Audit 342645

Finding No.: 2023-008 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Criteria: In accordance with applicable quality control and program integrity requirements relative to D- SNAP, Guam Department of Public Health and Social Services, Bureau of Economic Security (BES), will perform the following: 1. Review 100 percent of all applications from permanent and temporary government employees. These results must be included in the Post-Disaster Report. 2. Conduct individual case reviews (public and employee cases) to ensure D-SNAP eligibility and allotments were correctly determined. Condition: 1. BES neither identified applications from government employees nor reviewed 100% of all applications from government employees, and therefore, the results are not included in the Post-Disaster Report. 2. No documentation was provided to substantiate that BES conducted the required individual case reviews. Cause: GovGuam did not effectively monitor compliance with applicable D-SNAP quality control and program integrity requirements given the high volume of applications and limited staffing. Effect: GovGuam is in noncompliance with applicable D-SNAP quality control and program integrity requirements. No questioned cost is reported as we are unable to quantify the extent of noncompliance. Recommendation: Responsible personnel should perform the required verifications and reviews in accordance with applicable quality control and program integrity requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 37 Finding No.: 2023-008, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Views of Responsible Officials: We agree with this finding. Due to the overwhelming volume of applications, it was difficult to determine and review 100% of applications. The current application does not specify, whether the applicant or a household member is a government employee. The goal was to service as many people as possible in a very short time frame. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan.

Finding No.: 2023-008 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Criteria: In accordance with applicable quality control and program integrity requirements relative to D- SNAP, Guam Department of Public Health and Social Services, Bureau of Economic Security (BES), will perform the following: 1. Review 100 percent of all applications from permanent and temporary government employees. These results must be included in the Post-Disaster Report. 2. Conduct individual case reviews (public and employee cases) to ensure D-SNAP eligibility and allotments were correctly determined. Condition: 1. BES neither identified applications from government employees nor reviewed 100% of all applications from government employees, and therefore, the results are not included in the Post-Disaster Report. 2. No documentation was provided to substantiate that BES conducted the required individual case reviews. Cause: GovGuam did not effectively monitor compliance with applicable D-SNAP quality control and program integrity requirements given the high volume of applications and limited staffing. Effect: GovGuam is in noncompliance with applicable D-SNAP quality control and program integrity requirements. No questioned cost is reported as we are unable to quantify the extent of noncompliance. Recommendation: Responsible personnel should perform the required verifications and reviews in accordance with applicable quality control and program integrity requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 37 Finding No.: 2023-008, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Views of Responsible Officials: We agree with this finding. Due to the overwhelming volume of applications, it was difficult to determine and review 100% of applications. The current application does not specify, whether the applicant or a household member is a government employee. The goal was to service as many people as possible in a very short time frame. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan.

Finding No.: 2023-008 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Criteria: In accordance with applicable quality control and program integrity requirements relative to D- SNAP, Guam Department of Public Health and Social Services, Bureau of Economic Security (BES), will perform the following: 1. Review 100 percent of all applications from permanent and temporary government employees. These results must be included in the Post-Disaster Report. 2. Conduct individual case reviews (public and employee cases) to ensure D-SNAP eligibility and allotments were correctly determined. Condition: 1. BES neither identified applications from government employees nor reviewed 100% of all applications from government employees, and therefore, the results are not included in the Post-Disaster Report. 2. No documentation was provided to substantiate that BES conducted the required individual case reviews. Cause: GovGuam did not effectively monitor compliance with applicable D-SNAP quality control and program integrity requirements given the high volume of applications and limited staffing. Effect: GovGuam is in noncompliance with applicable D-SNAP quality control and program integrity requirements. No questioned cost is reported as we are unable to quantify the extent of noncompliance. Recommendation: Responsible personnel should perform the required verifications and reviews in accordance with applicable quality control and program integrity requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 37 Finding No.: 2023-008, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Views of Responsible Officials: We agree with this finding. Due to the overwhelming volume of applications, it was difficult to determine and review 100% of applications. The current application does not specify, whether the applicant or a household member is a government employee. The goal was to service as many people as possible in a very short time frame. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan.

Finding No.: 2023-009 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Criteria: In accordance with applicable special tests and provisions requirements for the ADP system for SNAP, States must accurately and completely process and securely store all case file information for eligibility determination and benefit calculation. Condition: For four (or 10%) of forty case files tested, aggregating $27,292 of $151.9 million in total Program benefits, the data obtained from PHPro does not have files to substantiate all case file information that has been input in the system, including the certification period. Further, Case Number 201301439 incorrectly processed the household size of the applicant, resulting in an overpayment. See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable special tests and provisions requirements for the ADP System for SNAP. Effect: GovGuam is in noncompliance with applicable special tests and provisions requirements for the ADP System for SNAP. The reportable questioned cost is $27,273. Identification as a Repeat Finding: 2022-011 Government of Guam Schedule of Findings and Questioned Costs, continued 39 Finding No.: 2023-009, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Recommendation: GovGuam should closely monitor processes over the ADP System for SNAP so that the required filing and documentation of data inputted into the PHPro system are accurate and in accordance with applicable special tests and provisions requirements. Views of Responsible Officials: Agency disagrees with the finding. [Case Numbers 600020362, 300075627 and 300073890] Documentation was provided to auditor electronically on 09/03/2024. Additional documentation was provided in person on 11/15/2024 because the files were too large to send via email. [Case Number 201301439] The additional documentation related to the "processing of the household size of the applicant, resulting in an overpayment" was included in the files provided on 11/15/2024 to dispute this finding. Additional information was provided to explain. 201301439 - benefit amount is for a household size of 8 based on the renewal and change reports submitted during the certification period 3/1/2024-02/29/2024. Benefit amount indicated on the audit report says $312, which was not what was issued. Screenshots of this process was provided. 600020362 – The notice of action was provided and all other documents for this case. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan. Auditor Response: The documentation that was provided on 09/03/2024 and 11/15/2024 for Case Numbers 600020362, 300075627 and 300073890 did not contain the required Notice of Action. The additional documentation relative to Case Number 201301439 did not substantiate the use of eight as the household size for purposes of the SNAP allotment for FY 2023; the case file documentation demonstrates a household size of only seven. Also, the finding report amount of $312 represents the excess allotment between a household size of eight ($2,493) and a household size of seven ($2,181).

Finding No.: 2023-009 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Criteria: In accordance with applicable special tests and provisions requirements for the ADP system for SNAP, States must accurately and completely process and securely store all case file information for eligibility determination and benefit calculation. Condition: For four (or 10%) of forty case files tested, aggregating $27,292 of $151.9 million in total Program benefits, the data obtained from PHPro does not have files to substantiate all case file information that has been input in the system, including the certification period. Further, Case Number 201301439 incorrectly processed the household size of the applicant, resulting in an overpayment. See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable special tests and provisions requirements for the ADP System for SNAP. Effect: GovGuam is in noncompliance with applicable special tests and provisions requirements for the ADP System for SNAP. The reportable questioned cost is $27,273. Identification as a Repeat Finding: 2022-011 Government of Guam Schedule of Findings and Questioned Costs, continued 39 Finding No.: 2023-009, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Recommendation: GovGuam should closely monitor processes over the ADP System for SNAP so that the required filing and documentation of data inputted into the PHPro system are accurate and in accordance with applicable special tests and provisions requirements. Views of Responsible Officials: Agency disagrees with the finding. [Case Numbers 600020362, 300075627 and 300073890] Documentation was provided to auditor electronically on 09/03/2024. Additional documentation was provided in person on 11/15/2024 because the files were too large to send via email. [Case Number 201301439] The additional documentation related to the "processing of the household size of the applicant, resulting in an overpayment" was included in the files provided on 11/15/2024 to dispute this finding. Additional information was provided to explain. 201301439 - benefit amount is for a household size of 8 based on the renewal and change reports submitted during the certification period 3/1/2024-02/29/2024. Benefit amount indicated on the audit report says $312, which was not what was issued. Screenshots of this process was provided. 600020362 – The notice of action was provided and all other documents for this case. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan. Auditor Response: The documentation that was provided on 09/03/2024 and 11/15/2024 for Case Numbers 600020362, 300075627 and 300073890 did not contain the required Notice of Action. The additional documentation relative to Case Number 201301439 did not substantiate the use of eight as the household size for purposes of the SNAP allotment for FY 2023; the case file documentation demonstrates a household size of only seven. Also, the finding report amount of $312 represents the excess allotment between a household size of eight ($2,493) and a household size of seven ($2,181).

Finding No.: 2023-009 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Criteria: In accordance with applicable special tests and provisions requirements for the ADP system for SNAP, States must accurately and completely process and securely store all case file information for eligibility determination and benefit calculation. Condition: For four (or 10%) of forty case files tested, aggregating $27,292 of $151.9 million in total Program benefits, the data obtained from PHPro does not have files to substantiate all case file information that has been input in the system, including the certification period. Further, Case Number 201301439 incorrectly processed the household size of the applicant, resulting in an overpayment. See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable special tests and provisions requirements for the ADP System for SNAP. Effect: GovGuam is in noncompliance with applicable special tests and provisions requirements for the ADP System for SNAP. The reportable questioned cost is $27,273. Identification as a Repeat Finding: 2022-011 Government of Guam Schedule of Findings and Questioned Costs, continued 39 Finding No.: 2023-009, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Recommendation: GovGuam should closely monitor processes over the ADP System for SNAP so that the required filing and documentation of data inputted into the PHPro system are accurate and in accordance with applicable special tests and provisions requirements. Views of Responsible Officials: Agency disagrees with the finding. [Case Numbers 600020362, 300075627 and 300073890] Documentation was provided to auditor electronically on 09/03/2024. Additional documentation was provided in person on 11/15/2024 because the files were too large to send via email. [Case Number 201301439] The additional documentation related to the "processing of the household size of the applicant, resulting in an overpayment" was included in the files provided on 11/15/2024 to dispute this finding. Additional information was provided to explain. 201301439 - benefit amount is for a household size of 8 based on the renewal and change reports submitted during the certification period 3/1/2024-02/29/2024. Benefit amount indicated on the audit report says $312, which was not what was issued. Screenshots of this process was provided. 600020362 – The notice of action was provided and all other documents for this case. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan. Auditor Response: The documentation that was provided on 09/03/2024 and 11/15/2024 for Case Numbers 600020362, 300075627 and 300073890 did not contain the required Notice of Action. The additional documentation relative to Case Number 201301439 did not substantiate the use of eight as the household size for purposes of the SNAP allotment for FY 2023; the case file documentation demonstrates a household size of only seven. Also, the finding report amount of $312 represents the excess allotment between a household size of eight ($2,493) and a household size of seven ($2,181).

Finding No.: 2023-010 Federal Agency: U.S. Department of Commerce AL Program: 11.031 Broadband Infrastructure Program Federal Award No.: 66-08-I2208 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: Subawards are not reported in FSRS, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. GovGuam subsequently reported the required information in FSRS in October 2024. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable reporting requirements. Responsible personnel should review reported amounts for accuracy prior to submission. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Government of Guam Schedule of Findings and Questioned Costs, continued 41 Finding No.: 2023-010, continued Federal Agency: U.S. Department of Commerce AL Program: 11.031 Broadband Infrastructure Program Federal Award No.: 66-08-I2208 Area: Reporting Questioned Costs: $0 Views of Responsible Officials: The subrecipients were not listed in the FFATA Subaward Reporting System (FSRS). This was an oversight on our part and have corrected this action. The FSRS was updated to include the subrecipients to the Guam Department of Administration Guam Broadband Infrastructure Program (Federal Award ID Number 66-08-I2208). Moving forward, we will ensure to report first-tier subawards of $30,000 or more to the Federal funding Accountability and Transparency Act Subaward Reporting System. This has been remedied as the Agency did the reporting in FSRS in FY24.

Finding No.: 2023-011 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with the applicable equipment management requirements, grantees that acquire equipment with Federal funds are required to perform a physical inventory of the property and reconcile results with property records at least once every two years. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sale price of the property. In addition, adequate maintenance procedures must be established to keep the property in good condition. Condition: GovGuam’s most recent comprehensive physical inventory of its property was in January 2016; however, the required reconciliation was not completed. As of September 30, 2023, the required biannual physical inventory and reconciliation were not performed. We are unable to assess the overall cumulative monetary value of this deficiency. However, the table below summarizes the level of total capital outlays for the program over the past five years. See the Notes to the SEFA for chart/table. Cause: The processes over inventory, maintenance and reconciliation of capital assets are not routine. Government of Guam requires more funding and human resources to fully implement and develop a useful capital asset management system. Effect: GovGuam is in noncompliance with applicable equipment and real property management requirements. The underlying capital outlays are not considered questioned costs, as we are unable to quantify the extent of noncompliance. Government of Guam Schedule of Findings and Questioned Costs, continued 43 Finding No.: 2023-011, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Identification as a Repeat Finding: 2022-008 Recommendation: GovGuam should complete the required biannual physical inventory and reconciliations and should consider developing a more detailed corrective action plan with timetables for completing planned actions, such as processing required reconciliations and reports, training personnel and coordinating with other governmental units on property management requirements. Views of Responsible Officials: Implementation of a Fixed Assets Module as part of the new FMIS system is near completion which will help automate the tracking and reporting of capital assets. DOA will update the SOP for the Fixed Assets for capital asset reporting accordingly. In addition, the Agency will require all line agencies to designate a property manager to periodically track tagged assets on a revolving basis. Review of Assets acquired in FY2023 was completed, with FY2024 in progress. As noted previously, the process is hampered by difficulties in recruiting personnel.

Finding No.: 2023-012 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $515,384 Criteria: In accordance with applicable procurement and suspension and debarment requirements, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Government of Guam procurement regulations specify that every procurement shall be made by competitive sealed bidding, with certain exceptions, including the following: 1. The small purchases method applies to procurements less than $25,000 for supplies and services and less than $100,000 for construction, and procurement requirements shall not be artificially divided so as to constitute a small purchase. For small purchases, no less than three positive written quotations from businesses shall be solicited, recorded and placed in the procurement file. Awards shall be made to the lowest responsible and responsive bidder. 2. Sole source procurement is not permissible unless a requirement is available from only a single supplier. In cases of reasonable doubt, competition should be solicited. All procurement records shall be retained and disposed of in accordance with record retention guidelines and schedules approved by the Attorney General. Condition: Of 14 procurement transactions tested, aggregating $5.9 million of $9.2 million in total applicable non-payroll program expenditures, we noted the following: 1. For two (or 14%), no procurement file was provided. See the Notes to the SEFA for chart/table. 2. For two (or 14%), GovGuam paid vendor number M0098076 under Prior Reference number D230660529 on behalf of a subrecipient and did not retain documentation to ascertain that the subrecipient’s vendor selection complied with applicable procurement requirements. Subsequently, GovGuam provided procurement files obtained from the subrecipient; we noted noncompliance. Government of Guam Schedule of Findings and Questioned Costs, continued 45 Finding No.: 2023-012, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $515,384 Condition, continued: For PO Number 20224338, no written rationale is included in the procurement file as to why the lowest bidder was not selected. The lowest bidder quoted $154.28 per medical drug vial, and the selected bidder quoted $189.50, resulting in an excess quote of $35.22. GovGuam paid the vendor for 72 vials at the excess quote, resulting in a questioned cost of $2,536. For PO Number 20230055, the small purchases method was used; however, less than three informal price quotations are on file. The procurement of a medical drug includes four solicitations, to which three did not respond. The solicitations were emailed the morning of 10/04/2022 and required delivery within 24 hours. Given the ease of emailing capabilities and official social media platforms, other potential suppliers should have been solicited and given an opportunity to participate in the federally funded transaction. See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce compliance with applicable procurement requirements. Effect: GovGuam is in noncompliance with applicable procurement requirements. The reportable questioned cost is $515,384. Identification as a Repeat Finding: Finding 2022-013 Recommendation: Responsible procurement personnel should enforce compliance with applicable procurement requirements. Prior to making payments directly to a vendor on behalf of a subrecipient, responsible personnel should retain documentation that substantiates compliance with procurement requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 46 Finding No.: 2023-012, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $515,384 Views of Responsible Officials: Legal requirement was followed. In circumstances where less than 3 quotes are obtained, that is a market indication that further efforts to secure quotation will be unsuccessful.

Finding No.: 2023-013 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, amounts reported in SF-425 Federal Financial Report should be accurate. Condition: 1. For two (or 22%) of nine reports tested, the amounts reported in the SF-425 reports for the semi-annual reporting periods 12/31/2022 and 06/30/2023 did not agree with the underlying accounting records, as follows: See the Notes to the SEFA for chart/table. 2. For two (or 22%) of nine reports tested, the amounts reported in the SF-425 report for the semi- annual reporting period 12/31/2022 did not agree with the underlying accounting records, as follows: See the Notes to the SEFA for chart/table. Finding No.: 2023-013, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Reporting Questioned Costs: $0 Cause: GovGuam did not enforce monitoring controls over compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is presented as reported amounts do not represent Program overpayments. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain underlying accounting records to substantiate reported amounts. Views of responsible officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditure after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-014 Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, expenditures reported in quarterly reports should be supported by underlying accounting records. Condition: The expenditures reported in the quarterly reports differ from amounts recorded in AS400, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is reported because the variances do not represent overpayments. Identification as a Repeat Finding: Finding 2022-017 Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain underlying accounting records to substantiate reported amounts. Government of Guam Schedule of Findings and Questioned Costs, continued 50 Finding No.: 2023-014, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Reporting Questioned Costs: $0 Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditures after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-015 Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Eligibility Questioned Costs: $2,931 Criteria: In accordance with applicable eligibility requirements, HAF participants are required to maintain documentation to support eligibility determinations. Condition: For two (or 3%) of 60 transactions, aggregating $66,243 of $6.4 million in total Program benefits, no case file was provided. See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable eligibility requirements. GovGuam did not effectively maintain documentation to corroborate eligibility determinations. Case file documentation was misplaced due to the transfer of files to a new office. Effect: GovGuam is in noncompliance with applicable eligibility requirements. The reportable questioned cost is $2,931 because the projected questioned cost exceeds the threshold. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable eligibility requirements. Responsible personnel should ensure that all supporting case files are stored and properly maintained to substantiate eligibility determinations. Views of Responsible Officials: All documents were provided to HAF for client's eligibility for the program. However, due to a move, file was misplaced. Records Management SOPs will be updated to have all documentation stored electronically.

