For the DNRC, additional costs were incurred through June 30, 2023, that totaled $13,512, which were not included in any draws or cash receipts from DNRC through June 30, 2023. So essentially the Authority used up some of this overage before year end, resulting in an overage of $42,186. Effect: The Authority overdrew on revenue by $55,698. Questioned Costs: We question the costs reported as federal expenditures for this program totaling $42,186. Cause: The Authority made an error when submitting reimbursement for costs incurred. Auditor Recommendation: We recommend the Authority: 1) reimburse DNRC or the County for the overage, 2) strengthen internal controls over tracking of expenditures for grants to ensure duplication does not occur in the future. Authority Response: Based upon DNRC direction, the Authority will pay back DNRC with water user fees from Roundup. The Project Administrator will work with the outside accountant to assist with the record keeping of the Authority
Finding 2023-003
Reporting U.S. Department of Treasury, passed through from the Montana Department of Natural Resources and Conservation ALN: 21.027, Coronavirus State and Local Fiscal Recovery Funds U.S. Department of Agriculture ALN: 10.760, Water and Waste Disposal Systems for Rural Communities Criteria: The grant award RW-22-077A required quarterly progress reports for the periods ending March, June, September, and December be submitted to DNRC during the term of the award. The US Department of Agriculture, Rural Development award also requires quarterly income and expense reports. Condition: For the RW-22-077A award, the Authority only submitted one quarterly report. For the Rural Development award, the Authority submitted summaries, invoice copies, and other documentation, and Rural Development acknowledged each draw request that was submitted. Context: The information included in the reports and submitted to Rural Development provided agreed to the accounting records and supporting documents. Effect: The Authority did not comply with the reporting requirements outlined in the award agreements. Questioned Costs: None Cause: For the RW-22-077A award, only one was submitted because there were so few draws the information would have been redundant with no additional information included in the omitted reports. For both awards, with each draw request, the Authority includes copies of invoices and a summary of all expenses compared to the grant award balances. For the Rural Development award, the Authority gets a confirmation from Rural Development and they have accepted this method; the Authority has not prepared financial reports using the Rural Development 442-2 or 442-3 reports. Auditor Recommendation: We recommend that the Authority follow the terms of the grant awards and submit the reports required in the awards. Authority Response: The Project Administrator and the outside accountant will work with the grantor entities and submit reports as required, based on direction provided by the grantors.
Finding 2023-003
Reporting U.S. Department of Treasury, passed through from the Montana Department of Natural Resources and Conservation ALN: 21.027, Coronavirus State and Local Fiscal Recovery Funds U.S. Department of Agriculture ALN: 10.760, Water and Waste Disposal Systems for Rural Communities Criteria: The grant award RW-22-077A required quarterly progress reports for the periods ending March, June, September, and December be submitted to DNRC during the term of the award. The US Department of Agriculture, Rural Development award also requires quarterly income and expense reports. Condition: For the RW-22-077A award, the Authority only submitted one quarterly report. For the Rural Development award, the Authority submitted summaries, invoice copies, and other documentation, and Rural Development acknowledged each draw request that was submitted. Context: The information included in the reports and submitted to Rural Development provided agreed to the accounting records and supporting documents. Effect: The Authority did not comply with the reporting requirements outlined in the award agreements. Questioned Costs: None Cause: For the RW-22-077A award, only one was submitted because there were so few draws the information would have been redundant with no additional information included in the omitted reports. For both awards, with each draw request, the Authority includes copies of invoices and a summary of all expenses compared to the grant award balances. For the Rural Development award, the Authority gets a confirmation from Rural Development and they have accepted this method; the Authority has not prepared financial reports using the Rural Development 442-2 or 442-3 reports. Auditor Recommendation: We recommend that the Authority follow the terms of the grant awards and submit the reports required in the awards. Authority Response: The Project Administrator and the outside accountant will work with the grantor entities and submit reports as required, based on direction provided by the grantors.
