2023-001 Surveys, Studies, Investigations, Demonstrations, and Training Grants and Cooperative – Assistance Listing No. 66.436; Grant No.84039801, 84039601,94039501; Grant Period – Year ended December 31, 2023.
Statement of Condition: Compliance over allowable cost, including application of the indirect cost rate supplied by the United States Department of the Interior. Approved provisional rate of 26.3% not used. Instead, allocation based upon prior month’s payroll.
Criteria: The Uniform Guidance, indirect cost negotiation agreement, and National Association of Wetland Managers’ internal control policies and procedures.
Cause: Management’s misunderstanding of accounting application of the provisional rate method.
Effect: Under/over charging of indirect cost.
Questioned Costs: Not identified.
Perspective: N/A.
Identification: Non-repeat.
Recommendation: Obtain professional accounting training in proper accounting for indirect cost utilizing a provisional/final rate method.
Views of Responsible Officials: The indirect cost rates contained are for use on grants, contracts, and other agreements with the Federal Government. The rates are negotiated by the U.S. Department of the Interior, Interior Business Center, and NAWM every year in accordance with the authority contained in applicable regulations.
The negotiated Indirect cost rates are provided to the Funding Agency at the time when the project budget is developed. Subsequent billing of the indirect cost is based on the time spent on the project.
Base: Total direct salaries and wages, including fringe benefits. All other program costs are eliminated from the calculation.
Treatment of fringe benefits: Fringe benefits applicable to direct salaries and wages are treated as direct costs; fringe benefits applicable to indirect salaries and wages are treated as indirect costs.
Treatment of paid absences: Vacation, holiday, sick leave, and other paid absences are included in salaries and wages and are claimed on grants, contracts, and other agreements as part of the normal cost for the salaries and wages.
Provisional/Final Rate: Within six (6) months after year end, a final indirect cost rate proposal is submitted based on actual costs. Billings and charges to contracts and grants are adjusted if the final rate varies from the provisional rate. If the final rate is greater than the provisional rate and there are no funds available to cover the additional indirect costs, NAWM may not recover all indirect costs. Conversely, if the final rate is less than the provisional rate, NAWM is required to pay back the difference to the funding agency.
All of our federal grants are multiyear and indirect cost is adjusted accordingly.
Record Keeping: NAWM maintains accounting records that demonstrate that each type of cost has been treated consistently, either as a direct cost or an indirect cost. Records pertaining to the costs of program administration, such as salaries, travel, and related costs, are kept on an annual basis.
Auditors’ Evaluation of Views of Responsible Officials: Management’s Response is in conflict with above Statement of Condition, Criteria, and Cause.
2023-002 Surveys, Studies, Investigations, Demonstrations, and Training Grants and Cooperative – Assistance Listing No. 66.436; Grant No.84039801, 84039601,94039501; Grant Period – Year ended December 31, 2023.
Statement of Condition: Internal control weakness - documentation of approval over allowable costs could not be located for select expenses, and ineffective control procedures over posting of approved indirect cost rate allocation.
Criteria: National Association of Wetland Managers’ internal control policies and procedures, indirect cost negotiation agreement, and the Uniform Guidance.
Cause: Procedures are in place requiring supervisory approval of documentation before costs are coded to grants, but procedures were not performed on all invoices. Also, ineffective control procedures over posting of indirect payroll cost allocation as indicated by compliance finding.
Effect: Increased risk of noncompliance.
Questioned Costs: Not identified.
Perspective: N/A.
Identification: Non-repeat.
Recommendation: Management should review above criteria and modify control or perform control procedures.
Views of Responsible Officials: Approval of allowable cost has been addressed via email. Some of the invoices are emailed to the Executive Director, who approves them by giving instructions regarding payment. Both invoice/payments questioned had extensive email documentation, which was provided to Ron Beaulieu on 10/21/2024.
Auditors’ Evaluation of Views of Responsible Officials: Management’s Response is in conflict with above Statement of Condition, Criteria, and Cause.