Finding No.: 2023-016 Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements expenditures reported in quarterly reports should be supported by underlying accounting records. Condition: The expenditures reported in the quarterly reports differ from amounts recorded in AS400, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is reported because the variances do not represent overpayments. Identification as a Repeat Finding: Finding 2022-020 Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain underlying accounting records to substantiate reported amounts. Government of Guam Schedule of Findings and Questioned Costs, continued 53 Finding No.: 2023-016, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Reporting Questioned Costs: $0 Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditures after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-017 Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Procurement and Suspension and Debarment Questioned Costs: $3,984,442 Criteria: In accordance with applicable procurement and suspension and debarment requirements, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Government of Guam procurement regulations specify that every procurement shall be made by competitive sealed bidding, with certain exceptions, including the following: 1. The small purchases method applies to procurements less than $25,000 for supplies and services and less than $100,000 for construction, and procurement requirements shall not be artificially divided so as to constitute a small purchase. For small purchases, no less than three positive written quotations from businesses shall be solicited, recorded and placed in the procurement file. 2. Sole source procurement is not permissible unless a requirement is available from only a single supplier. A requirement for a particular proprietary item does not justify a sole source procurement if there is more than one potential bidder or offeror for that item. In cases of reasonable doubt, competition should be solicited. All procurement records shall be retained and disposed of in accordance with record retention guidelines and schedules approved by the Attorney General. Condition: Of 60 procurement transactions, aggregating $21.5 million of $28.3 million in total applicable non- payroll program expenditures, we noted the following: 1. For one (or 2%), the small purchases method was used; however, less than three informal price quotations are on file. The procurement of miscellaneous mitigation and repairs of a public building includes three quotations, of which two indicate “no quote.” Given the ease of emailing capabilities and official social media platforms, other potential suppliers should have been solicited and given an opportunity to participate in the federally funded transaction. No questioned cost is presented as the procurement can be viewed as being technically compliant based on existing GovGuam procurement regulations and guidance from the Office of the Attorney General of Guam. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 55 Finding No.: 2023-017, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Procurement and Suspension and Debarment Questioned Costs: $3,984,442 Condition, continued: 2. For one (or 2%), documentation in the procurement file provides a justification for sole source procurement of a proprietary item, as well as informal solicitations of three other vendors who provided responses of “no quote.” Such rationale and documentation are insufficient to demonstrate that the required services were available from only a single supplier. Competitive sealed bidding procedures should have been used given the dollar value of the required services. See the Notes to the SEFA for chart/table. 3. For 10 (or 17%) no procurement file was provided. See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce compliance with applicable procurement requirements. Effect: GovGuam is in noncompliance with applicable procurement requirements. The reportable questioned cost is $3,984,442 from Conditions 2 and 3. Government of Guam Schedule of Findings and Questioned Costs, continued 56 Finding No.: 2023-017, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Procurement and Suspension and Debarment Questioned Costs: $3,984,442 Identification as a Repeat Finding: Finding 2022-022 Recommendation: Responsible procurement personnel should enforce compliance with applicable procurement requirements. Views of Responsible Officials: Procurement personnel will continue to enforce compliance with applicable procurement. A requirement of no less than three (3) price quotations to be on file, with evidence of solicitation from other potential suppliers to participate. In addition, a requirement for a "no quote" submission and to solicit from other potential suppliers should a "no quote" be received. It is our belief that we have followed the procurement process based on GAC Title 5 Chapter 5 §5213 for conditions 1 and 2. Condition 3, $3.35 million are not a cost in our books, as these costs are captured in GMHA's audit expenditures. Auditor Response: We obtained Condition 3 transactions from GovGuam’s financial management system expenditure details.

Finding No.: 2023-018 Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must: 1. Clearly identify to the subrecipient the award as a subaward by providing the ALN (Assistance Listings Number) and name. 2. Include the total amount provided to subrecipients from each Federal program. 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200, subpart F, met the audit requirements. Condition: For the year ended September 30, 2023, GovGuam reported $80.6 million in total program expenditures in the Schedule of Federal Awards (SEFA). A total of $28.3M represents amounts passed through to GovGuam line agencies and component units. Of this amount, approximately $847,464 represents payments for various programs administered by Guam Economic Development Authority (GEDA). Only $27.5 million was identified as amounts passed through to GovGuam line agencies and component units in the final SEFA, which did not include the amounts administered by GEDA. According to Executive Order No. 2021-22, dated September 7, 2021, “GEDA is appointed to serve as the Program processor for Guam, subject to continued monitoring and oversight by the Office of the Governor. The Administrator of GEDA shall serve as the official responsible for overseeing GEDA’s fulfillment of the Program, which includes the following items:…[(]i[)].. Implementing the Program, inclusive of drafting the application, standard operating procedures (SOP), and other relevant documentation. [(]ii.[)] Receiving and reviewing applications and submitting payment requests to the Department of Administration for disbursement to eligible small businesses.” Government of Guam Schedule of Findings and Questioned Costs, continued 58 Finding No.: 2023-018, continued Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Condition, continued: Similar language is documented in other executive orders, describing GEDA as the administrator of various programs funded by ALN 21.027 and describing GEDA’s responsibility to make eligibility determinations. Therefore, GEDA meets the definition of a subrecipient, and amounts administered by GEDA should be reported in the SEFA as amounts passed through to subrecipients. Cause: GovGuam did not properly identify amounts passed through to subrecipients and did not enforce compliance with applicable subrecipient monitoring requirements. The Department of Administration believes that GEDA is not a subrecipient. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. No questioned cost is reported because GEDA underwent a Single Audit for FY 2023. Identification as a Repeat Finding: Finding 2022-023 Recommendation: GovGuam should enforce compliance with applicable subrecipient monitoring requirements. Also, GovGuam should consider seeking guidance and confirmation from the Grantor Agency regarding the classification of GEDA as either a subrecipient or a contractor. Views of Responsible Officials: The Government continues to disagree with the auditor. The language of CFR 200.331(c) is clear that it is the judgment of the pass-through entity that is important. The auditor does not explain the reasoning for reaching a different opinion. Many jurisdictions have engaged third-party administrators for programs without concluding that they become sub-recipients. Government of Guam Schedule of Findings and Questioned Costs, continued 59 Finding No.: 2023-018, continued Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Auditor Response: The language of 2 CFR 200.331(c) is clear that “the pass-through entity must use judgement” and that “the substance of the relationship is more important than the form of the agreement.” The language of 2 CFR 200.331(a)(1) is also clear that a characteristic of a subrecipient is that the entity “Determines who is eligible to receive what Federal assistance.” The Condition sets forth our rationale.

Finding No.: 2023-019 Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable special reporting requirements, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: Subawards are not reported in FSRS, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor Program costs for compliance with applicable reporting requirements. Effect: GovGuam appears to be in noncompliance with applicable reporting requirements relative to special reporting for FFATA requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Views of Responsible Officials: An awardee could not report the required information in FSRS unless the federal awarding agency has registered the award. The US Treasury has not advised the Government that they have registered the Capital Projects Fund award.

Finding No.: 2023-020 Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Subrecipient Monitoring Questioned Costs: $0 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must: 1. Clearly identify to the subrecipient the award as a subaward by providing the ALN (Assistance Listings Number) and name. 2. Include the total amount provided to subrecipients from each Federal program. 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200, subpart F, met the audit requirements. Condition: For the sole subrecipient, Vendor Number U0226001, amounting to $759,030, we did not receive subaward documentation to substantiate communication of the subaward’s terms and conditions. Cause: GovGuam did not enforce monitoring controls over compliance with applicable subrecipient monitoring requirements. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. No questioned cost is presented as we are aware that Vendor Number U0226001 obtained a Single Audit for FY 2023. Recommendation: GovGuam should more closely monitor subrecipients in accordance with subrecipient monitoring requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 62 Finding No.: 2023-020, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Subrecipient Monitoring Questioned Costs: $0 Views of Responsible Officials: The agency followed the criteria stated in the finding. Improvements to monitoring controls have been implemented. Prior to the creating of any subrecipient account a copy of the FFATA report be attached, as well as, creating a check list of subrecipient monitoring requirements prior to any payments being made.

Finding No.: 2023-021 Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Government of Guam procurement regulations specify that every procurement shall be made by competitive sealed bidding, with certain exceptions, including the following: 1. The small purchases method applies to procurements less than $25,000 for supplies and services and less than $100,000 for construction, and procurement requirements shall not be artificially divided so as to constitute a small purchase. For small purchases, no less than three positive written quotations from businesses shall be solicited, recorded and placed in the procurement file. 2. Sole source procurement is not permissible unless a requirement is available from only a single supplier. In cases of reasonable doubt, competition should be solicited. All procurement records shall be retained and disposed of in accordance with record retention guidelines and schedules approved by the Attorney General. Condition: For three (or 5%) of 60 procurement transactions, aggregating $166,681 of $506,862 in total applicable non-payroll program expenditures, the small purchases method was used; however, less than three informal price quotations are on file. Given the ease of emailing capabilities and official social media platforms, other potential suppliers should have been solicited and given an opportunity to participate in the federally funded transaction. No questioned cost is presented as the procurement can be viewed as being technically compliant based on existing GovGuam procurement regulations and guidance from the Office of the Attorney General of Guam. Government of Guam Schedule of Findings and Questioned Costs, continued 64 Finding No.: 2023-021, continued Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Procurement and Suspension and Debarment Questioned Costs: $0 Condition, continued: 1. The procurement of preventative maintenance of laboratory equipment includes four quotations, of which three indicate “no quote.” 2. The procurement of laboratory/medical items includes five quotations, of which three indicate “no quote.” 3. The procurement of repair and maintenance of marine vessels includes four quotations, of which two indicate “no quote.” See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce compliance with applicable procurement requirements. Effect: GovGuam is in noncompliance with applicable procurement requirements. Recommendation: Responsible procurement personnel should enforce compliance with applicable procurement requirements. Views of Responsible Officials: Procurement process was followed based on GAC Title 5 Chapter 5 §5213.

Finding No.: 2023-022 Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Program Income Questioned Costs: $645,005 Criteria: In accordance with applicable Cooperative Agreement Programmatic Conditions for program income, all program income generated by the recipient must be added to the assistance award and must be used for the purposes and under the conditions of the award. Pursuant to 2 CFR 1500.7(b), the Addition method applies to the use of program income under the award. The recipient must maintain records which account for program income and specify how program income has been used. Condition: 1. We noted that FY 2023 program income (PI) records of Guam Environmental Protection Agency (GEPA) did not agree with underlying accounting records, as follows: See the Notes to the SEFA for chart/table. 2. No records were provided to specify the uses of excess program income. See the Notes to the SEFA for chart/table. Cause: GovGuam did not monitor compliance with applicable program income requirements. Effect: GovGuam is in noncompliance with applicable program income requirements. The reportable questioned cost is $645,005. Recommendation: Responsible personnel should review reported amounts for accuracy and completeness based on the underlying accounting records. Government of Guam Schedule of Findings and Questioned Costs, continued 66 Finding No.: 2023-022, continued Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Program Income Questioned Costs: $645,005 Views of Responsible Officials: Agency disagrees with the findings. The program income is not tied to assist or supplement the federal awards. The program income is used to supplement the special revenue funds handled by the department. Auditor Response: No documentation was provided to substantiate the use of $645,005 in program income.

Finding No.: 2023-023 Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, amounts reported in SF-425 Federal Financial Report should be accurate and complete. Condition: For the one SF-425 report tested, the amounts reported for the semi-annual reporting period ended 09/30/2023 did not agree with the underlying accounting records, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is presented as the reported amounts do not represent overpayments. Recommendation: GovGuam should enforce compliance with applicable reporting requirements. Responsible personnel should review reported amounts for accuracy prior to submission. Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditure after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. Government of Guam Schedule of Findings and Questioned Costs, continued 68 Finding No.: 2023-023, continued Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Reporting Questioned Costs: $0 Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-024 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425H Education Stabilization Fund–Governors (Outlying Areas) (ESF- Governor) Federal Award No.: COVID-19 S425H210004 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Criteria: In accordance with applicable matching, level of effort, earmarking requirements and section 18008 of the CARES Act, the State will maintain support for elementary and secondary education, and State support for higher education, at least at the proportional levels of such support relative to the State’s overall spending, averaged over fiscal years 2017, 2018, and 2019. Such average is defined as the baseline. Furthermore, a State must use the same data sources in determining overall State spending for the baseline years and FY 2023. Condition: The Government of Guam has not submitted final 2023 expenditure data for elementary/secondary education, higher education, and overall Outlying Area spending. Based on our reading of email communications from U.S. ED, Education Program Specialist, Insular Areas, in September 2024, we noted that U.S. ED is aware of such pending submission. Calculations using preliminary data appear to indicate that GovGuam’s maintenance of effort for FY 2023 may be deficient, as follows: See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 70 Finding No.: 2023-024, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425H Education Stabilization Fund–Governors (Outlying Areas) (ESF- Governor) Federal Award No.: COVID-19 S425H210004 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Cause: GovGuam did not enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Effect: GovGuam appears to be in noncompliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. No questioned cost is presented because the source data for determining overall State spending for the baseline years was the State’s Single Audit Reports, and the State’s Single Audit Report for FY 2023 is yet to be issued. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Responsible personnel should verify GovGuam’s overall spending levels. Views of Responsible Officials: The agency agrees with the findings and will apply the recommendations moving forward.

Finding No.: 2023-025 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425H Education Stabilization Fund–Governors (Outlying Areas) (ESF- Governor) Federal Award No.: COVID-19 S425H210004 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable special reporting requirements, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, amounts reported in FSRS should agree with the underlying accounting records. Condition: 1. Subawards are not reported in FSRS, as follows: See the Notes to the SEFA for chart/table. 2. For one (or 33%) of three reports tested, Guam Community College reported expenditures of $197,448 in USASpending.gov as opposed to $141,404 shown on the GEER I report submitted in FY2023. This resulted in a variance of $56,044. Cause: GovGuam did not effectively monitor compliance with applicable reporting requirements. Effect: GovGuam appears to be in noncompliance with applicable reporting requirements relative to special reporting for FFATA requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Government of Guam Schedule of Findings and Questioned Costs, continued 72 Finding No.: 2023-025, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425H Education Stabilization Fund–Governors (Outlying Areas) (ESF- Governor) Federal Award No.: COVID-19 S425H210004 Area: Reporting Questioned Costs: $0 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should review reported amounts for accuracy prior to submission. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Views of Responsible Officials: The agency followed the criteria stated in the finding. Improvements to monitoring controls have been implemented. Prior to the creating of any subrecipient account a copy of the FATA report be attached, as well as, creating a check list of subrecipient monitoring requirements prior to any payments being made.

Finding No.: 2023-028 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Criteria: In accordance with applicable matching, level of effort, earmarking requirements for the direct spending earmark, states and territories must spend not less than 70 percent of the Mandatory and federal and state share of Matching funds (Assistance Listing 93.596) to provide child care assistance to families who: (1) receive Temporary Assistance for Needy Families (TANF) assistance; (2) are attempting through work activities to transition off TANF; and (3) are at risk of becoming dependent on TANF (45 CFR section 98.50(e) and (f)). Condition: During FY 2023, expenditures recorded for ALN 93.596 do not appear to be for child care assistance to needy families. The Program expended approximately 61% for travel and 25% for supplies. Therefore, the required direct spending earmark is deficient, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Effect: GovGuam is in noncompliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark.. The reportable questioned cost is $62,726. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Prior to approving requisitions to be charged to ALN 93.596, responsible personnel should verify direct spending earmark levels. Government of Guam Schedule of Findings and Questioned Costs, continued 79 Finding No.: 2023-028, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward. However, the Matching Level of Effort (MOE) earmarking is not a requirement in accordance with the Supplemental Terms and Conditions for the Child Care Mandatory and Matching Funds of the Child Care & Development Fund's Cost Sharing or Matching (Non-Federal Share) of Program Funding, page 2. Item 6 identifies that a state match is not required while Item 8 identifies that the MOE threshold applies to states only.