Finding 2023-002
Allowable Costs and Cost Principles U.S. Department of Treasury, passed through from the Montana Department of Natural Resources and Conservation ALN: 21.027, Coronavirus State and Local Fiscal Recovery Funds Criteria: The grant award RW-22-077A scope of work is for Phase 3, 3A and 4 – LiDAR Survey of Pipeline Routes. Musselshell County also contracted with the Authority to pay for a portion of these costs. Code section 2 CFR 200.302 requires recipients to maintain appropriate records and documentation to sufficiently identify the amount, source and expenditure of federal funds for federal awards. Condition: The Authority received reimbursement for expenses incurred from the County and the Montana Department of Natural Resources and Conservation (DNRC), totaling $55,698. The same costs were incorrectly counted toward both funding sources. Context: The Authority collected revenue twice for the same costs. No funds were reimbursed to the County. For the DNRC, additional costs were incurred through June 30, 2023, that totaled $13,512, which were not included in any draws or cash receipts from DNRC through June 30, 2023. So essentially the Authority used up some of this overage before year end, resulting in an overage of $42,186. Effect: The Authority overdrew on revenue by $55,698. Questioned Costs: We question the costs reported as federal expenditures for this program totaling $42,186. Cause: The Authority made an error when submitting reimbursement for costs incurred. Auditor Recommendation: We recommend the Authority: 1) reimburse DNRC or the County for the overage, 2) strengthen internal controls over tracking of expenditures for grants to ensure duplication does not occur in the future. Authority Response: Based upon DNRC direction, the Authority will pay back DNRC with water user fees from Roundup. The Project Administrator will work with the outside accountant to assist with the record keeping of the Authority
Finding 2023-003
Reporting U.S. Department of Treasury, passed through from the Montana Department of Natural Resources and Conservation ALN: 21.027, Coronavirus State and Local Fiscal Recovery Funds U.S. Department of Agriculture ALN: 10.760, Water and Waste Disposal Systems for Rural Communities Criteria: The grant award RW-22-077A required quarterly progress reports for the periods ending March, June, September, and December be submitted to DNRC during the term of the award. The US Department of Agriculture, Rural Development award also requires quarterly income and expense reports. Condition: For the RW-22-077A award, the Authority only submitted one quarterly report. For the Rural Development award, the Authority submitted summaries, invoice copies, and other documentation, and Rural Development acknowledged each draw request that was submitted. Context: The information included in the reports and submitted to Rural Development provided agreed to the accounting records and supporting documents. Effect: The Authority did not comply with the reporting requirements outlined in the award agreements. Questioned Costs: None Cause: For the RW-22-077A award, only one was submitted because there were so few draws the information would have been redundant with no additional information included in the omitted reports. For both awards, with each draw request, the Authority includes copies of invoices and a summary of all expenses compared to the grant award balances. For the Rural Development award, the Authority gets a confirmation from Rural Development and they have accepted this method; the Authority has not prepared financial reports using the Rural Development 442-2 or 442-3 reports. Auditor Recommendation: We recommend that the Authority follow the terms of the grant awards and submit the reports required in the awards. Authority Response: The Project Administrator and the outside accountant will work with the grantor entities and submit reports as required, based on direction provided by the grantors.
Finding 2023-003
Reporting U.S. Department of Treasury, passed through from the Montana Department of Natural Resources and Conservation ALN: 21.027, Coronavirus State and Local Fiscal Recovery Funds U.S. Department of Agriculture ALN: 10.760, Water and Waste Disposal Systems for Rural Communities Criteria: The grant award RW-22-077A required quarterly progress reports for the periods ending March, June, September, and December be submitted to DNRC during the term of the award. The US Department of Agriculture, Rural Development award also requires quarterly income and expense reports. Condition: For the RW-22-077A award, the Authority only submitted one quarterly report. For the Rural Development award, the Authority submitted summaries, invoice copies, and other documentation, and Rural Development acknowledged each draw request that was submitted. Context: The information included in the reports and submitted to Rural Development provided agreed to the accounting records and supporting documents. Effect: The Authority did not comply with the reporting requirements outlined in the award agreements. Questioned Costs: None Cause: For the RW-22-077A award, only one was submitted because there were so few draws the information would have been redundant with no additional information included in the omitted reports. For both awards, with each draw request, the Authority includes copies of invoices and a summary of all expenses compared to the grant award balances. For the Rural Development award, the Authority gets a confirmation from Rural Development and they have accepted this method; the Authority has not prepared financial reports using the Rural Development 442-2 or 442-3 reports. Auditor Recommendation: We recommend that the Authority follow the terms of the grant awards and submit the reports required in the awards. Authority Response: The Project Administrator and the outside accountant will work with the grantor entities and submit reports as required, based on direction provided by the grantors.