2023-003 Surveys, Studies, Investigations, Demonstrations, and Training Grants and Cooperative – Assistance Listing No. 66.436; Grant No.84039801, 84039601,94039501; Grant Period – Year ended December 31, 2023.
Statement of Condition: Compliance over subrecipient monitoring. Entity did identify the award and applicable requirements, however entity did not evaluate each subrecipient’s risk of noncompliance nor did it monitor subrecipient activities as listed in the contracts “Subaward Performance Reporting” and monitoring procedures per 2 CFR Sections 200.332 (b) and (d) through (f).
Criteria: National Association of Wetland Managers’ internal control policies and procedures, and the Uniform Guidance 2 CFR Sections 200.332 (b) and (d)-(f).
Cause: Management’s lack of understanding of criteria.
Effect: Non-compliance.
Questioned Costs: Not identified.
Perspective: N/A.
Identification: Non-repeat.
Recommendation: Management should review above criteria, and implement required procedures.
Views of Responsible Officials: NAWM disagrees with the statement of condition and is submitting documentation for NAWM’s activities regarding monitoring procedures per 2 CFR Sections 200.332 (d) through (f) for Assistance Listing No. 66.436; Grant No. 84039801, 84039601, 94039501; Grant Period – Year ended December 31, 2023. Each grant has its own documentation letter addressing each element listed above in its file submitted. A copy of each subawardee’s NICRA is included in their respective files as well as copies of audit findings for each subawardee. Additionally, each subawardee has been awarded federal grants by the U.S EPA and other federal agencies in the past which they have completed successfully. All of these factors, including the information collected on each subaward contract which contain a lot of the required information, and including a search online of the SAM.gov status of each entity, was used to determine any potential risk of noncompliance and no risk was identified by either NAWM or EPA.
Auditors’ Evaluation of Views of Responsible Officials: Management’s Response is in conflict with above Statement of Condition, Criteria, and Cause.
2023-004 Surveys, Studies, Investigations, Demonstrations, and Training Grants and Cooperative – Assistance Listing No. 66.436; Grant No.84039801, 84039601, 94039501; Grant Period – Year ended December 31, 2023.
Statement of Condition: Internal control weakness over subrecipient monitoring. Ineffective control procedures over subrecipient monitoring.
Criteria: National Association of Wetland Managers’ internal control policies and procedures and the Uniform Guidance.
Cause: Oversight
Effect: Increased risk of noncompliance.
Questioned Costs: Not identified.
Perspective: N/A.
Identification: Non-repeat.
Recommendation: Management should review above criteria, and modify control or perform control procedures.
Views of Responsible Officials: NAWM has draft sub recipient monitoring documents available that were drafted in 2021 in anticipation of having subawardees for the grants awarded in 2022. However, as has been explained to Ron Beaulieu, we did not finalize them because our EPA project officer assured NAWM in a phone conversation that our project partners were not technically considered sub awardees and therefore were not subject to OMB sub award policies. It is clear now that NAWM was given incorrect information. The draft documents are in the submitted files. NAWM has already started to finalize those policies and procedures now that we have the corrected information regarding subawardee status.
NAWM’s standard operating procedures for monitoring progress and activities related to each grant on our grants include regular meetings, frequent communications with our Project Officer, and submission of quarterly progress reports. For the awards with subawardees, they were active participants in all of these activities. Specific activities to monitor project progress include:
• Monthly calls with whole project team (NAWM, subawardee, project officer)
• Monthly calls with project advisory committee (including project team)
• NAWM is in continual contact with subawardees and project officer. During regular meetings we discuss project progress and status of each project component, and take notes to document our discussion.
• Progress reports are required with each invoice submitted by each subawardee, examples of which are included in each subawardee folder.
• NAWM also submits quarterly progress reports on each grant to EPA.
Auditors’ Evaluation of Views of Responsible Officials: We agree that NAWM should finalize
subrecipient policies and procedures. NAWM should also implement these policies immediately. However, the specific activities listed in the second paragraph of management’s response are in conflict with above Statement of Condition. Those activities address project progress, not NAWM’s internal control procedures over subrecipient compliance.