Finding No.: 2023-028 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Criteria: In accordance with applicable matching, level of effort, earmarking requirements for the direct spending earmark, states and territories must spend not less than 70 percent of the Mandatory and federal and state share of Matching funds (Assistance Listing 93.596) to provide child care assistance to families who: (1) receive Temporary Assistance for Needy Families (TANF) assistance; (2) are attempting through work activities to transition off TANF; and (3) are at risk of becoming dependent on TANF (45 CFR section 98.50(e) and (f)). Condition: During FY 2023, expenditures recorded for ALN 93.596 do not appear to be for child care assistance to needy families. The Program expended approximately 61% for travel and 25% for supplies. Therefore, the required direct spending earmark is deficient, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Effect: GovGuam is in noncompliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark.. The reportable questioned cost is $62,726. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Prior to approving requisitions to be charged to ALN 93.596, responsible personnel should verify direct spending earmark levels. Government of Guam Schedule of Findings and Questioned Costs, continued 79 Finding No.: 2023-028, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward. However, the Matching Level of Effort (MOE) earmarking is not a requirement in accordance with the Supplemental Terms and Conditions for the Child Care Mandatory and Matching Funds of the Child Care & Development Fund's Cost Sharing or Matching (Non-Federal Share) of Program Funding, page 2. Item 6 identifies that a state match is not required while Item 8 identifies that the MOE threshold applies to states only.

Finding No.: 2023-028 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Criteria: In accordance with applicable matching, level of effort, earmarking requirements for the direct spending earmark, states and territories must spend not less than 70 percent of the Mandatory and federal and state share of Matching funds (Assistance Listing 93.596) to provide child care assistance to families who: (1) receive Temporary Assistance for Needy Families (TANF) assistance; (2) are attempting through work activities to transition off TANF; and (3) are at risk of becoming dependent on TANF (45 CFR section 98.50(e) and (f)). Condition: During FY 2023, expenditures recorded for ALN 93.596 do not appear to be for child care assistance to needy families. The Program expended approximately 61% for travel and 25% for supplies. Therefore, the required direct spending earmark is deficient, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Effect: GovGuam is in noncompliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark.. The reportable questioned cost is $62,726. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Prior to approving requisitions to be charged to ALN 93.596, responsible personnel should verify direct spending earmark levels. Government of Guam Schedule of Findings and Questioned Costs, continued 79 Finding No.: 2023-028, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward. However, the Matching Level of Effort (MOE) earmarking is not a requirement in accordance with the Supplemental Terms and Conditions for the Child Care Mandatory and Matching Funds of the Child Care & Development Fund's Cost Sharing or Matching (Non-Federal Share) of Program Funding, page 2. Item 6 identifies that a state match is not required while Item 8 identifies that the MOE threshold applies to states only.

Finding No.: 2023-029 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Area: Period of Performance Questioned Costs: $40,714 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GovGuam charged costs to a federal award after the period of performance obligation end date, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce monitoring controls over compliance with applicable period of performance requirements. Effect: GovGuam is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $40,714. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward.

Finding No.: 2023-029 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Area: Period of Performance Questioned Costs: $40,714 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GovGuam charged costs to a federal award after the period of performance obligation end date, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce monitoring controls over compliance with applicable period of performance requirements. Effect: GovGuam is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $40,714. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward.

Finding No.: 2023-029 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Area: Period of Performance Questioned Costs: $40,714 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GovGuam charged costs to a federal award after the period of performance obligation end date, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce monitoring controls over compliance with applicable period of performance requirements. Effect: GovGuam is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $40,714. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward.

Finding No.: 2023-030 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, ACF-696, Child Care and Development Fund Financial Report is due quarterly. Each fiscal year’s expenditure report must be separate; therefore, multiple reports are required if awards from more than one fiscal year are expended in a given quarter. Moreover, expenditures reported should be accurate and supported by underlying accounting records. Also, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: 1. Grant years 2019 through 2023 expenditures reported per ACF-696 are not accurately supported by underlying accounting records as follows: See the Notes to the SEFA for chart/table. 2. Subawards in the amount of $12,156,202 are not reported in FSRS. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 82 Finding No.: 2023-030, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Cause: GovGuam did not enforce monitoring controls over reconciliations and over compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is reported because we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: Finding 2022-030 Recommendation: GovGuam should enforce monitoring controls over compliance with reporting requirements. Responsible personnel should review underlying accounting records and perform reconciliation of the required reports. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditures after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. For condition 2, the Agency will report first-tier subawards to the FSRS system. However, it is noteworthy to mention that the system will be expiring as of March 2025. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-030 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, ACF-696, Child Care and Development Fund Financial Report is due quarterly. Each fiscal year’s expenditure report must be separate; therefore, multiple reports are required if awards from more than one fiscal year are expended in a given quarter. Moreover, expenditures reported should be accurate and supported by underlying accounting records. Also, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: 1. Grant years 2019 through 2023 expenditures reported per ACF-696 are not accurately supported by underlying accounting records as follows: See the Notes to the SEFA for chart/table. 2. Subawards in the amount of $12,156,202 are not reported in FSRS. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 82 Finding No.: 2023-030, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Cause: GovGuam did not enforce monitoring controls over reconciliations and over compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is reported because we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: Finding 2022-030 Recommendation: GovGuam should enforce monitoring controls over compliance with reporting requirements. Responsible personnel should review underlying accounting records and perform reconciliation of the required reports. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditures after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. For condition 2, the Agency will report first-tier subawards to the FSRS system. However, it is noteworthy to mention that the system will be expiring as of March 2025. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-030 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, ACF-696, Child Care and Development Fund Financial Report is due quarterly. Each fiscal year’s expenditure report must be separate; therefore, multiple reports are required if awards from more than one fiscal year are expended in a given quarter. Moreover, expenditures reported should be accurate and supported by underlying accounting records. Also, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: 1. Grant years 2019 through 2023 expenditures reported per ACF-696 are not accurately supported by underlying accounting records as follows: See the Notes to the SEFA for chart/table. 2. Subawards in the amount of $12,156,202 are not reported in FSRS. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 82 Finding No.: 2023-030, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Cause: GovGuam did not enforce monitoring controls over reconciliations and over compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is reported because we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: Finding 2022-030 Recommendation: GovGuam should enforce monitoring controls over compliance with reporting requirements. Responsible personnel should review underlying accounting records and perform reconciliation of the required reports. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditures after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. For condition 2, the Agency will report first-tier subawards to the FSRS system. However, it is noteworthy to mention that the system will be expiring as of March 2025. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-031 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200 (Uniform Guidance), subpart F, met the audit requirements for a Single Audit. Condition: Of 40 subrecipients tested, aggregating $18.1 million of $33.7 million in amounts passed through to subrecipients, we noted the following: 1. For 23 (or 58%), the CCDF Program did not perform monitoring activities to ensure subrecipients spent funds in accordance with the terms and conditions of the subaward. See the Notes to the SEFA for chart/table. 2. For one (or 3%), the CCDF Program passed through $831,500 to Vendor Number 8S767075 during FY 2023. CCDF did not perform monitoring activities to verify whether the subrecipient met the Single Audit requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 84 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Cause: GovGuam did not establish controls over compliance with applicable subrecipient monitoring requirements. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. The reportable questioned cost is $9,471,835. Recommendation: GovGuam should establish and implement controls over compliance with applicable subrecipient monitoring requirements. Responsible personnel should consider obtaining periodic reports from subrecipients that describe how subgrant funds were used and reviewing such reports for compliance with terms and conditions of the subaward. Views of Responsible Officials: The Agency disagrees with these findings. As per the Information Memorandum ARP Act Child Care Stabilization Funds under the Qualified and Eligible Child Care Providers, Provider Reporting and Monitoring, the ARP Act does not include specific reporting requirements for child care providers receiving subgrants and any subgrant reporting requirements are at the discretion of the lead agency, page 21. Additionally, Lead Agencies that use other governmental or non- governmental subrecipients to administer the program must have written agreements in place outlining roles and responsibilities for meeting CCDF requirements. The contents of the written agreement may vary based on the role the subrecipient is asked to assume or the type of product undertaken, but must include, at a minimum, tasks to be performed, a schedule for completing tasks, a budget which itemizes categorical expenditures, and indicators or measures to assess performance. The Lead Agency has fulfilled this requirement in accordance with 45 CFR section 98.1. Government of Guam Schedule of Findings and Questioned Costs, continued 85 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Auditor Response: The referenced Information Memorandum states, “At a minimum, lead agencies should collect the following information from child care providers receiving subgrants:…How funds were used….” No monitoring reports or other documentation was provided to substantiate the Agency’s monitoring and determination as to whether the subaward was used for authorized purposes, complied with the terms and conditions of the subaward, and achieved performance goals.

Finding No.: 2023-031 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200 (Uniform Guidance), subpart F, met the audit requirements for a Single Audit. Condition: Of 40 subrecipients tested, aggregating $18.1 million of $33.7 million in amounts passed through to subrecipients, we noted the following: 1. For 23 (or 58%), the CCDF Program did not perform monitoring activities to ensure subrecipients spent funds in accordance with the terms and conditions of the subaward. See the Notes to the SEFA for chart/table. 2. For one (or 3%), the CCDF Program passed through $831,500 to Vendor Number 8S767075 during FY 2023. CCDF did not perform monitoring activities to verify whether the subrecipient met the Single Audit requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 84 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Cause: GovGuam did not establish controls over compliance with applicable subrecipient monitoring requirements. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. The reportable questioned cost is $9,471,835. Recommendation: GovGuam should establish and implement controls over compliance with applicable subrecipient monitoring requirements. Responsible personnel should consider obtaining periodic reports from subrecipients that describe how subgrant funds were used and reviewing such reports for compliance with terms and conditions of the subaward. Views of Responsible Officials: The Agency disagrees with these findings. As per the Information Memorandum ARP Act Child Care Stabilization Funds under the Qualified and Eligible Child Care Providers, Provider Reporting and Monitoring, the ARP Act does not include specific reporting requirements for child care providers receiving subgrants and any subgrant reporting requirements are at the discretion of the lead agency, page 21. Additionally, Lead Agencies that use other governmental or non- governmental subrecipients to administer the program must have written agreements in place outlining roles and responsibilities for meeting CCDF requirements. The contents of the written agreement may vary based on the role the subrecipient is asked to assume or the type of product undertaken, but must include, at a minimum, tasks to be performed, a schedule for completing tasks, a budget which itemizes categorical expenditures, and indicators or measures to assess performance. The Lead Agency has fulfilled this requirement in accordance with 45 CFR section 98.1. Government of Guam Schedule of Findings and Questioned Costs, continued 85 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Auditor Response: The referenced Information Memorandum states, “At a minimum, lead agencies should collect the following information from child care providers receiving subgrants:…How funds were used….” No monitoring reports or other documentation was provided to substantiate the Agency’s monitoring and determination as to whether the subaward was used for authorized purposes, complied with the terms and conditions of the subaward, and achieved performance goals.

Finding No.: 2023-031 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200 (Uniform Guidance), subpart F, met the audit requirements for a Single Audit. Condition: Of 40 subrecipients tested, aggregating $18.1 million of $33.7 million in amounts passed through to subrecipients, we noted the following: 1. For 23 (or 58%), the CCDF Program did not perform monitoring activities to ensure subrecipients spent funds in accordance with the terms and conditions of the subaward. See the Notes to the SEFA for chart/table. 2. For one (or 3%), the CCDF Program passed through $831,500 to Vendor Number 8S767075 during FY 2023. CCDF did not perform monitoring activities to verify whether the subrecipient met the Single Audit requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 84 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Cause: GovGuam did not establish controls over compliance with applicable subrecipient monitoring requirements. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. The reportable questioned cost is $9,471,835. Recommendation: GovGuam should establish and implement controls over compliance with applicable subrecipient monitoring requirements. Responsible personnel should consider obtaining periodic reports from subrecipients that describe how subgrant funds were used and reviewing such reports for compliance with terms and conditions of the subaward. Views of Responsible Officials: The Agency disagrees with these findings. As per the Information Memorandum ARP Act Child Care Stabilization Funds under the Qualified and Eligible Child Care Providers, Provider Reporting and Monitoring, the ARP Act does not include specific reporting requirements for child care providers receiving subgrants and any subgrant reporting requirements are at the discretion of the lead agency, page 21. Additionally, Lead Agencies that use other governmental or non- governmental subrecipients to administer the program must have written agreements in place outlining roles and responsibilities for meeting CCDF requirements. The contents of the written agreement may vary based on the role the subrecipient is asked to assume or the type of product undertaken, but must include, at a minimum, tasks to be performed, a schedule for completing tasks, a budget which itemizes categorical expenditures, and indicators or measures to assess performance. The Lead Agency has fulfilled this requirement in accordance with 45 CFR section 98.1. Government of Guam Schedule of Findings and Questioned Costs, continued 85 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Auditor Response: The referenced Information Memorandum states, “At a minimum, lead agencies should collect the following information from child care providers receiving subgrants:…How funds were used….” No monitoring reports or other documentation was provided to substantiate the Agency’s monitoring and determination as to whether the subaward was used for authorized purposes, complied with the terms and conditions of the subaward, and achieved performance goals.

Finding No.: 2023-032 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and Safety Requirements Questioned Costs: $145,345 Criteria: In accordance with applicable special tests and provisions requirements, Lead Agencies must ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. In accordance with the Child Care Development Fund (CCDF) State Plan, Section 5.3 Health and Safety Standards and Training for CCDF Providers, all licensed and license-exempt child care providers must be able to demonstrate compliance with Guam Public Law 31-73, which outlines certain home/facility conditions, as part of the health and safety standards and other requirements prior to the receipt of any CCDF funds. Validations of these requirements are made by Guam Department of Public Health and Social Services (DPHSS) Licensing Office and DPHSS-Division of Environmental Health (DEH) during quarterly facility inspections and monitoring. A certification of compliance report of the Job-Site Inspection is issued by Division of Environmental Health and provided to Guam’s CCDF Program Office and Bureau of Social Services Administration (BOSSA) – Licensing Office. Additionally, all licensed and license-exempt child care providers must complete 15 hours of health and safety related training each year. Condition: Of 33 child care providers tested, aggregating $8.9 million of $14.2 million in Program benefits, we noted the following: 1. For four (or 12%), no DEH annual inspection report is on file for the child care provider who is exempt from licensing requirements. See the Notes to the SEFA for chart/table. 2. For all 33 child care providers, case file documentation is not sufficient to demonstrate that all relevant employees completed 15 hours of health and safety training. Government of Guam Schedule of Findings and Questioned Costs, continued 87 Finding No.: 2023-032, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and safety requirements Questioned Costs: $145,345 Cause: GovGuam did not effectively monitor license-exempt child care providers for compliance with applicable special tests and provisions for health and safety requirements. Effect: GovGuam is in noncompliance with applicable special tests and provisions for health and safety requirements. The reportable questioned cost is $145,345. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable special tests and provisions for health and safety requirements. Prior to approving an application for a subsidy, responsible personnel should verify that the identified child care provider has obtained a certification of compliance report from DPHSS-DEH accordingly. Views of Responsible Officials: The agency has issued notices of noncompliance to those unresponsive. Moving forward, the bureau will hold providers accountable by issuing a Letter of Warning (LOW) and a Correction Action Plan (CAP) from the Social Service Licensing Officer or Child Care Compliance Officer to ensure compliance with the standards. The Agency disagrees with Condition 1. License-exempt child care providers will not have an annual DEH inspection since they are not required to obtain a sanitary permit. Auditor Response: Condition 1: No other document was provided to substantiate compliance with applicable health and safety requirements.

Finding No.: 2023-032 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and Safety Requirements Questioned Costs: $145,345 Criteria: In accordance with applicable special tests and provisions requirements, Lead Agencies must ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. In accordance with the Child Care Development Fund (CCDF) State Plan, Section 5.3 Health and Safety Standards and Training for CCDF Providers, all licensed and license-exempt child care providers must be able to demonstrate compliance with Guam Public Law 31-73, which outlines certain home/facility conditions, as part of the health and safety standards and other requirements prior to the receipt of any CCDF funds. Validations of these requirements are made by Guam Department of Public Health and Social Services (DPHSS) Licensing Office and DPHSS-Division of Environmental Health (DEH) during quarterly facility inspections and monitoring. A certification of compliance report of the Job-Site Inspection is issued by Division of Environmental Health and provided to Guam’s CCDF Program Office and Bureau of Social Services Administration (BOSSA) – Licensing Office. Additionally, all licensed and license-exempt child care providers must complete 15 hours of health and safety related training each year. Condition: Of 33 child care providers tested, aggregating $8.9 million of $14.2 million in Program benefits, we noted the following: 1. For four (or 12%), no DEH annual inspection report is on file for the child care provider who is exempt from licensing requirements. See the Notes to the SEFA for chart/table. 2. For all 33 child care providers, case file documentation is not sufficient to demonstrate that all relevant employees completed 15 hours of health and safety training. Government of Guam Schedule of Findings and Questioned Costs, continued 87 Finding No.: 2023-032, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and safety requirements Questioned Costs: $145,345 Cause: GovGuam did not effectively monitor license-exempt child care providers for compliance with applicable special tests and provisions for health and safety requirements. Effect: GovGuam is in noncompliance with applicable special tests and provisions for health and safety requirements. The reportable questioned cost is $145,345. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable special tests and provisions for health and safety requirements. Prior to approving an application for a subsidy, responsible personnel should verify that the identified child care provider has obtained a certification of compliance report from DPHSS-DEH accordingly. Views of Responsible Officials: The agency has issued notices of noncompliance to those unresponsive. Moving forward, the bureau will hold providers accountable by issuing a Letter of Warning (LOW) and a Correction Action Plan (CAP) from the Social Service Licensing Officer or Child Care Compliance Officer to ensure compliance with the standards. The Agency disagrees with Condition 1. License-exempt child care providers will not have an annual DEH inspection since they are not required to obtain a sanitary permit. Auditor Response: Condition 1: No other document was provided to substantiate compliance with applicable health and safety requirements.

