Audit 360132

Criteria or Specific Requirement – Management is required to ensure that there are sufficient internal controls in place over payroll costs charged to the program. This includes internal controls that ensure that all supporting documentation is retained to demonstrate compliance. Conditions – Documentation supporting employee costs charged to the program was unavailable or incomplete for some selections. Context – During our testing of allowable costs and activities, we selected two employees for payroll testing. For each employee selected, we were able to verify the validity of the employee. However, we were not able to validate the approved rate of pay. Cause – For periods for which payroll records were not available, the Organization was using a different payroll process system. As a result, such records could no longer be accessed. Effect – Complete documentation to support certain payroll transactions was not available. We were able to verify the existence of the employee. We were also able to verify that the amounts charged were reasonable based on the nature of the program as well as subsequent activity. As a result, we considered the total costs charged to the program to be reasonable. However, internal controls were not in place related to the proper retention of records. Views of Responsible Officials and Planned Corrective Actions — Management agrees with the finding and in the future will take steps to retain or insure that access to records continues to be available.

Criteria or Specific Requirement – Per 2 CFR §180.300 and §200.214, non-federal entities are prohibited from entering into covered transactions (e.g., contracts or subawards expected to equal or exceed $25,000) with parties that are suspended, debarred, or otherwise excluded from participation in federal programs. Conditions – Verification of SAMS.gov vendors was not performed. Context – During our testing of procurement, we sampled nine expenditures totaling $367,163. The total population of procurement expenditures charged to the program was $800,000. We noted that all nine selections of expenditures did not have SAMS.gov verification documentation. Cause – The Association did not have a formal process or checklist to ensure that vendors were checked against the SAM.gov exclusion list before contract award. Procurement staff were not trained on this requirement. Effect – Use of non-approved vendors could have occurred. However, as part our audit procedures, we determined that the expenditures were made with contractors which were not suspended or disbarred and were approved on the SAMS.gov website. Recommendation – We recommend the Association implement a formal policy and procedure to verify all vendors against SAM.gov for covered transactions exceeding $25,000. Staff responsible for federal procurement should be trained, and documentation of vendor status verification should be retained with procurement records. Views of Responsible Officials and Planned Corrective Actions – Procurement Policy was updated and documentation will be maintained to support vendor verification in the future.

Criteria or Specific Requirement – Under 2 CFR §200.320(a), micro-purchase procedures may be used for procurements up to the micro-purchase threshold (currently $10,000). Purchases must be distributed equitably among qualified suppliers when practical, and the price must be reasonable. Entities must follow their internal controls and maintain documentation supporting the rationale for the purchase and vendor selection. Conditions – Bids for some vendors was not performed. Context – During our testing of procurement, we sampled nine expenditures. Of the nine selections three selections did not have required bids. Cause – The Association lacks formal procedures to ensure micro-purchase requirements are met, and staff were not aware of the requirement to document price reasonableness or distribute purchases equitably among vendors. Effect – Higher than necessary costs may be have expensed.Recommendation – We recommend that management revise policies to ensure proper vendor compliance in the future. Views of Responsible Officials and Planned Corrective Actions – Procurement Policy was updated and documentation will be maintained to support vendor verification in the future.

Criteria or Specific Requirement – Recipients of federal awards are required to submit accurate, complete, and timely financial and performance reports as specified in the terms and conditions of the award. Conditions – Required program reporting was not followed. Context – During our testing of reporting, we noted two required semi-annual progression reports were not completed for the June 2023 through June 2024 period. Additionally, approval for budget change was not obtained prior to submission of expense reports for reimbursement. Cause – The delays resulted from a lack of internal tracking mechanisms for report deadlines. Effect – Noncompliance with federal reporting requirements may hinder federal oversight, delay reimbursements, and expose the Association potential enforcement actions or funding restrictions.. Recommendation – We recommend that management ensure that all grant reporting is tracked to ensure future compliance. Views of Responsible Officials and Planned Corrective Actions – Reporting requirements will be tracked to support requirements in the future.