2023-001 Surveys, Studies, Investigations, Demonstrations, and Training Grants and Cooperative – Assistance Listing No. 66.436; Grant No.84039801, 84039601,94039501; Grant Period – Year ended December 31, 2023.
Statement of Condition: Compliance over allowable cost, including application of the indirect cost rate supplied by the United States Department of the Interior. Approved provisional rate of 26.3% not used. Instead, allocation based upon prior month’s payroll.
Criteria: The Uniform Guidance, indirect cost negotiation agreement, and National Association of Wetland Managers’ internal control policies and procedures.
Cause: Management’s misunderstanding of accounting application of the provisional rate method.
Effect: Under/over charging of indirect cost.
Questioned Costs: Not identified.
Perspective: N/A.
Identification: Non-repeat.
Recommendation: Obtain professional accounting training in proper accounting for indirect cost utilizing a provisional/final rate method.
Views of Responsible Officials: The indirect cost rates contained are for use on grants, contracts, and other agreements with the Federal Government. The rates are negotiated by the U.S. Department of the Interior, Interior Business Center, and NAWM every year in accordance with the authority contained in applicable regulations.
The negotiated Indirect cost rates are provided to the Funding Agency at the time when the project budget is developed. Subsequent billing of the indirect cost is based on the time spent on the project.
Base: Total direct salaries and wages, including fringe benefits. All other program costs are eliminated from the calculation.
Treatment of fringe benefits: Fringe benefits applicable to direct salaries and wages are treated as direct costs; fringe benefits applicable to indirect salaries and wages are treated as indirect costs.
Treatment of paid absences: Vacation, holiday, sick leave, and other paid absences are included in salaries and wages and are claimed on grants, contracts, and other agreements as part of the normal cost for the salaries and wages.
Provisional/Final Rate: Within six (6) months after year end, a final indirect cost rate proposal is submitted based on actual costs. Billings and charges to contracts and grants are adjusted if the final rate varies from the provisional rate. If the final rate is greater than the provisional rate and there are no funds available to cover the additional indirect costs, NAWM may not recover all indirect costs. Conversely, if the final rate is less than the provisional rate, NAWM is required to pay back the difference to the funding agency.
All of our federal grants are multiyear and indirect cost is adjusted accordingly.
Record Keeping: NAWM maintains accounting records that demonstrate that each type of cost has been treated consistently, either as a direct cost or an indirect cost. Records pertaining to the costs of program administration, such as salaries, travel, and related costs, are kept on an annual basis.
Auditors’ Evaluation of Views of Responsible Officials: Management’s Response is in conflict with above Statement of Condition, Criteria, and Cause.
2023-002 Surveys, Studies, Investigations, Demonstrations, and Training Grants and Cooperative – Assistance Listing No. 66.436; Grant No.84039801, 84039601,94039501; Grant Period – Year ended December 31, 2023.
Statement of Condition: Internal control weakness - documentation of approval over allowable costs could not be located for select expenses, and ineffective control procedures over posting of approved indirect cost rate allocation.
Criteria: National Association of Wetland Managers’ internal control policies and procedures, indirect cost negotiation agreement, and the Uniform Guidance.
Cause: Procedures are in place requiring supervisory approval of documentation before costs are coded to grants, but procedures were not performed on all invoices. Also, ineffective control procedures over posting of indirect payroll cost allocation as indicated by compliance finding.
Effect: Increased risk of noncompliance.
Questioned Costs: Not identified.
Perspective: N/A.
Identification: Non-repeat.
Recommendation: Management should review above criteria and modify control or perform control procedures.
Views of Responsible Officials: Approval of allowable cost has been addressed via email. Some of the invoices are emailed to the Executive Director, who approves them by giving instructions regarding payment. Both invoice/payments questioned had extensive email documentation, which was provided to Ron Beaulieu on 10/21/2024.
Auditors’ Evaluation of Views of Responsible Officials: Management’s Response is in conflict with above Statement of Condition, Criteria, and Cause.