Finding No.: 2023-032 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and Safety Requirements Questioned Costs: $145,345 Criteria: In accordance with applicable special tests and provisions requirements, Lead Agencies must ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. In accordance with the Child Care Development Fund (CCDF) State Plan, Section 5.3 Health and Safety Standards and Training for CCDF Providers, all licensed and license-exempt child care providers must be able to demonstrate compliance with Guam Public Law 31-73, which outlines certain home/facility conditions, as part of the health and safety standards and other requirements prior to the receipt of any CCDF funds. Validations of these requirements are made by Guam Department of Public Health and Social Services (DPHSS) Licensing Office and DPHSS-Division of Environmental Health (DEH) during quarterly facility inspections and monitoring. A certification of compliance report of the Job-Site Inspection is issued by Division of Environmental Health and provided to Guam’s CCDF Program Office and Bureau of Social Services Administration (BOSSA) – Licensing Office. Additionally, all licensed and license-exempt child care providers must complete 15 hours of health and safety related training each year. Condition: Of 33 child care providers tested, aggregating $8.9 million of $14.2 million in Program benefits, we noted the following: 1. For four (or 12%), no DEH annual inspection report is on file for the child care provider who is exempt from licensing requirements. See the Notes to the SEFA for chart/table. 2. For all 33 child care providers, case file documentation is not sufficient to demonstrate that all relevant employees completed 15 hours of health and safety training. Government of Guam Schedule of Findings and Questioned Costs, continued 87 Finding No.: 2023-032, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and safety requirements Questioned Costs: $145,345 Cause: GovGuam did not effectively monitor license-exempt child care providers for compliance with applicable special tests and provisions for health and safety requirements. Effect: GovGuam is in noncompliance with applicable special tests and provisions for health and safety requirements. The reportable questioned cost is $145,345. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable special tests and provisions for health and safety requirements. Prior to approving an application for a subsidy, responsible personnel should verify that the identified child care provider has obtained a certification of compliance report from DPHSS-DEH accordingly. Views of Responsible Officials: The agency has issued notices of noncompliance to those unresponsive. Moving forward, the bureau will hold providers accountable by issuing a Letter of Warning (LOW) and a Correction Action Plan (CAP) from the Social Service Licensing Officer or Child Care Compliance Officer to ensure compliance with the standards. The Agency disagrees with Condition 1. License-exempt child care providers will not have an annual DEH inspection since they are not required to obtain a sanitary permit. Auditor Response: Condition 1: No other document was provided to substantiate compliance with applicable health and safety requirements.

Finding No.: 2023-033 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.778 Medical Assistance Program Federal Award No.: 75X0512 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, amounts reported in CMS-64, Quarterly Statement of Expenditures for the Medical Assistance Program, should be supported by underlying accounting records. Condition: Reported expenditures are not supported by underlying accounting records, resulting in underreporting, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce monitoring controls over reconciliations and over compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is presented as reported expenditures represent allowable costs. Identification as a Repeat Finding: Finding 2022-032 Recommendation: GovGuam should enforce monitoring controls over compliance with reporting requirements. Responsible personnel should review underlying accounting records, perform reconciliations and retain such documents to substantiate reported amounts. Responsible personnel should also coordinate with the centralized accounting division to identify changes and adjust the CMS-64 reports or underlying records accordingly prior to the submission of the CMS-64 reports. Government of Guam Schedule of Findings and Questioned Costs, continued 89 Finding No.: 2023-033, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.778 Medical Assistance Program Federal Award No.: 75X0512 Area: Reporting Questioned Costs: $0 Views of Responsible Officials: The Agency acknowledges this finding and recognizes it as an ongoing issue related to the alignment of our reporting with the Department of Administration (DOA) financial system. One of the primary challenges arises from transactions that are not processed within the designated reporting period, which impacts on our initial submissions to CMS. Any adjustments or transactions made after the quarter's close, which were not captured in our previous reports, contribute to this issue. We understand that addressing this finding is a critical part of our corrective action measures. We are currently working on updating the existing Standard Operating Procedure (SOP) 2023-01, which governs interactions between the Department of Public Health and Social Services (DPHSS) and DOA/Division of Accounts. Since November 2024, we have been collaborating with DOA to revise this SOP with the goal of reconciling Medicaid and CHIP expenditures, as well as aligning reports from CMS-64 with the new Guam Financial Management Information System (GFMIS). Currently, PMS staff is in the process in finalizing the DRAFT SOP. We intend to have the DRAFT SOP completed and forwarded to DOA by Friday, January 31, 2025. If there are no changes to the SOP, we will work to have the SOP signed by all parties no later than February 14, 2025.

Finding No.: 2023-034 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.778 Medical Assistance Program Federal Award No.: 75X0512 Area: Special Tests and Provisions – Refunding of Federal Share of Medicaid Overpayments to Providers Questioned Costs: $121,735 Criteria: In accordance with applicable special tests and provisions requirements relative to overpayments made to providers, states have up to one year from the date of discovery of the overpayment to recover or attempt to recover the overpayment before the federal share must be refunded to the federal Centers for Medicare & Medicaid Services (CMS) via Form CMS-64 Summary, Line 9C1 – Fraud, Waste & Abuse Amounts, Line 9.C2-OIG Complaint False Claims Act, 9.D Other, 9.E. – RAC Collections, 9.F. – PERM Collections or 9.G. – MEQC Collections regardless of whether recovery is made from the provider. The state must credit the federal share to CMS either in the quarter in which the recovery is made or in the quarter in which the one-year period ends following discovery, whichever is earlier. Condition: During FY 2023, the Program reported overpayments to and recoupments from providers of $138,367 and $233,958, respectively. The schedule of overpayments and recoupment were not in sufficient detail to identify the discovery date. Therefore, it cannot be determined whether Federal share of overpayments is properly reported and refunded. Cause: GovGuam did not effectively monitor compliance with applicable special tests and provisions requirements relative to the refunding of overpayments made to providers. Effect: GovGuam is in noncompliance with applicable special tests and provisions requirements relative to the refunding of overpayments made to providers. The reportable questioned cost is $121,735 ($138,367 * 87.98% average FMAP). Identification as a Repeat Finding: Finding 2022-033 Government of Guam Schedule of Findings and Questioned Costs, continued 91 Finding No.: 2023-034, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.778 Medical Assistance Program Federal Award No.: 75X0512 Area: Special Tests and Provisions – Refunding of Federal Share of Medicaid Overpayments to Providers Questioned Costs: $121,735 Recommendation: GovGuam should monitor compliance with applicable special tests and provisions requirements relative to the refunding of overpayments made to providers. Responsible personnel should prepare a schedule of overpayments to and recoupments from providers in sufficient detail to identify discovery dates of overpayments and to report the Federal share of overpayments on Form CMS- 64 quarterly. Views of Responsible Officials: The Agency acknowledges this finding and has developed a corrective action plan that includes a new Standard Operating Procedure (SOP), 2024-005, for the Intake and Processing of Overpayment Checks. This new SOP addresses a gap in our process for tracking overpayment checks and refunding the Federal Share of Medicaid Overpayments to Providers. Furthermore, we are also in the process of updating SOP 2023-03, which focuses on Public Health Professional (PHPro) Entry for Provider Overpayment Checks and Recoupments, to improve our tracking and monitoring of overpayment checks and recoupment reconciliations. Currently, we are still addressing updates to this SOP and require additional time to work with BHCFA staff(s) to gather more information in finalizing the SOP. We intend to complete this SOP no later than February 28, 2025.

Finding No.: 2023-026 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with the applicable equipment management requirements, grantees that acquire equipment with Federal funds are required to perform a physical inventory of the property and reconcile results with property records at least once every two years. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sale price of the property. In addition, adequate maintenance procedures must be established to keep the property in good condition. Condition: GovGuam’s most recent comprehensive physical inventory of its property was in January 2016; however, the required reconciliation was not completed. As of September 30, 2023, the required biannual physical inventory and reconciliation were not performed. We are unable to assess the overall cumulative monetary value of this deficiency. However, the table below summarizes the level of total capital outlays for the program over the past five years. See the Notes to the SEFA for chart/table. Cause: The processes over inventory, maintenance and reconciliation of capital assets are not routine. Government of Guam requires more funding and human resources to fully implement and develop a useful capital asset management system. Effect: GovGuam is in noncompliance with applicable equipment and real property management requirements. The underlying capital outlays are not considered questioned costs, as we are unable to quantify the extent of noncompliance. Government of Guam Schedule of Findings and Questioned Costs, continued 74 Finding No.: 2023-026, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Identification as a Repeat Finding: 2022-008 Recommendation: GovGuam should complete the required biannual physical inventory and reconciliations and should consider developing a more detailed corrective action plan with timetables for completing planned actions, such as processing required reconciliations and reports, training personnel and coordinating with other governmental units on property management requirements. Views of Responsible Officials: Implementation of a Fixed Assets Module as part of the new FMIS system is near completion which will help automate the tracking and reporting of capital assets. DOA will update the SOP for the Fixed Assets for capital asset reporting accordingly. In addition, the Agency will require all line agencies to designate a property manager to periodically track tagged assets on a revolving basis. Review of Assets acquired in FY2023 was completed, with FY2024 in progress. As noted previously, the process is hampered by difficulties in recruiting personnel.

Finding No.: 2023-026 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with the applicable equipment management requirements, grantees that acquire equipment with Federal funds are required to perform a physical inventory of the property and reconcile results with property records at least once every two years. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sale price of the property. In addition, adequate maintenance procedures must be established to keep the property in good condition. Condition: GovGuam’s most recent comprehensive physical inventory of its property was in January 2016; however, the required reconciliation was not completed. As of September 30, 2023, the required biannual physical inventory and reconciliation were not performed. We are unable to assess the overall cumulative monetary value of this deficiency. However, the table below summarizes the level of total capital outlays for the program over the past five years. See the Notes to the SEFA for chart/table. Cause: The processes over inventory, maintenance and reconciliation of capital assets are not routine. Government of Guam requires more funding and human resources to fully implement and develop a useful capital asset management system. Effect: GovGuam is in noncompliance with applicable equipment and real property management requirements. The underlying capital outlays are not considered questioned costs, as we are unable to quantify the extent of noncompliance. Government of Guam Schedule of Findings and Questioned Costs, continued 74 Finding No.: 2023-026, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Identification as a Repeat Finding: 2022-008 Recommendation: GovGuam should complete the required biannual physical inventory and reconciliations and should consider developing a more detailed corrective action plan with timetables for completing planned actions, such as processing required reconciliations and reports, training personnel and coordinating with other governmental units on property management requirements. Views of Responsible Officials: Implementation of a Fixed Assets Module as part of the new FMIS system is near completion which will help automate the tracking and reporting of capital assets. DOA will update the SOP for the Fixed Assets for capital asset reporting accordingly. In addition, the Agency will require all line agencies to designate a property manager to periodically track tagged assets on a revolving basis. Review of Assets acquired in FY2023 was completed, with FY2024 in progress. As noted previously, the process is hampered by difficulties in recruiting personnel.

Finding No.: 2023-027 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Criteria: In accordance with applicable procurement and suspension and debarment requirements, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Government of Guam procurement regulations specify that every procurement shall be made by competitive sealed bidding, with certain exceptions, including the following: 1. The small purchases method applies to procurements less than $25,000 for supplies and services and less than $100,000 for construction, and procurement requirements shall not be artificially divided so as to constitute a small purchase. For small purchases, no less than three positive written quotations from businesses shall be solicited, recorded and placed in the procurement file. 2. Sole source procurement is not permissible unless a requirement is available from only a single supplier. A requirement for a particular proprietary item does not justify a sole source procurement if there is more than one potential bidder or offeror for that item. In cases of reasonable doubt, competition should be solicited. All procurement records shall be retained and disposed of in accordance with record retention guidelines and schedules approved by the Attorney General. Condition: Of 60 procurement transactions, aggregating $2.3 million of $3.5 million in total applicable non- payroll Program costs, we noted the following: COVID-19: 1. For two (or 3%), the small purchases method was used; however, less than three informal price quotations are on file. Given the ease of emailing capabilities and official social media platforms, other potential suppliers should have been solicited and given an opportunity to participate in the federally funded transaction. No questioned cost is presented as the procurement can be viewed as being technically compliant based on existing GovGuam procurement regulations and guidance from the Office of the Attorney General of Guam. Government of Guam Schedule of Findings and Questioned Costs, continued 76 Finding No.: 2023-027, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Condition, continued: a. The procurement of medical waste services includes five quotations, of which three indicate “no quote.” b. The procurement of computers includes six quotations, of which four indicate “no quote.” See the Notes to the SEFA for chart/table. COVID-19: 2. For five (or 8%), no procurement file was provided. The documentation that was provided pertained to payments of invoices and not the process of soliciting and selecting the vendor. See the Notes to the SEFA for chart/table. 3. For four (or 7%), documentation in the procurement file is insufficient to demonstrate compliance with sole source procurement. The language of the sole source justification indicates that the supply or service is available from more than one business. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 77 Finding No.: 2023-027, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Cause: GovGuam did not enforce compliance with applicable procurement requirements. Effect: GovGuam is in noncompliance with applicable procurement requirements. The reportable questioned cost is $477,823 from Conditions 2 and 3. Identification as a Repeat Finding: Finding 2022-025 Recommendation: Responsible procurement personnel should enforce compliance with applicable procurement requirements. Views of Responsible Officials: For condition 1, the procurement process was followed based on GAC Title 5 Chapter 5 §5213. For condition 2, the lease was procured by DOA. For condition 3, auditor to provide clarification regarding insufficiency of documentation.

Finding No.: 2023-027 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Criteria: In accordance with applicable procurement and suspension and debarment requirements, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Government of Guam procurement regulations specify that every procurement shall be made by competitive sealed bidding, with certain exceptions, including the following: 1. The small purchases method applies to procurements less than $25,000 for supplies and services and less than $100,000 for construction, and procurement requirements shall not be artificially divided so as to constitute a small purchase. For small purchases, no less than three positive written quotations from businesses shall be solicited, recorded and placed in the procurement file. 2. Sole source procurement is not permissible unless a requirement is available from only a single supplier. A requirement for a particular proprietary item does not justify a sole source procurement if there is more than one potential bidder or offeror for that item. In cases of reasonable doubt, competition should be solicited. All procurement records shall be retained and disposed of in accordance with record retention guidelines and schedules approved by the Attorney General. Condition: Of 60 procurement transactions, aggregating $2.3 million of $3.5 million in total applicable non- payroll Program costs, we noted the following: COVID-19: 1. For two (or 3%), the small purchases method was used; however, less than three informal price quotations are on file. Given the ease of emailing capabilities and official social media platforms, other potential suppliers should have been solicited and given an opportunity to participate in the federally funded transaction. No questioned cost is presented as the procurement can be viewed as being technically compliant based on existing GovGuam procurement regulations and guidance from the Office of the Attorney General of Guam. Government of Guam Schedule of Findings and Questioned Costs, continued 76 Finding No.: 2023-027, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Condition, continued: a. The procurement of medical waste services includes five quotations, of which three indicate “no quote.” b. The procurement of computers includes six quotations, of which four indicate “no quote.” See the Notes to the SEFA for chart/table. COVID-19: 2. For five (or 8%), no procurement file was provided. The documentation that was provided pertained to payments of invoices and not the process of soliciting and selecting the vendor. See the Notes to the SEFA for chart/table. 3. For four (or 7%), documentation in the procurement file is insufficient to demonstrate compliance with sole source procurement. The language of the sole source justification indicates that the supply or service is available from more than one business. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 77 Finding No.: 2023-027, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Cause: GovGuam did not enforce compliance with applicable procurement requirements. Effect: GovGuam is in noncompliance with applicable procurement requirements. The reportable questioned cost is $477,823 from Conditions 2 and 3. Identification as a Repeat Finding: Finding 2022-025 Recommendation: Responsible procurement personnel should enforce compliance with applicable procurement requirements. Views of Responsible Officials: For condition 1, the procurement process was followed based on GAC Title 5 Chapter 5 §5213. For condition 2, the lease was procured by DOA. For condition 3, auditor to provide clarification regarding insufficiency of documentation.

Finding No.: 2023-008 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Criteria: In accordance with applicable quality control and program integrity requirements relative to D- SNAP, Guam Department of Public Health and Social Services, Bureau of Economic Security (BES), will perform the following: 1. Review 100 percent of all applications from permanent and temporary government employees. These results must be included in the Post-Disaster Report. 2. Conduct individual case reviews (public and employee cases) to ensure D-SNAP eligibility and allotments were correctly determined. Condition: 1. BES neither identified applications from government employees nor reviewed 100% of all applications from government employees, and therefore, the results are not included in the Post-Disaster Report. 2. No documentation was provided to substantiate that BES conducted the required individual case reviews. Cause: GovGuam did not effectively monitor compliance with applicable D-SNAP quality control and program integrity requirements given the high volume of applications and limited staffing. Effect: GovGuam is in noncompliance with applicable D-SNAP quality control and program integrity requirements. No questioned cost is reported as we are unable to quantify the extent of noncompliance. Recommendation: Responsible personnel should perform the required verifications and reviews in accordance with applicable quality control and program integrity requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 37 Finding No.: 2023-008, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Views of Responsible Officials: We agree with this finding. Due to the overwhelming volume of applications, it was difficult to determine and review 100% of applications. The current application does not specify, whether the applicant or a household member is a government employee. The goal was to service as many people as possible in a very short time frame. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan.

