Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-01 - Source Documentation, Strengthen Controls over Financial Reporting (Significant Deficiency) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. Condition: District prepared drawdown calculations according to an internal reconciliation spreadsheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and supporting backup information. Cause: General ledger recording, or reconciling procedures were not enforced or completed. Dependable general ledger data was not available. Effect or Potential Effect: The lack of effective internal control activities over financial reporting could allow for inadvertent errors, such as calculation errors, payments for unauthorized purposes, and result in improper financial reporting. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-1 Recommendation: The District should establish a more detailed process for the review and approval of GAAP package Reporting, and grant progress reporting. As part of this process, the individual underlying and supporting worksheets and calculations should be subject to independent challenge, review and ap-proval at a sufficiently detailed level whereas calculation and other errors are prevented and detected in a timely manner. District's Response: The District had originally relied on a consultant accounting professional for record-ing activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant reimbursement requests. The district has now incorporated more grant specificity within the general ledger, but the spreadsheet is still being relied upon to calculate and support grant activity. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the District. Improvements are ongoing, but will not be sufficient for general ledger based report-ing until FY 2022-2023, when it is anticipated that this will allow the activities of the district to be recorded and managed within the general ledger. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District