2023-003 Surveys, Studies, Investigations, Demonstrations, and Training Grants and Cooperative – Assistance Listing No. 66.436; Grant No.84039801, 84039601,94039501; Grant Period – Year ended December 31, 2023.
Statement of Condition: Compliance over subrecipient monitoring. Entity did identify the award and applicable requirements, however entity did not evaluate each subrecipient’s risk of noncompliance nor did it monitor subrecipient activities as listed in the contracts “Subaward Performance Reporting” and monitoring procedures per 2 CFR Sections 200.332 (b) and (d) through (f).
Criteria: National Association of Wetland Managers’ internal control policies and procedures, and the Uniform Guidance 2 CFR Sections 200.332 (b) and (d)-(f).
Cause: Management’s lack of understanding of criteria.
Effect: Non-compliance.
Questioned Costs: Not identified.
Perspective: N/A.
Identification: Non-repeat.
Recommendation: Management should review above criteria, and implement required procedures.
Views of Responsible Officials: NAWM disagrees with the statement of condition and is submitting documentation for NAWM’s activities regarding monitoring procedures per 2 CFR Sections 200.332 (d) through (f) for Assistance Listing No. 66.436; Grant No. 84039801, 84039601, 94039501; Grant Period – Year ended December 31, 2023. Each grant has its own documentation letter addressing each element listed above in its file submitted. A copy of each subawardee’s NICRA is included in their respective files as well as copies of audit findings for each subawardee. Additionally, each subawardee has been awarded federal grants by the U.S EPA and other federal agencies in the past which they have completed successfully. All of these factors, including the information collected on each subaward contract which contain a lot of the required information, and including a search online of the SAM.gov status of each entity, was used to determine any potential risk of noncompliance and no risk was identified by either NAWM or EPA.
Auditors’ Evaluation of Views of Responsible Officials: Management’s Response is in conflict with above Statement of Condition, Criteria, and Cause.
2023-004 Surveys, Studies, Investigations, Demonstrations, and Training Grants and Cooperative – Assistance Listing No. 66.436; Grant No.84039801, 84039601, 94039501; Grant Period – Year ended December 31, 2023.
Statement of Condition: Internal control weakness over subrecipient monitoring. Ineffective control procedures over subrecipient monitoring.
Criteria: National Association of Wetland Managers’ internal control policies and procedures and the Uniform Guidance.
Cause: Oversight
Effect: Increased risk of noncompliance.
Questioned Costs: Not identified.
Perspective: N/A.
Identification: Non-repeat.
Recommendation: Management should review above criteria, and modify control or perform control procedures.
Views of Responsible Officials: NAWM has draft sub recipient monitoring documents available that were drafted in 2021 in anticipation of having subawardees for the grants awarded in 2022. However, as has been explained to Ron Beaulieu, we did not finalize them because our EPA project officer assured NAWM in a phone conversation that our project partners were not technically considered sub awardees and therefore were not subject to OMB sub award policies. It is clear now that NAWM was given incorrect information. The draft documents are in the submitted files. NAWM has already started to finalize those policies and procedures now that we have the corrected information regarding subawardee status.
NAWM’s standard operating procedures for monitoring progress and activities related to each grant on our grants include regular meetings, frequent communications with our Project Officer, and submission of quarterly progress reports. For the awards with subawardees, they were active participants in all of these activities. Specific activities to monitor project progress include:
• Monthly calls with whole project team (NAWM, subawardee, project officer)
• Monthly calls with project advisory committee (including project team)
• NAWM is in continual contact with subawardees and project officer. During regular meetings we discuss project progress and status of each project component, and take notes to document our discussion.
• Progress reports are required with each invoice submitted by each subawardee, examples of which are included in each subawardee folder.
• NAWM also submits quarterly progress reports on each grant to EPA.
Auditors’ Evaluation of Views of Responsible Officials: We agree that NAWM should finalize
subrecipient policies and procedures. NAWM should also implement these policies immediately. However, the specific activities listed in the second paragraph of management’s response are in conflict with above Statement of Condition. Those activities address project progress, not NAWM’s internal control procedures over subrecipient compliance.