Finding No.: 2023-008 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Criteria: In accordance with applicable quality control and program integrity requirements relative to D- SNAP, Guam Department of Public Health and Social Services, Bureau of Economic Security (BES), will perform the following: 1. Review 100 percent of all applications from permanent and temporary government employees. These results must be included in the Post-Disaster Report. 2. Conduct individual case reviews (public and employee cases) to ensure D-SNAP eligibility and allotments were correctly determined. Condition: 1. BES neither identified applications from government employees nor reviewed 100% of all applications from government employees, and therefore, the results are not included in the Post-Disaster Report. 2. No documentation was provided to substantiate that BES conducted the required individual case reviews. Cause: GovGuam did not effectively monitor compliance with applicable D-SNAP quality control and program integrity requirements given the high volume of applications and limited staffing. Effect: GovGuam is in noncompliance with applicable D-SNAP quality control and program integrity requirements. No questioned cost is reported as we are unable to quantify the extent of noncompliance. Recommendation: Responsible personnel should perform the required verifications and reviews in accordance with applicable quality control and program integrity requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 37 Finding No.: 2023-008, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Views of Responsible Officials: We agree with this finding. Due to the overwhelming volume of applications, it was difficult to determine and review 100% of applications. The current application does not specify, whether the applicant or a household member is a government employee. The goal was to service as many people as possible in a very short time frame. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan.

Finding No.: 2023-008 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Criteria: In accordance with applicable quality control and program integrity requirements relative to D- SNAP, Guam Department of Public Health and Social Services, Bureau of Economic Security (BES), will perform the following: 1. Review 100 percent of all applications from permanent and temporary government employees. These results must be included in the Post-Disaster Report. 2. Conduct individual case reviews (public and employee cases) to ensure D-SNAP eligibility and allotments were correctly determined. Condition: 1. BES neither identified applications from government employees nor reviewed 100% of all applications from government employees, and therefore, the results are not included in the Post-Disaster Report. 2. No documentation was provided to substantiate that BES conducted the required individual case reviews. Cause: GovGuam did not effectively monitor compliance with applicable D-SNAP quality control and program integrity requirements given the high volume of applications and limited staffing. Effect: GovGuam is in noncompliance with applicable D-SNAP quality control and program integrity requirements. No questioned cost is reported as we are unable to quantify the extent of noncompliance. Recommendation: Responsible personnel should perform the required verifications and reviews in accordance with applicable quality control and program integrity requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 37 Finding No.: 2023-008, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 Disaster Supplemental Nutrition Assistance Program (D-SNAP) Area: Special Tests and Provisions - Quality Control and Program Integrity Questioned Costs: $0 Views of Responsible Officials: We agree with this finding. Due to the overwhelming volume of applications, it was difficult to determine and review 100% of applications. The current application does not specify, whether the applicant or a household member is a government employee. The goal was to service as many people as possible in a very short time frame. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan.

Finding No.: 2023-009 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Criteria: In accordance with applicable special tests and provisions requirements for the ADP system for SNAP, States must accurately and completely process and securely store all case file information for eligibility determination and benefit calculation. Condition: For four (or 10%) of forty case files tested, aggregating $27,292 of $151.9 million in total Program benefits, the data obtained from PHPro does not have files to substantiate all case file information that has been input in the system, including the certification period. Further, Case Number 201301439 incorrectly processed the household size of the applicant, resulting in an overpayment. See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable special tests and provisions requirements for the ADP System for SNAP. Effect: GovGuam is in noncompliance with applicable special tests and provisions requirements for the ADP System for SNAP. The reportable questioned cost is $27,273. Identification as a Repeat Finding: 2022-011 Government of Guam Schedule of Findings and Questioned Costs, continued 39 Finding No.: 2023-009, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Recommendation: GovGuam should closely monitor processes over the ADP System for SNAP so that the required filing and documentation of data inputted into the PHPro system are accurate and in accordance with applicable special tests and provisions requirements. Views of Responsible Officials: Agency disagrees with the finding. [Case Numbers 600020362, 300075627 and 300073890] Documentation was provided to auditor electronically on 09/03/2024. Additional documentation was provided in person on 11/15/2024 because the files were too large to send via email. [Case Number 201301439] The additional documentation related to the "processing of the household size of the applicant, resulting in an overpayment" was included in the files provided on 11/15/2024 to dispute this finding. Additional information was provided to explain. 201301439 - benefit amount is for a household size of 8 based on the renewal and change reports submitted during the certification period 3/1/2024-02/29/2024. Benefit amount indicated on the audit report says $312, which was not what was issued. Screenshots of this process was provided. 600020362 – The notice of action was provided and all other documents for this case. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan. Auditor Response: The documentation that was provided on 09/03/2024 and 11/15/2024 for Case Numbers 600020362, 300075627 and 300073890 did not contain the required Notice of Action. The additional documentation relative to Case Number 201301439 did not substantiate the use of eight as the household size for purposes of the SNAP allotment for FY 2023; the case file documentation demonstrates a household size of only seven. Also, the finding report amount of $312 represents the excess allotment between a household size of eight ($2,493) and a household size of seven ($2,181).

Finding No.: 2023-009 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Criteria: In accordance with applicable special tests and provisions requirements for the ADP system for SNAP, States must accurately and completely process and securely store all case file information for eligibility determination and benefit calculation. Condition: For four (or 10%) of forty case files tested, aggregating $27,292 of $151.9 million in total Program benefits, the data obtained from PHPro does not have files to substantiate all case file information that has been input in the system, including the certification period. Further, Case Number 201301439 incorrectly processed the household size of the applicant, resulting in an overpayment. See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable special tests and provisions requirements for the ADP System for SNAP. Effect: GovGuam is in noncompliance with applicable special tests and provisions requirements for the ADP System for SNAP. The reportable questioned cost is $27,273. Identification as a Repeat Finding: 2022-011 Government of Guam Schedule of Findings and Questioned Costs, continued 39 Finding No.: 2023-009, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Recommendation: GovGuam should closely monitor processes over the ADP System for SNAP so that the required filing and documentation of data inputted into the PHPro system are accurate and in accordance with applicable special tests and provisions requirements. Views of Responsible Officials: Agency disagrees with the finding. [Case Numbers 600020362, 300075627 and 300073890] Documentation was provided to auditor electronically on 09/03/2024. Additional documentation was provided in person on 11/15/2024 because the files were too large to send via email. [Case Number 201301439] The additional documentation related to the "processing of the household size of the applicant, resulting in an overpayment" was included in the files provided on 11/15/2024 to dispute this finding. Additional information was provided to explain. 201301439 - benefit amount is for a household size of 8 based on the renewal and change reports submitted during the certification period 3/1/2024-02/29/2024. Benefit amount indicated on the audit report says $312, which was not what was issued. Screenshots of this process was provided. 600020362 – The notice of action was provided and all other documents for this case. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan. Auditor Response: The documentation that was provided on 09/03/2024 and 11/15/2024 for Case Numbers 600020362, 300075627 and 300073890 did not contain the required Notice of Action. The additional documentation relative to Case Number 201301439 did not substantiate the use of eight as the household size for purposes of the SNAP allotment for FY 2023; the case file documentation demonstrates a household size of only seven. Also, the finding report amount of $312 represents the excess allotment between a household size of eight ($2,493) and a household size of seven ($2,181).

Finding No.: 2023-009 Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Criteria: In accordance with applicable special tests and provisions requirements for the ADP system for SNAP, States must accurately and completely process and securely store all case file information for eligibility determination and benefit calculation. Condition: For four (or 10%) of forty case files tested, aggregating $27,292 of $151.9 million in total Program benefits, the data obtained from PHPro does not have files to substantiate all case file information that has been input in the system, including the certification period. Further, Case Number 201301439 incorrectly processed the household size of the applicant, resulting in an overpayment. See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable special tests and provisions requirements for the ADP System for SNAP. Effect: GovGuam is in noncompliance with applicable special tests and provisions requirements for the ADP System for SNAP. The reportable questioned cost is $27,273. Identification as a Repeat Finding: 2022-011 Government of Guam Schedule of Findings and Questioned Costs, continued 39 Finding No.: 2023-009, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.551/10.561 SNAP Cluster Federal Award No.: 2023 7GU400GU4 Area: Special Tests and Provisions – ADP System for SNAP Questioned Costs: $27,273 Recommendation: GovGuam should closely monitor processes over the ADP System for SNAP so that the required filing and documentation of data inputted into the PHPro system are accurate and in accordance with applicable special tests and provisions requirements. Views of Responsible Officials: Agency disagrees with the finding. [Case Numbers 600020362, 300075627 and 300073890] Documentation was provided to auditor electronically on 09/03/2024. Additional documentation was provided in person on 11/15/2024 because the files were too large to send via email. [Case Number 201301439] The additional documentation related to the "processing of the household size of the applicant, resulting in an overpayment" was included in the files provided on 11/15/2024 to dispute this finding. Additional information was provided to explain. 201301439 - benefit amount is for a household size of 8 based on the renewal and change reports submitted during the certification period 3/1/2024-02/29/2024. Benefit amount indicated on the audit report says $312, which was not what was issued. Screenshots of this process was provided. 600020362 – The notice of action was provided and all other documents for this case. Details of corrective actions and target dates are set forth in GovGuam’s Corrective Action Plan. Auditor Response: The documentation that was provided on 09/03/2024 and 11/15/2024 for Case Numbers 600020362, 300075627 and 300073890 did not contain the required Notice of Action. The additional documentation relative to Case Number 201301439 did not substantiate the use of eight as the household size for purposes of the SNAP allotment for FY 2023; the case file documentation demonstrates a household size of only seven. Also, the finding report amount of $312 represents the excess allotment between a household size of eight ($2,493) and a household size of seven ($2,181).

Finding No.: 2023-010 Federal Agency: U.S. Department of Commerce AL Program: 11.031 Broadband Infrastructure Program Federal Award No.: 66-08-I2208 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: Subawards are not reported in FSRS, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. GovGuam subsequently reported the required information in FSRS in October 2024. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable reporting requirements. Responsible personnel should review reported amounts for accuracy prior to submission. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Government of Guam Schedule of Findings and Questioned Costs, continued 41 Finding No.: 2023-010, continued Federal Agency: U.S. Department of Commerce AL Program: 11.031 Broadband Infrastructure Program Federal Award No.: 66-08-I2208 Area: Reporting Questioned Costs: $0 Views of Responsible Officials: The subrecipients were not listed in the FFATA Subaward Reporting System (FSRS). This was an oversight on our part and have corrected this action. The FSRS was updated to include the subrecipients to the Guam Department of Administration Guam Broadband Infrastructure Program (Federal Award ID Number 66-08-I2208). Moving forward, we will ensure to report first-tier subawards of $30,000 or more to the Federal funding Accountability and Transparency Act Subaward Reporting System. This has been remedied as the Agency did the reporting in FSRS in FY24.

Finding No.: 2023-011 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with the applicable equipment management requirements, grantees that acquire equipment with Federal funds are required to perform a physical inventory of the property and reconcile results with property records at least once every two years. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sale price of the property. In addition, adequate maintenance procedures must be established to keep the property in good condition. Condition: GovGuam’s most recent comprehensive physical inventory of its property was in January 2016; however, the required reconciliation was not completed. As of September 30, 2023, the required biannual physical inventory and reconciliation were not performed. We are unable to assess the overall cumulative monetary value of this deficiency. However, the table below summarizes the level of total capital outlays for the program over the past five years. See the Notes to the SEFA for chart/table. Cause: The processes over inventory, maintenance and reconciliation of capital assets are not routine. Government of Guam requires more funding and human resources to fully implement and develop a useful capital asset management system. Effect: GovGuam is in noncompliance with applicable equipment and real property management requirements. The underlying capital outlays are not considered questioned costs, as we are unable to quantify the extent of noncompliance. Government of Guam Schedule of Findings and Questioned Costs, continued 43 Finding No.: 2023-011, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Identification as a Repeat Finding: 2022-008 Recommendation: GovGuam should complete the required biannual physical inventory and reconciliations and should consider developing a more detailed corrective action plan with timetables for completing planned actions, such as processing required reconciliations and reports, training personnel and coordinating with other governmental units on property management requirements. Views of Responsible Officials: Implementation of a Fixed Assets Module as part of the new FMIS system is near completion which will help automate the tracking and reporting of capital assets. DOA will update the SOP for the Fixed Assets for capital asset reporting accordingly. In addition, the Agency will require all line agencies to designate a property manager to periodically track tagged assets on a revolving basis. Review of Assets acquired in FY2023 was completed, with FY2024 in progress. As noted previously, the process is hampered by difficulties in recruiting personnel.

Finding No.: 2023-012 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $515,384 Criteria: In accordance with applicable procurement and suspension and debarment requirements, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Government of Guam procurement regulations specify that every procurement shall be made by competitive sealed bidding, with certain exceptions, including the following: 1. The small purchases method applies to procurements less than $25,000 for supplies and services and less than $100,000 for construction, and procurement requirements shall not be artificially divided so as to constitute a small purchase. For small purchases, no less than three positive written quotations from businesses shall be solicited, recorded and placed in the procurement file. Awards shall be made to the lowest responsible and responsive bidder. 2. Sole source procurement is not permissible unless a requirement is available from only a single supplier. In cases of reasonable doubt, competition should be solicited. All procurement records shall be retained and disposed of in accordance with record retention guidelines and schedules approved by the Attorney General. Condition: Of 14 procurement transactions tested, aggregating $5.9 million of $9.2 million in total applicable non-payroll program expenditures, we noted the following: 1. For two (or 14%), no procurement file was provided. See the Notes to the SEFA for chart/table. 2. For two (or 14%), GovGuam paid vendor number M0098076 under Prior Reference number D230660529 on behalf of a subrecipient and did not retain documentation to ascertain that the subrecipient’s vendor selection complied with applicable procurement requirements. Subsequently, GovGuam provided procurement files obtained from the subrecipient; we noted noncompliance. Government of Guam Schedule of Findings and Questioned Costs, continued 45 Finding No.: 2023-012, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $515,384 Condition, continued: For PO Number 20224338, no written rationale is included in the procurement file as to why the lowest bidder was not selected. The lowest bidder quoted $154.28 per medical drug vial, and the selected bidder quoted $189.50, resulting in an excess quote of $35.22. GovGuam paid the vendor for 72 vials at the excess quote, resulting in a questioned cost of $2,536. For PO Number 20230055, the small purchases method was used; however, less than three informal price quotations are on file. The procurement of a medical drug includes four solicitations, to which three did not respond. The solicitations were emailed the morning of 10/04/2022 and required delivery within 24 hours. Given the ease of emailing capabilities and official social media platforms, other potential suppliers should have been solicited and given an opportunity to participate in the federally funded transaction. See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce compliance with applicable procurement requirements. Effect: GovGuam is in noncompliance with applicable procurement requirements. The reportable questioned cost is $515,384. Identification as a Repeat Finding: Finding 2022-013 Recommendation: Responsible procurement personnel should enforce compliance with applicable procurement requirements. Prior to making payments directly to a vendor on behalf of a subrecipient, responsible personnel should retain documentation that substantiates compliance with procurement requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 46 Finding No.: 2023-012, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $515,384 Views of Responsible Officials: Legal requirement was followed. In circumstances where less than 3 quotes are obtained, that is a market indication that further efforts to secure quotation will be unsuccessful.

Finding No.: 2023-013 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, amounts reported in SF-425 Federal Financial Report should be accurate. Condition: 1. For two (or 22%) of nine reports tested, the amounts reported in the SF-425 reports for the semi-annual reporting periods 12/31/2022 and 06/30/2023 did not agree with the underlying accounting records, as follows: See the Notes to the SEFA for chart/table. 2. For two (or 22%) of nine reports tested, the amounts reported in the SF-425 report for the semi- annual reporting period 12/31/2022 did not agree with the underlying accounting records, as follows: See the Notes to the SEFA for chart/table. Finding No.: 2023-013, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Reporting Questioned Costs: $0 Cause: GovGuam did not enforce monitoring controls over compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is presented as reported amounts do not represent Program overpayments. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain underlying accounting records to substantiate reported amounts. Views of responsible officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditure after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-014 Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, expenditures reported in quarterly reports should be supported by underlying accounting records. Condition: The expenditures reported in the quarterly reports differ from amounts recorded in AS400, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is reported because the variances do not represent overpayments. Identification as a Repeat Finding: Finding 2022-017 Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain underlying accounting records to substantiate reported amounts. Government of Guam Schedule of Findings and Questioned Costs, continued 50 Finding No.: 2023-014, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Reporting Questioned Costs: $0 Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditures after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-015 Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Eligibility Questioned Costs: $2,931 Criteria: In accordance with applicable eligibility requirements, HAF participants are required to maintain documentation to support eligibility determinations. Condition: For two (or 3%) of 60 transactions, aggregating $66,243 of $6.4 million in total Program benefits, no case file was provided. See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable eligibility requirements. GovGuam did not effectively maintain documentation to corroborate eligibility determinations. Case file documentation was misplaced due to the transfer of files to a new office. Effect: GovGuam is in noncompliance with applicable eligibility requirements. The reportable questioned cost is $2,931 because the projected questioned cost exceeds the threshold. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable eligibility requirements. Responsible personnel should ensure that all supporting case files are stored and properly maintained to substantiate eligibility determinations. Views of Responsible Officials: All documents were provided to HAF for client's eligibility for the program. However, due to a move, file was misplaced. Records Management SOPs will be updated to have all documentation stored electronically.