Criteria or Specific Requirement – Management is required to ensure that there are sufficient internal controls in place over payroll costs charged to the program. This includes internal controls that ensure that all supporting documentation is retained to demonstrate compliance. Conditions – Documentation supporting employee costs charged to the program was unavailable or incomplete for some selections. Context – During our testing of allowable costs and activities, we selected two employees for payroll testing. For each employee selected, we were able to verify the validity of the employee. However, we were not able to validate the approved rate of pay. Cause – For periods for which payroll records were not available, the Organization was using a different payroll process system. As a result, such records could no longer be accessed. Effect – Complete documentation to support certain payroll transactions was not available. We were able to verify the existence of the employee. We were also able to verify that the amounts charged were reasonable based on the nature of the program as well as subsequent activity. As a result, we considered the total costs charged to the program to be reasonable. However, internal controls were not in place related to the proper retention of records. Views of Responsible Officials and Planned Corrective Actions — Management agrees with the finding and in the future will take steps to retain or insure that access to records continues to be available.

Criteria or Specific Requirement – Per 2 CFR §180.300 and §200.214, non-federal entities are prohibited from entering into covered transactions (e.g., contracts or subawards expected to equal or exceed $25,000) with parties that are suspended, debarred, or otherwise excluded from participation in federal programs. Conditions – Verification of SAMS.gov vendors was not performed. Context – During our testing of procurement, we sampled nine expenditures totaling $367,163. The total population of procurement expenditures charged to the program was $800,000. We noted that all nine selections of expenditures did not have SAMS.gov verification documentation. Cause – The Association did not have a formal process or checklist to ensure that vendors were checked against the SAM.gov exclusion list before contract award. Procurement staff were not trained on this requirement. Effect – Use of non-approved vendors could have occurred. However, as part our audit procedures, we determined that the expenditures were made with contractors which were not suspended or disbarred and were approved on the SAMS.gov website. Recommendation – We recommend the Association implement a formal policy and procedure to verify all vendors against SAM.gov for covered transactions exceeding $25,000. Staff responsible for federal procurement should be trained, and documentation of vendor status verification should be retained with procurement records. Views of Responsible Officials and Planned Corrective Actions – Procurement Policy was updated and documentation will be maintained to support vendor verification in the future.

Criteria or Specific Requirement – Under 2 CFR §200.320(a), micro-purchase procedures may be used for procurements up to the micro-purchase threshold (currently $10,000). Purchases must be distributed equitably among qualified suppliers when practical, and the price must be reasonable. Entities must follow their internal controls and maintain documentation supporting the rationale for the purchase and vendor selection. Conditions – Bids for some vendors was not performed. Context – During our testing of procurement, we sampled nine expenditures. Of the nine selections three selections did not have required bids. Cause – The Association lacks formal procedures to ensure micro-purchase requirements are met, and staff were not aware of the requirement to document price reasonableness or distribute purchases equitably among vendors. Effect – Higher than necessary costs may be have expensed.Recommendation – We recommend that management revise policies to ensure proper vendor compliance in the future. Views of Responsible Officials and Planned Corrective Actions – Procurement Policy was updated and documentation will be maintained to support vendor verification in the future.

Criteria or Specific Requirement – Recipients of federal awards are required to submit accurate, complete, and timely financial and performance reports as specified in the terms and conditions of the award. Conditions – Required program reporting was not followed. Context – During our testing of reporting, we noted two required semi-annual progression reports were not completed for the June 2023 through June 2024 period. Additionally, approval for budget change was not obtained prior to submission of expense reports for reimbursement. Cause – The delays resulted from a lack of internal tracking mechanisms for report deadlines. Effect – Noncompliance with federal reporting requirements may hinder federal oversight, delay reimbursements, and expose the Association potential enforcement actions or funding restrictions.. Recommendation – We recommend that management ensure that all grant reporting is tracked to ensure future compliance. Views of Responsible Officials and Planned Corrective Actions – Reporting requirements will be tracked to support requirements in the future.