Finding No.: 2023-016 Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements expenditures reported in quarterly reports should be supported by underlying accounting records. Condition: The expenditures reported in the quarterly reports differ from amounts recorded in AS400, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is reported because the variances do not represent overpayments. Identification as a Repeat Finding: Finding 2022-020 Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain underlying accounting records to substantiate reported amounts. Government of Guam Schedule of Findings and Questioned Costs, continued 53 Finding No.: 2023-016, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Reporting Questioned Costs: $0 Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditures after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-017 Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Procurement and Suspension and Debarment Questioned Costs: $3,984,442 Criteria: In accordance with applicable procurement and suspension and debarment requirements, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Government of Guam procurement regulations specify that every procurement shall be made by competitive sealed bidding, with certain exceptions, including the following: 1. The small purchases method applies to procurements less than $25,000 for supplies and services and less than $100,000 for construction, and procurement requirements shall not be artificially divided so as to constitute a small purchase. For small purchases, no less than three positive written quotations from businesses shall be solicited, recorded and placed in the procurement file. 2. Sole source procurement is not permissible unless a requirement is available from only a single supplier. A requirement for a particular proprietary item does not justify a sole source procurement if there is more than one potential bidder or offeror for that item. In cases of reasonable doubt, competition should be solicited. All procurement records shall be retained and disposed of in accordance with record retention guidelines and schedules approved by the Attorney General. Condition: Of 60 procurement transactions, aggregating $21.5 million of $28.3 million in total applicable non- payroll program expenditures, we noted the following: 1. For one (or 2%), the small purchases method was used; however, less than three informal price quotations are on file. The procurement of miscellaneous mitigation and repairs of a public building includes three quotations, of which two indicate “no quote.” Given the ease of emailing capabilities and official social media platforms, other potential suppliers should have been solicited and given an opportunity to participate in the federally funded transaction. No questioned cost is presented as the procurement can be viewed as being technically compliant based on existing GovGuam procurement regulations and guidance from the Office of the Attorney General of Guam. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 55 Finding No.: 2023-017, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Procurement and Suspension and Debarment Questioned Costs: $3,984,442 Condition, continued: 2. For one (or 2%), documentation in the procurement file provides a justification for sole source procurement of a proprietary item, as well as informal solicitations of three other vendors who provided responses of “no quote.” Such rationale and documentation are insufficient to demonstrate that the required services were available from only a single supplier. Competitive sealed bidding procedures should have been used given the dollar value of the required services. See the Notes to the SEFA for chart/table. 3. For 10 (or 17%) no procurement file was provided. See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce compliance with applicable procurement requirements. Effect: GovGuam is in noncompliance with applicable procurement requirements. The reportable questioned cost is $3,984,442 from Conditions 2 and 3. Government of Guam Schedule of Findings and Questioned Costs, continued 56 Finding No.: 2023-017, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Procurement and Suspension and Debarment Questioned Costs: $3,984,442 Identification as a Repeat Finding: Finding 2022-022 Recommendation: Responsible procurement personnel should enforce compliance with applicable procurement requirements. Views of Responsible Officials: Procurement personnel will continue to enforce compliance with applicable procurement. A requirement of no less than three (3) price quotations to be on file, with evidence of solicitation from other potential suppliers to participate. In addition, a requirement for a "no quote" submission and to solicit from other potential suppliers should a "no quote" be received. It is our belief that we have followed the procurement process based on GAC Title 5 Chapter 5 §5213 for conditions 1 and 2. Condition 3, $3.35 million are not a cost in our books, as these costs are captured in GMHA's audit expenditures. Auditor Response: We obtained Condition 3 transactions from GovGuam’s financial management system expenditure details.

Finding No.: 2023-018 Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must: 1. Clearly identify to the subrecipient the award as a subaward by providing the ALN (Assistance Listings Number) and name. 2. Include the total amount provided to subrecipients from each Federal program. 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200, subpart F, met the audit requirements. Condition: For the year ended September 30, 2023, GovGuam reported $80.6 million in total program expenditures in the Schedule of Federal Awards (SEFA). A total of $28.3M represents amounts passed through to GovGuam line agencies and component units. Of this amount, approximately $847,464 represents payments for various programs administered by Guam Economic Development Authority (GEDA). Only $27.5 million was identified as amounts passed through to GovGuam line agencies and component units in the final SEFA, which did not include the amounts administered by GEDA. According to Executive Order No. 2021-22, dated September 7, 2021, “GEDA is appointed to serve as the Program processor for Guam, subject to continued monitoring and oversight by the Office of the Governor. The Administrator of GEDA shall serve as the official responsible for overseeing GEDA’s fulfillment of the Program, which includes the following items:…[(]i[)].. Implementing the Program, inclusive of drafting the application, standard operating procedures (SOP), and other relevant documentation. [(]ii.[)] Receiving and reviewing applications and submitting payment requests to the Department of Administration for disbursement to eligible small businesses.” Government of Guam Schedule of Findings and Questioned Costs, continued 58 Finding No.: 2023-018, continued Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Condition, continued: Similar language is documented in other executive orders, describing GEDA as the administrator of various programs funded by ALN 21.027 and describing GEDA’s responsibility to make eligibility determinations. Therefore, GEDA meets the definition of a subrecipient, and amounts administered by GEDA should be reported in the SEFA as amounts passed through to subrecipients. Cause: GovGuam did not properly identify amounts passed through to subrecipients and did not enforce compliance with applicable subrecipient monitoring requirements. The Department of Administration believes that GEDA is not a subrecipient. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. No questioned cost is reported because GEDA underwent a Single Audit for FY 2023. Identification as a Repeat Finding: Finding 2022-023 Recommendation: GovGuam should enforce compliance with applicable subrecipient monitoring requirements. Also, GovGuam should consider seeking guidance and confirmation from the Grantor Agency regarding the classification of GEDA as either a subrecipient or a contractor. Views of Responsible Officials: The Government continues to disagree with the auditor. The language of CFR 200.331(c) is clear that it is the judgment of the pass-through entity that is important. The auditor does not explain the reasoning for reaching a different opinion. Many jurisdictions have engaged third-party administrators for programs without concluding that they become sub-recipients. Government of Guam Schedule of Findings and Questioned Costs, continued 59 Finding No.: 2023-018, continued Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Auditor Response: The language of 2 CFR 200.331(c) is clear that “the pass-through entity must use judgement” and that “the substance of the relationship is more important than the form of the agreement.” The language of 2 CFR 200.331(a)(1) is also clear that a characteristic of a subrecipient is that the entity “Determines who is eligible to receive what Federal assistance.” The Condition sets forth our rationale.

Finding No.: 2023-019 Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable special reporting requirements, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: Subawards are not reported in FSRS, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor Program costs for compliance with applicable reporting requirements. Effect: GovGuam appears to be in noncompliance with applicable reporting requirements relative to special reporting for FFATA requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Views of Responsible Officials: An awardee could not report the required information in FSRS unless the federal awarding agency has registered the award. The US Treasury has not advised the Government that they have registered the Capital Projects Fund award.

Finding No.: 2023-020 Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Subrecipient Monitoring Questioned Costs: $0 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must: 1. Clearly identify to the subrecipient the award as a subaward by providing the ALN (Assistance Listings Number) and name. 2. Include the total amount provided to subrecipients from each Federal program. 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200, subpart F, met the audit requirements. Condition: For the sole subrecipient, Vendor Number U0226001, amounting to $759,030, we did not receive subaward documentation to substantiate communication of the subaward’s terms and conditions. Cause: GovGuam did not enforce monitoring controls over compliance with applicable subrecipient monitoring requirements. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. No questioned cost is presented as we are aware that Vendor Number U0226001 obtained a Single Audit for FY 2023. Recommendation: GovGuam should more closely monitor subrecipients in accordance with subrecipient monitoring requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 62 Finding No.: 2023-020, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Subrecipient Monitoring Questioned Costs: $0 Views of Responsible Officials: The agency followed the criteria stated in the finding. Improvements to monitoring controls have been implemented. Prior to the creating of any subrecipient account a copy of the FFATA report be attached, as well as, creating a check list of subrecipient monitoring requirements prior to any payments being made.

Finding No.: 2023-021 Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Government of Guam procurement regulations specify that every procurement shall be made by competitive sealed bidding, with certain exceptions, including the following: 1. The small purchases method applies to procurements less than $25,000 for supplies and services and less than $100,000 for construction, and procurement requirements shall not be artificially divided so as to constitute a small purchase. For small purchases, no less than three positive written quotations from businesses shall be solicited, recorded and placed in the procurement file. 2. Sole source procurement is not permissible unless a requirement is available from only a single supplier. In cases of reasonable doubt, competition should be solicited. All procurement records shall be retained and disposed of in accordance with record retention guidelines and schedules approved by the Attorney General. Condition: For three (or 5%) of 60 procurement transactions, aggregating $166,681 of $506,862 in total applicable non-payroll program expenditures, the small purchases method was used; however, less than three informal price quotations are on file. Given the ease of emailing capabilities and official social media platforms, other potential suppliers should have been solicited and given an opportunity to participate in the federally funded transaction. No questioned cost is presented as the procurement can be viewed as being technically compliant based on existing GovGuam procurement regulations and guidance from the Office of the Attorney General of Guam. Government of Guam Schedule of Findings and Questioned Costs, continued 64 Finding No.: 2023-021, continued Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Procurement and Suspension and Debarment Questioned Costs: $0 Condition, continued: 1. The procurement of preventative maintenance of laboratory equipment includes four quotations, of which three indicate “no quote.” 2. The procurement of laboratory/medical items includes five quotations, of which three indicate “no quote.” 3. The procurement of repair and maintenance of marine vessels includes four quotations, of which two indicate “no quote.” See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce compliance with applicable procurement requirements. Effect: GovGuam is in noncompliance with applicable procurement requirements. Recommendation: Responsible procurement personnel should enforce compliance with applicable procurement requirements. Views of Responsible Officials: Procurement process was followed based on GAC Title 5 Chapter 5 §5213.

Finding No.: 2023-022 Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Program Income Questioned Costs: $645,005 Criteria: In accordance with applicable Cooperative Agreement Programmatic Conditions for program income, all program income generated by the recipient must be added to the assistance award and must be used for the purposes and under the conditions of the award. Pursuant to 2 CFR 1500.7(b), the Addition method applies to the use of program income under the award. The recipient must maintain records which account for program income and specify how program income has been used. Condition: 1. We noted that FY 2023 program income (PI) records of Guam Environmental Protection Agency (GEPA) did not agree with underlying accounting records, as follows: See the Notes to the SEFA for chart/table. 2. No records were provided to specify the uses of excess program income. See the Notes to the SEFA for chart/table. Cause: GovGuam did not monitor compliance with applicable program income requirements. Effect: GovGuam is in noncompliance with applicable program income requirements. The reportable questioned cost is $645,005. Recommendation: Responsible personnel should review reported amounts for accuracy and completeness based on the underlying accounting records. Government of Guam Schedule of Findings and Questioned Costs, continued 66 Finding No.: 2023-022, continued Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Program Income Questioned Costs: $645,005 Views of Responsible Officials: Agency disagrees with the findings. The program income is not tied to assist or supplement the federal awards. The program income is used to supplement the special revenue funds handled by the department. Auditor Response: No documentation was provided to substantiate the use of $645,005 in program income.

Finding No.: 2023-023 Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, amounts reported in SF-425 Federal Financial Report should be accurate and complete. Condition: For the one SF-425 report tested, the amounts reported for the semi-annual reporting period ended 09/30/2023 did not agree with the underlying accounting records, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is presented as the reported amounts do not represent overpayments. Recommendation: GovGuam should enforce compliance with applicable reporting requirements. Responsible personnel should review reported amounts for accuracy prior to submission. Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditure after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. Government of Guam Schedule of Findings and Questioned Costs, continued 68 Finding No.: 2023-023, continued Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants Federal Award No.: M009061390 Area: Reporting Questioned Costs: $0 Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-024 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425H Education Stabilization Fund–Governors (Outlying Areas) (ESF- Governor) Federal Award No.: COVID-19 S425H210004 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Criteria: In accordance with applicable matching, level of effort, earmarking requirements and section 18008 of the CARES Act, the State will maintain support for elementary and secondary education, and State support for higher education, at least at the proportional levels of such support relative to the State’s overall spending, averaged over fiscal years 2017, 2018, and 2019. Such average is defined as the baseline. Furthermore, a State must use the same data sources in determining overall State spending for the baseline years and FY 2023. Condition: The Government of Guam has not submitted final 2023 expenditure data for elementary/secondary education, higher education, and overall Outlying Area spending. Based on our reading of email communications from U.S. ED, Education Program Specialist, Insular Areas, in September 2024, we noted that U.S. ED is aware of such pending submission. Calculations using preliminary data appear to indicate that GovGuam’s maintenance of effort for FY 2023 may be deficient, as follows: See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 70 Finding No.: 2023-024, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425H Education Stabilization Fund–Governors (Outlying Areas) (ESF- Governor) Federal Award No.: COVID-19 S425H210004 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Cause: GovGuam did not enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Effect: GovGuam appears to be in noncompliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. No questioned cost is presented because the source data for determining overall State spending for the baseline years was the State’s Single Audit Reports, and the State’s Single Audit Report for FY 2023 is yet to be issued. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Responsible personnel should verify GovGuam’s overall spending levels. Views of Responsible Officials: The agency agrees with the findings and will apply the recommendations moving forward.

Finding No.: 2023-025 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425H Education Stabilization Fund–Governors (Outlying Areas) (ESF- Governor) Federal Award No.: COVID-19 S425H210004 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable special reporting requirements, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, amounts reported in FSRS should agree with the underlying accounting records. Condition: 1. Subawards are not reported in FSRS, as follows: See the Notes to the SEFA for chart/table. 2. For one (or 33%) of three reports tested, Guam Community College reported expenditures of $197,448 in USASpending.gov as opposed to $141,404 shown on the GEER I report submitted in FY2023. This resulted in a variance of $56,044. Cause: GovGuam did not effectively monitor compliance with applicable reporting requirements. Effect: GovGuam appears to be in noncompliance with applicable reporting requirements relative to special reporting for FFATA requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Government of Guam Schedule of Findings and Questioned Costs, continued 72 Finding No.: 2023-025, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425H Education Stabilization Fund–Governors (Outlying Areas) (ESF- Governor) Federal Award No.: COVID-19 S425H210004 Area: Reporting Questioned Costs: $0 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should review reported amounts for accuracy prior to submission. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Views of Responsible Officials: The agency followed the criteria stated in the finding. Improvements to monitoring controls have been implemented. Prior to the creating of any subrecipient account a copy of the FATA report be attached, as well as, creating a check list of subrecipient monitoring requirements prior to any payments being made.

Finding No.: 2023-028 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Criteria: In accordance with applicable matching, level of effort, earmarking requirements for the direct spending earmark, states and territories must spend not less than 70 percent of the Mandatory and federal and state share of Matching funds (Assistance Listing 93.596) to provide child care assistance to families who: (1) receive Temporary Assistance for Needy Families (TANF) assistance; (2) are attempting through work activities to transition off TANF; and (3) are at risk of becoming dependent on TANF (45 CFR section 98.50(e) and (f)). Condition: During FY 2023, expenditures recorded for ALN 93.596 do not appear to be for child care assistance to needy families. The Program expended approximately 61% for travel and 25% for supplies. Therefore, the required direct spending earmark is deficient, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Effect: GovGuam is in noncompliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark.. The reportable questioned cost is $62,726. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Prior to approving requisitions to be charged to ALN 93.596, responsible personnel should verify direct spending earmark levels. Government of Guam Schedule of Findings and Questioned Costs, continued 79 Finding No.: 2023-028, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward. However, the Matching Level of Effort (MOE) earmarking is not a requirement in accordance with the Supplemental Terms and Conditions for the Child Care Mandatory and Matching Funds of the Child Care & Development Fund's Cost Sharing or Matching (Non-Federal Share) of Program Funding, page 2. Item 6 identifies that a state match is not required while Item 8 identifies that the MOE threshold applies to states only.

Finding No.: 2023-028 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Criteria: In accordance with applicable matching, level of effort, earmarking requirements for the direct spending earmark, states and territories must spend not less than 70 percent of the Mandatory and federal and state share of Matching funds (Assistance Listing 93.596) to provide child care assistance to families who: (1) receive Temporary Assistance for Needy Families (TANF) assistance; (2) are attempting through work activities to transition off TANF; and (3) are at risk of becoming dependent on TANF (45 CFR section 98.50(e) and (f)). Condition: During FY 2023, expenditures recorded for ALN 93.596 do not appear to be for child care assistance to needy families. The Program expended approximately 61% for travel and 25% for supplies. Therefore, the required direct spending earmark is deficient, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Effect: GovGuam is in noncompliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark.. The reportable questioned cost is $62,726. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Prior to approving requisitions to be charged to ALN 93.596, responsible personnel should verify direct spending earmark levels. Government of Guam Schedule of Findings and Questioned Costs, continued 79 Finding No.: 2023-028, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward. However, the Matching Level of Effort (MOE) earmarking is not a requirement in accordance with the Supplemental Terms and Conditions for the Child Care Mandatory and Matching Funds of the Child Care & Development Fund's Cost Sharing or Matching (Non-Federal Share) of Program Funding, page 2. Item 6 identifies that a state match is not required while Item 8 identifies that the MOE threshold applies to states only.

Finding No.: 2023-028 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Criteria: In accordance with applicable matching, level of effort, earmarking requirements for the direct spending earmark, states and territories must spend not less than 70 percent of the Mandatory and federal and state share of Matching funds (Assistance Listing 93.596) to provide child care assistance to families who: (1) receive Temporary Assistance for Needy Families (TANF) assistance; (2) are attempting through work activities to transition off TANF; and (3) are at risk of becoming dependent on TANF (45 CFR section 98.50(e) and (f)). Condition: During FY 2023, expenditures recorded for ALN 93.596 do not appear to be for child care assistance to needy families. The Program expended approximately 61% for travel and 25% for supplies. Therefore, the required direct spending earmark is deficient, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not effectively monitor compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Effect: GovGuam is in noncompliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark.. The reportable questioned cost is $62,726. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable matching, level of effort, earmarking requirements for the direct spending earmark. Prior to approving requisitions to be charged to ALN 93.596, responsible personnel should verify direct spending earmark levels. Government of Guam Schedule of Findings and Questioned Costs, continued 79 Finding No.: 2023-028, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDF Area: Matching, Level of Effort, Earmarking Questioned Costs: $62,726 Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward. However, the Matching Level of Effort (MOE) earmarking is not a requirement in accordance with the Supplemental Terms and Conditions for the Child Care Mandatory and Matching Funds of the Child Care & Development Fund's Cost Sharing or Matching (Non-Federal Share) of Program Funding, page 2. Item 6 identifies that a state match is not required while Item 8 identifies that the MOE threshold applies to states only.

Finding No.: 2023-029 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Area: Period of Performance Questioned Costs: $40,714 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GovGuam charged costs to a federal award after the period of performance obligation end date, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce monitoring controls over compliance with applicable period of performance requirements. Effect: GovGuam is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $40,714. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward.

Finding No.: 2023-029 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Area: Period of Performance Questioned Costs: $40,714 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GovGuam charged costs to a federal award after the period of performance obligation end date, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce monitoring controls over compliance with applicable period of performance requirements. Effect: GovGuam is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $40,714. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward.

Finding No.: 2023-029 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Area: Period of Performance Questioned Costs: $40,714 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GovGuam charged costs to a federal award after the period of performance obligation end date, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce monitoring controls over compliance with applicable period of performance requirements. Effect: GovGuam is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $40,714. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: The agency agrees with the finding and will apply the recommendations moving forward.

Finding No.: 2023-030 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, ACF-696, Child Care and Development Fund Financial Report is due quarterly. Each fiscal year’s expenditure report must be separate; therefore, multiple reports are required if awards from more than one fiscal year are expended in a given quarter. Moreover, expenditures reported should be accurate and supported by underlying accounting records. Also, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: 1. Grant years 2019 through 2023 expenditures reported per ACF-696 are not accurately supported by underlying accounting records as follows: See the Notes to the SEFA for chart/table. 2. Subawards in the amount of $12,156,202 are not reported in FSRS. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 82 Finding No.: 2023-030, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Cause: GovGuam did not enforce monitoring controls over reconciliations and over compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is reported because we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: Finding 2022-030 Recommendation: GovGuam should enforce monitoring controls over compliance with reporting requirements. Responsible personnel should review underlying accounting records and perform reconciliation of the required reports. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditures after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. For condition 2, the Agency will report first-tier subawards to the FSRS system. However, it is noteworthy to mention that the system will be expiring as of March 2025. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-030 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, ACF-696, Child Care and Development Fund Financial Report is due quarterly. Each fiscal year’s expenditure report must be separate; therefore, multiple reports are required if awards from more than one fiscal year are expended in a given quarter. Moreover, expenditures reported should be accurate and supported by underlying accounting records. Also, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: 1. Grant years 2019 through 2023 expenditures reported per ACF-696 are not accurately supported by underlying accounting records as follows: See the Notes to the SEFA for chart/table. 2. Subawards in the amount of $12,156,202 are not reported in FSRS. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 82 Finding No.: 2023-030, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Cause: GovGuam did not enforce monitoring controls over reconciliations and over compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is reported because we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: Finding 2022-030 Recommendation: GovGuam should enforce monitoring controls over compliance with reporting requirements. Responsible personnel should review underlying accounting records and perform reconciliation of the required reports. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditures after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. For condition 2, the Agency will report first-tier subawards to the FSRS system. However, it is noteworthy to mention that the system will be expiring as of March 2025. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-030 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, ACF-696, Child Care and Development Fund Financial Report is due quarterly. Each fiscal year’s expenditure report must be separate; therefore, multiple reports are required if awards from more than one fiscal year are expended in a given quarter. Moreover, expenditures reported should be accurate and supported by underlying accounting records. Also, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: 1. Grant years 2019 through 2023 expenditures reported per ACF-696 are not accurately supported by underlying accounting records as follows: See the Notes to the SEFA for chart/table. 2. Subawards in the amount of $12,156,202 are not reported in FSRS. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 82 Finding No.: 2023-030, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Reporting Questioned Costs: $0 Cause: GovGuam did not enforce monitoring controls over reconciliations and over compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is reported because we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: Finding 2022-030 Recommendation: GovGuam should enforce monitoring controls over compliance with reporting requirements. Responsible personnel should review underlying accounting records and perform reconciliation of the required reports. Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to reporting subawards in FSRS. Views of Responsible Officials: The Agency disagrees with the finding of non-compliance as we have complied to submit the reporting in a timely manner to the federal agency. Due to the timing of required reporting, it may not align with reported AS400 expenditures after reporting has been posted. There is no provision in the reporting for adjustments of previously reported values. Moving forward all reporting will be reviewed and approved by the Federal and Compliance Section. Implementation of the Federal Module anticipated to be fully functional by end of FY2025 will automate and improve this process. For condition 2, the Agency will report first-tier subawards to the FSRS system. However, it is noteworthy to mention that the system will be expiring as of March 2025. Auditor Response: Timeliness of report submission is not an issue. We acknowledge that reported amounts may not align with post-reporting transactions in AS400. However, no documentation of contemporaneous transactions was provided to substantiate reported amounts, and no reconciliation was provided to explain the identified variances.

Finding No.: 2023-031 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200 (Uniform Guidance), subpart F, met the audit requirements for a Single Audit. Condition: Of 40 subrecipients tested, aggregating $18.1 million of $33.7 million in amounts passed through to subrecipients, we noted the following: 1. For 23 (or 58%), the CCDF Program did not perform monitoring activities to ensure subrecipients spent funds in accordance with the terms and conditions of the subaward. See the Notes to the SEFA for chart/table. 2. For one (or 3%), the CCDF Program passed through $831,500 to Vendor Number 8S767075 during FY 2023. CCDF did not perform monitoring activities to verify whether the subrecipient met the Single Audit requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 84 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Cause: GovGuam did not establish controls over compliance with applicable subrecipient monitoring requirements. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. The reportable questioned cost is $9,471,835. Recommendation: GovGuam should establish and implement controls over compliance with applicable subrecipient monitoring requirements. Responsible personnel should consider obtaining periodic reports from subrecipients that describe how subgrant funds were used and reviewing such reports for compliance with terms and conditions of the subaward. Views of Responsible Officials: The Agency disagrees with these findings. As per the Information Memorandum ARP Act Child Care Stabilization Funds under the Qualified and Eligible Child Care Providers, Provider Reporting and Monitoring, the ARP Act does not include specific reporting requirements for child care providers receiving subgrants and any subgrant reporting requirements are at the discretion of the lead agency, page 21. Additionally, Lead Agencies that use other governmental or non- governmental subrecipients to administer the program must have written agreements in place outlining roles and responsibilities for meeting CCDF requirements. The contents of the written agreement may vary based on the role the subrecipient is asked to assume or the type of product undertaken, but must include, at a minimum, tasks to be performed, a schedule for completing tasks, a budget which itemizes categorical expenditures, and indicators or measures to assess performance. The Lead Agency has fulfilled this requirement in accordance with 45 CFR section 98.1. Government of Guam Schedule of Findings and Questioned Costs, continued 85 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Auditor Response: The referenced Information Memorandum states, “At a minimum, lead agencies should collect the following information from child care providers receiving subgrants:…How funds were used….” No monitoring reports or other documentation was provided to substantiate the Agency’s monitoring and determination as to whether the subaward was used for authorized purposes, complied with the terms and conditions of the subaward, and achieved performance goals.

Finding No.: 2023-031 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200 (Uniform Guidance), subpart F, met the audit requirements for a Single Audit. Condition: Of 40 subrecipients tested, aggregating $18.1 million of $33.7 million in amounts passed through to subrecipients, we noted the following: 1. For 23 (or 58%), the CCDF Program did not perform monitoring activities to ensure subrecipients spent funds in accordance with the terms and conditions of the subaward. See the Notes to the SEFA for chart/table. 2. For one (or 3%), the CCDF Program passed through $831,500 to Vendor Number 8S767075 during FY 2023. CCDF did not perform monitoring activities to verify whether the subrecipient met the Single Audit requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 84 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Cause: GovGuam did not establish controls over compliance with applicable subrecipient monitoring requirements. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. The reportable questioned cost is $9,471,835. Recommendation: GovGuam should establish and implement controls over compliance with applicable subrecipient monitoring requirements. Responsible personnel should consider obtaining periodic reports from subrecipients that describe how subgrant funds were used and reviewing such reports for compliance with terms and conditions of the subaward. Views of Responsible Officials: The Agency disagrees with these findings. As per the Information Memorandum ARP Act Child Care Stabilization Funds under the Qualified and Eligible Child Care Providers, Provider Reporting and Monitoring, the ARP Act does not include specific reporting requirements for child care providers receiving subgrants and any subgrant reporting requirements are at the discretion of the lead agency, page 21. Additionally, Lead Agencies that use other governmental or non- governmental subrecipients to administer the program must have written agreements in place outlining roles and responsibilities for meeting CCDF requirements. The contents of the written agreement may vary based on the role the subrecipient is asked to assume or the type of product undertaken, but must include, at a minimum, tasks to be performed, a schedule for completing tasks, a budget which itemizes categorical expenditures, and indicators or measures to assess performance. The Lead Agency has fulfilled this requirement in accordance with 45 CFR section 98.1. Government of Guam Schedule of Findings and Questioned Costs, continued 85 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Auditor Response: The referenced Information Memorandum states, “At a minimum, lead agencies should collect the following information from child care providers receiving subgrants:…How funds were used….” No monitoring reports or other documentation was provided to substantiate the Agency’s monitoring and determination as to whether the subaward was used for authorized purposes, complied with the terms and conditions of the subaward, and achieved performance goals.

Finding No.: 2023-031 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200 (Uniform Guidance), subpart F, met the audit requirements for a Single Audit. Condition: Of 40 subrecipients tested, aggregating $18.1 million of $33.7 million in amounts passed through to subrecipients, we noted the following: 1. For 23 (or 58%), the CCDF Program did not perform monitoring activities to ensure subrecipients spent funds in accordance with the terms and conditions of the subaward. See the Notes to the SEFA for chart/table. 2. For one (or 3%), the CCDF Program passed through $831,500 to Vendor Number 8S767075 during FY 2023. CCDF did not perform monitoring activities to verify whether the subrecipient met the Single Audit requirements. Government of Guam Schedule of Findings and Questioned Costs, continued 84 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Cause: GovGuam did not establish controls over compliance with applicable subrecipient monitoring requirements. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. The reportable questioned cost is $9,471,835. Recommendation: GovGuam should establish and implement controls over compliance with applicable subrecipient monitoring requirements. Responsible personnel should consider obtaining periodic reports from subrecipients that describe how subgrant funds were used and reviewing such reports for compliance with terms and conditions of the subaward. Views of Responsible Officials: The Agency disagrees with these findings. As per the Information Memorandum ARP Act Child Care Stabilization Funds under the Qualified and Eligible Child Care Providers, Provider Reporting and Monitoring, the ARP Act does not include specific reporting requirements for child care providers receiving subgrants and any subgrant reporting requirements are at the discretion of the lead agency, page 21. Additionally, Lead Agencies that use other governmental or non- governmental subrecipients to administer the program must have written agreements in place outlining roles and responsibilities for meeting CCDF requirements. The contents of the written agreement may vary based on the role the subrecipient is asked to assume or the type of product undertaken, but must include, at a minimum, tasks to be performed, a schedule for completing tasks, a budget which itemizes categorical expenditures, and indicators or measures to assess performance. The Lead Agency has fulfilled this requirement in accordance with 45 CFR section 98.1. Government of Guam Schedule of Findings and Questioned Costs, continued 85 Finding No.: 2023-031, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: COVID-19 2001GUCCC3, COVID-19 2101GUCCC5, COVID-19 2101GUCD6, COVID-19 2101GUCSC6 Area: Subrecipient Monitoring Questioned Costs: $9,471,835 Auditor Response: The referenced Information Memorandum states, “At a minimum, lead agencies should collect the following information from child care providers receiving subgrants:…How funds were used….” No monitoring reports or other documentation was provided to substantiate the Agency’s monitoring and determination as to whether the subaward was used for authorized purposes, complied with the terms and conditions of the subaward, and achieved performance goals.

Finding No.: 2023-032 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and Safety Requirements Questioned Costs: $145,345 Criteria: In accordance with applicable special tests and provisions requirements, Lead Agencies must ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. In accordance with the Child Care Development Fund (CCDF) State Plan, Section 5.3 Health and Safety Standards and Training for CCDF Providers, all licensed and license-exempt child care providers must be able to demonstrate compliance with Guam Public Law 31-73, which outlines certain home/facility conditions, as part of the health and safety standards and other requirements prior to the receipt of any CCDF funds. Validations of these requirements are made by Guam Department of Public Health and Social Services (DPHSS) Licensing Office and DPHSS-Division of Environmental Health (DEH) during quarterly facility inspections and monitoring. A certification of compliance report of the Job-Site Inspection is issued by Division of Environmental Health and provided to Guam’s CCDF Program Office and Bureau of Social Services Administration (BOSSA) – Licensing Office. Additionally, all licensed and license-exempt child care providers must complete 15 hours of health and safety related training each year. Condition: Of 33 child care providers tested, aggregating $8.9 million of $14.2 million in Program benefits, we noted the following: 1. For four (or 12%), no DEH annual inspection report is on file for the child care provider who is exempt from licensing requirements. See the Notes to the SEFA for chart/table. 2. For all 33 child care providers, case file documentation is not sufficient to demonstrate that all relevant employees completed 15 hours of health and safety training. Government of Guam Schedule of Findings and Questioned Costs, continued 87 Finding No.: 2023-032, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and safety requirements Questioned Costs: $145,345 Cause: GovGuam did not effectively monitor license-exempt child care providers for compliance with applicable special tests and provisions for health and safety requirements. Effect: GovGuam is in noncompliance with applicable special tests and provisions for health and safety requirements. The reportable questioned cost is $145,345. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable special tests and provisions for health and safety requirements. Prior to approving an application for a subsidy, responsible personnel should verify that the identified child care provider has obtained a certification of compliance report from DPHSS-DEH accordingly. Views of Responsible Officials: The agency has issued notices of noncompliance to those unresponsive. Moving forward, the bureau will hold providers accountable by issuing a Letter of Warning (LOW) and a Correction Action Plan (CAP) from the Social Service Licensing Officer or Child Care Compliance Officer to ensure compliance with the standards. The Agency disagrees with Condition 1. License-exempt child care providers will not have an annual DEH inspection since they are not required to obtain a sanitary permit. Auditor Response: Condition 1: No other document was provided to substantiate compliance with applicable health and safety requirements.

Finding No.: 2023-032 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and Safety Requirements Questioned Costs: $145,345 Criteria: In accordance with applicable special tests and provisions requirements, Lead Agencies must ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. In accordance with the Child Care Development Fund (CCDF) State Plan, Section 5.3 Health and Safety Standards and Training for CCDF Providers, all licensed and license-exempt child care providers must be able to demonstrate compliance with Guam Public Law 31-73, which outlines certain home/facility conditions, as part of the health and safety standards and other requirements prior to the receipt of any CCDF funds. Validations of these requirements are made by Guam Department of Public Health and Social Services (DPHSS) Licensing Office and DPHSS-Division of Environmental Health (DEH) during quarterly facility inspections and monitoring. A certification of compliance report of the Job-Site Inspection is issued by Division of Environmental Health and provided to Guam’s CCDF Program Office and Bureau of Social Services Administration (BOSSA) – Licensing Office. Additionally, all licensed and license-exempt child care providers must complete 15 hours of health and safety related training each year. Condition: Of 33 child care providers tested, aggregating $8.9 million of $14.2 million in Program benefits, we noted the following: 1. For four (or 12%), no DEH annual inspection report is on file for the child care provider who is exempt from licensing requirements. See the Notes to the SEFA for chart/table. 2. For all 33 child care providers, case file documentation is not sufficient to demonstrate that all relevant employees completed 15 hours of health and safety training. Government of Guam Schedule of Findings and Questioned Costs, continued 87 Finding No.: 2023-032, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and safety requirements Questioned Costs: $145,345 Cause: GovGuam did not effectively monitor license-exempt child care providers for compliance with applicable special tests and provisions for health and safety requirements. Effect: GovGuam is in noncompliance with applicable special tests and provisions for health and safety requirements. The reportable questioned cost is $145,345. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable special tests and provisions for health and safety requirements. Prior to approving an application for a subsidy, responsible personnel should verify that the identified child care provider has obtained a certification of compliance report from DPHSS-DEH accordingly. Views of Responsible Officials: The agency has issued notices of noncompliance to those unresponsive. Moving forward, the bureau will hold providers accountable by issuing a Letter of Warning (LOW) and a Correction Action Plan (CAP) from the Social Service Licensing Officer or Child Care Compliance Officer to ensure compliance with the standards. The Agency disagrees with Condition 1. License-exempt child care providers will not have an annual DEH inspection since they are not required to obtain a sanitary permit. Auditor Response: Condition 1: No other document was provided to substantiate compliance with applicable health and safety requirements.

Finding No.: 2023-032 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and Safety Requirements Questioned Costs: $145,345 Criteria: In accordance with applicable special tests and provisions requirements, Lead Agencies must ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. In accordance with the Child Care Development Fund (CCDF) State Plan, Section 5.3 Health and Safety Standards and Training for CCDF Providers, all licensed and license-exempt child care providers must be able to demonstrate compliance with Guam Public Law 31-73, which outlines certain home/facility conditions, as part of the health and safety standards and other requirements prior to the receipt of any CCDF funds. Validations of these requirements are made by Guam Department of Public Health and Social Services (DPHSS) Licensing Office and DPHSS-Division of Environmental Health (DEH) during quarterly facility inspections and monitoring. A certification of compliance report of the Job-Site Inspection is issued by Division of Environmental Health and provided to Guam’s CCDF Program Office and Bureau of Social Services Administration (BOSSA) – Licensing Office. Additionally, all licensed and license-exempt child care providers must complete 15 hours of health and safety related training each year. Condition: Of 33 child care providers tested, aggregating $8.9 million of $14.2 million in Program benefits, we noted the following: 1. For four (or 12%), no DEH annual inspection report is on file for the child care provider who is exempt from licensing requirements. See the Notes to the SEFA for chart/table. 2. For all 33 child care providers, case file documentation is not sufficient to demonstrate that all relevant employees completed 15 hours of health and safety training. Government of Guam Schedule of Findings and Questioned Costs, continued 87 Finding No.: 2023-032, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2301GUCCDD, 2301GUCCDF Area: Special Tests and Provisions - Health and safety requirements Questioned Costs: $145,345 Cause: GovGuam did not effectively monitor license-exempt child care providers for compliance with applicable special tests and provisions for health and safety requirements. Effect: GovGuam is in noncompliance with applicable special tests and provisions for health and safety requirements. The reportable questioned cost is $145,345. Recommendation: GovGuam should strengthen monitoring controls over compliance with applicable special tests and provisions for health and safety requirements. Prior to approving an application for a subsidy, responsible personnel should verify that the identified child care provider has obtained a certification of compliance report from DPHSS-DEH accordingly. Views of Responsible Officials: The agency has issued notices of noncompliance to those unresponsive. Moving forward, the bureau will hold providers accountable by issuing a Letter of Warning (LOW) and a Correction Action Plan (CAP) from the Social Service Licensing Officer or Child Care Compliance Officer to ensure compliance with the standards. The Agency disagrees with Condition 1. License-exempt child care providers will not have an annual DEH inspection since they are not required to obtain a sanitary permit. Auditor Response: Condition 1: No other document was provided to substantiate compliance with applicable health and safety requirements.

Finding No.: 2023-033 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.778 Medical Assistance Program Federal Award No.: 75X0512 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, amounts reported in CMS-64, Quarterly Statement of Expenditures for the Medical Assistance Program, should be supported by underlying accounting records. Condition: Reported expenditures are not supported by underlying accounting records, resulting in underreporting, as follows: See the Notes to the SEFA for chart/table. Cause: GovGuam did not enforce monitoring controls over reconciliations and over compliance with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is presented as reported expenditures represent allowable costs. Identification as a Repeat Finding: Finding 2022-032 Recommendation: GovGuam should enforce monitoring controls over compliance with reporting requirements. Responsible personnel should review underlying accounting records, perform reconciliations and retain such documents to substantiate reported amounts. Responsible personnel should also coordinate with the centralized accounting division to identify changes and adjust the CMS-64 reports or underlying records accordingly prior to the submission of the CMS-64 reports. Government of Guam Schedule of Findings and Questioned Costs, continued 89 Finding No.: 2023-033, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.778 Medical Assistance Program Federal Award No.: 75X0512 Area: Reporting Questioned Costs: $0 Views of Responsible Officials: The Agency acknowledges this finding and recognizes it as an ongoing issue related to the alignment of our reporting with the Department of Administration (DOA) financial system. One of the primary challenges arises from transactions that are not processed within the designated reporting period, which impacts on our initial submissions to CMS. Any adjustments or transactions made after the quarter's close, which were not captured in our previous reports, contribute to this issue. We understand that addressing this finding is a critical part of our corrective action measures. We are currently working on updating the existing Standard Operating Procedure (SOP) 2023-01, which governs interactions between the Department of Public Health and Social Services (DPHSS) and DOA/Division of Accounts. Since November 2024, we have been collaborating with DOA to revise this SOP with the goal of reconciling Medicaid and CHIP expenditures, as well as aligning reports from CMS-64 with the new Guam Financial Management Information System (GFMIS). Currently, PMS staff is in the process in finalizing the DRAFT SOP. We intend to have the DRAFT SOP completed and forwarded to DOA by Friday, January 31, 2025. If there are no changes to the SOP, we will work to have the SOP signed by all parties no later than February 14, 2025.

Finding No.: 2023-034 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.778 Medical Assistance Program Federal Award No.: 75X0512 Area: Special Tests and Provisions – Refunding of Federal Share of Medicaid Overpayments to Providers Questioned Costs: $121,735 Criteria: In accordance with applicable special tests and provisions requirements relative to overpayments made to providers, states have up to one year from the date of discovery of the overpayment to recover or attempt to recover the overpayment before the federal share must be refunded to the federal Centers for Medicare & Medicaid Services (CMS) via Form CMS-64 Summary, Line 9C1 – Fraud, Waste & Abuse Amounts, Line 9.C2-OIG Complaint False Claims Act, 9.D Other, 9.E. – RAC Collections, 9.F. – PERM Collections or 9.G. – MEQC Collections regardless of whether recovery is made from the provider. The state must credit the federal share to CMS either in the quarter in which the recovery is made or in the quarter in which the one-year period ends following discovery, whichever is earlier. Condition: During FY 2023, the Program reported overpayments to and recoupments from providers of $138,367 and $233,958, respectively. The schedule of overpayments and recoupment were not in sufficient detail to identify the discovery date. Therefore, it cannot be determined whether Federal share of overpayments is properly reported and refunded. Cause: GovGuam did not effectively monitor compliance with applicable special tests and provisions requirements relative to the refunding of overpayments made to providers. Effect: GovGuam is in noncompliance with applicable special tests and provisions requirements relative to the refunding of overpayments made to providers. The reportable questioned cost is $121,735 ($138,367 * 87.98% average FMAP). Identification as a Repeat Finding: Finding 2022-033 Government of Guam Schedule of Findings and Questioned Costs, continued 91 Finding No.: 2023-034, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.778 Medical Assistance Program Federal Award No.: 75X0512 Area: Special Tests and Provisions – Refunding of Federal Share of Medicaid Overpayments to Providers Questioned Costs: $121,735 Recommendation: GovGuam should monitor compliance with applicable special tests and provisions requirements relative to the refunding of overpayments made to providers. Responsible personnel should prepare a schedule of overpayments to and recoupments from providers in sufficient detail to identify discovery dates of overpayments and to report the Federal share of overpayments on Form CMS- 64 quarterly. Views of Responsible Officials: The Agency acknowledges this finding and has developed a corrective action plan that includes a new Standard Operating Procedure (SOP), 2024-005, for the Intake and Processing of Overpayment Checks. This new SOP addresses a gap in our process for tracking overpayment checks and refunding the Federal Share of Medicaid Overpayments to Providers. Furthermore, we are also in the process of updating SOP 2023-03, which focuses on Public Health Professional (PHPro) Entry for Provider Overpayment Checks and Recoupments, to improve our tracking and monitoring of overpayment checks and recoupment reconciliations. Currently, we are still addressing updates to this SOP and require additional time to work with BHCFA staff(s) to gather more information in finalizing the SOP. We intend to complete this SOP no later than February 28, 2025.

Finding No.: 2023-026 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with the applicable equipment management requirements, grantees that acquire equipment with Federal funds are required to perform a physical inventory of the property and reconcile results with property records at least once every two years. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sale price of the property. In addition, adequate maintenance procedures must be established to keep the property in good condition. Condition: GovGuam’s most recent comprehensive physical inventory of its property was in January 2016; however, the required reconciliation was not completed. As of September 30, 2023, the required biannual physical inventory and reconciliation were not performed. We are unable to assess the overall cumulative monetary value of this deficiency. However, the table below summarizes the level of total capital outlays for the program over the past five years. See the Notes to the SEFA for chart/table. Cause: The processes over inventory, maintenance and reconciliation of capital assets are not routine. Government of Guam requires more funding and human resources to fully implement and develop a useful capital asset management system. Effect: GovGuam is in noncompliance with applicable equipment and real property management requirements. The underlying capital outlays are not considered questioned costs, as we are unable to quantify the extent of noncompliance. Government of Guam Schedule of Findings and Questioned Costs, continued 74 Finding No.: 2023-026, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Identification as a Repeat Finding: 2022-008 Recommendation: GovGuam should complete the required biannual physical inventory and reconciliations and should consider developing a more detailed corrective action plan with timetables for completing planned actions, such as processing required reconciliations and reports, training personnel and coordinating with other governmental units on property management requirements. Views of Responsible Officials: Implementation of a Fixed Assets Module as part of the new FMIS system is near completion which will help automate the tracking and reporting of capital assets. DOA will update the SOP for the Fixed Assets for capital asset reporting accordingly. In addition, the Agency will require all line agencies to designate a property manager to periodically track tagged assets on a revolving basis. Review of Assets acquired in FY2023 was completed, with FY2024 in progress. As noted previously, the process is hampered by difficulties in recruiting personnel.

Finding No.: 2023-026 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with the applicable equipment management requirements, grantees that acquire equipment with Federal funds are required to perform a physical inventory of the property and reconcile results with property records at least once every two years. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sale price of the property. In addition, adequate maintenance procedures must be established to keep the property in good condition. Condition: GovGuam’s most recent comprehensive physical inventory of its property was in January 2016; however, the required reconciliation was not completed. As of September 30, 2023, the required biannual physical inventory and reconciliation were not performed. We are unable to assess the overall cumulative monetary value of this deficiency. However, the table below summarizes the level of total capital outlays for the program over the past five years. See the Notes to the SEFA for chart/table. Cause: The processes over inventory, maintenance and reconciliation of capital assets are not routine. Government of Guam requires more funding and human resources to fully implement and develop a useful capital asset management system. Effect: GovGuam is in noncompliance with applicable equipment and real property management requirements. The underlying capital outlays are not considered questioned costs, as we are unable to quantify the extent of noncompliance. Government of Guam Schedule of Findings and Questioned Costs, continued 74 Finding No.: 2023-026, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Identification as a Repeat Finding: 2022-008 Recommendation: GovGuam should complete the required biannual physical inventory and reconciliations and should consider developing a more detailed corrective action plan with timetables for completing planned actions, such as processing required reconciliations and reports, training personnel and coordinating with other governmental units on property management requirements. Views of Responsible Officials: Implementation of a Fixed Assets Module as part of the new FMIS system is near completion which will help automate the tracking and reporting of capital assets. DOA will update the SOP for the Fixed Assets for capital asset reporting accordingly. In addition, the Agency will require all line agencies to designate a property manager to periodically track tagged assets on a revolving basis. Review of Assets acquired in FY2023 was completed, with FY2024 in progress. As noted previously, the process is hampered by difficulties in recruiting personnel.

Finding No.: 2023-027 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Criteria: In accordance with applicable procurement and suspension and debarment requirements, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Government of Guam procurement regulations specify that every procurement shall be made by competitive sealed bidding, with certain exceptions, including the following: 1. The small purchases method applies to procurements less than $25,000 for supplies and services and less than $100,000 for construction, and procurement requirements shall not be artificially divided so as to constitute a small purchase. For small purchases, no less than three positive written quotations from businesses shall be solicited, recorded and placed in the procurement file. 2. Sole source procurement is not permissible unless a requirement is available from only a single supplier. A requirement for a particular proprietary item does not justify a sole source procurement if there is more than one potential bidder or offeror for that item. In cases of reasonable doubt, competition should be solicited. All procurement records shall be retained and disposed of in accordance with record retention guidelines and schedules approved by the Attorney General. Condition: Of 60 procurement transactions, aggregating $2.3 million of $3.5 million in total applicable non- payroll Program costs, we noted the following: COVID-19: 1. For two (or 3%), the small purchases method was used; however, less than three informal price quotations are on file. Given the ease of emailing capabilities and official social media platforms, other potential suppliers should have been solicited and given an opportunity to participate in the federally funded transaction. No questioned cost is presented as the procurement can be viewed as being technically compliant based on existing GovGuam procurement regulations and guidance from the Office of the Attorney General of Guam. Government of Guam Schedule of Findings and Questioned Costs, continued 76 Finding No.: 2023-027, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Condition, continued: a. The procurement of medical waste services includes five quotations, of which three indicate “no quote.” b. The procurement of computers includes six quotations, of which four indicate “no quote.” See the Notes to the SEFA for chart/table. COVID-19: 2. For five (or 8%), no procurement file was provided. The documentation that was provided pertained to payments of invoices and not the process of soliciting and selecting the vendor. See the Notes to the SEFA for chart/table. 3. For four (or 7%), documentation in the procurement file is insufficient to demonstrate compliance with sole source procurement. The language of the sole source justification indicates that the supply or service is available from more than one business. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 77 Finding No.: 2023-027, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Cause: GovGuam did not enforce compliance with applicable procurement requirements. Effect: GovGuam is in noncompliance with applicable procurement requirements. The reportable questioned cost is $477,823 from Conditions 2 and 3. Identification as a Repeat Finding: Finding 2022-025 Recommendation: Responsible procurement personnel should enforce compliance with applicable procurement requirements. Views of Responsible Officials: For condition 1, the procurement process was followed based on GAC Title 5 Chapter 5 §5213. For condition 2, the lease was procured by DOA. For condition 3, auditor to provide clarification regarding insufficiency of documentation.

Finding No.: 2023-027 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Criteria: In accordance with applicable procurement and suspension and debarment requirements, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Government of Guam procurement regulations specify that every procurement shall be made by competitive sealed bidding, with certain exceptions, including the following: 1. The small purchases method applies to procurements less than $25,000 for supplies and services and less than $100,000 for construction, and procurement requirements shall not be artificially divided so as to constitute a small purchase. For small purchases, no less than three positive written quotations from businesses shall be solicited, recorded and placed in the procurement file. 2. Sole source procurement is not permissible unless a requirement is available from only a single supplier. A requirement for a particular proprietary item does not justify a sole source procurement if there is more than one potential bidder or offeror for that item. In cases of reasonable doubt, competition should be solicited. All procurement records shall be retained and disposed of in accordance with record retention guidelines and schedules approved by the Attorney General. Condition: Of 60 procurement transactions, aggregating $2.3 million of $3.5 million in total applicable non- payroll Program costs, we noted the following: COVID-19: 1. For two (or 3%), the small purchases method was used; however, less than three informal price quotations are on file. Given the ease of emailing capabilities and official social media platforms, other potential suppliers should have been solicited and given an opportunity to participate in the federally funded transaction. No questioned cost is presented as the procurement can be viewed as being technically compliant based on existing GovGuam procurement regulations and guidance from the Office of the Attorney General of Guam. Government of Guam Schedule of Findings and Questioned Costs, continued 76 Finding No.: 2023-027, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Condition, continued: a. The procurement of medical waste services includes five quotations, of which three indicate “no quote.” b. The procurement of computers includes six quotations, of which four indicate “no quote.” See the Notes to the SEFA for chart/table. COVID-19: 2. For five (or 8%), no procurement file was provided. The documentation that was provided pertained to payments of invoices and not the process of soliciting and selecting the vendor. See the Notes to the SEFA for chart/table. 3. For four (or 7%), documentation in the procurement file is insufficient to demonstrate compliance with sole source procurement. The language of the sole source justification indicates that the supply or service is available from more than one business. See the Notes to the SEFA for chart/table. Government of Guam Schedule of Findings and Questioned Costs, continued 77 Finding No.: 2023-027, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $477,823 Cause: GovGuam did not enforce compliance with applicable procurement requirements. Effect: GovGuam is in noncompliance with applicable procurement requirements. The reportable questioned cost is $477,823 from Conditions 2 and 3. Identification as a Repeat Finding: Finding 2022-025 Recommendation: Responsible procurement personnel should enforce compliance with applicable procurement requirements. Views of Responsible Officials: For condition 1, the procurement process was followed based on GAC Title 5 Chapter 5 §5213. For condition 2, the lease was procured by DOA. For condition 3, auditor to provide clarification regarding insufficiency of documentation.