Audit 364224

Finding 2024-002: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Procurement and Suspension and Debarment Criteria: Per Title 2 U.S. Code of Federal Regulations (CPR) Part 200, Subpart D, section 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement and suspension and debarment. Condition: During our testing of internal controls over compliance related to procurement and suspension and debarment, we identified vendors/ contractors that were awarded without required procurement and suspension and debarment documentation. Although there was no documentation to support this verification being performed prior to the payment, we noted that the vendors/contractors were not suspended or debarred. Questioned Costs: None. Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with the procurement and suspension and debarment provisions as prescribed in the CFR. Recommendation: We recommend that EWB-USA implement procedures and controls to ensure that the approval of contractors or vendors are adequately supported by sufficient documentation and detail. In addition, this documentation should be retained, at a minimum, through the completion of the contract. Response: 1. Develop procurement procedures for procurement transactions under Federal awards or subawards, including verification that a potential subrecipient is not suspended, debarred, or otherwise excluded from receiving Federal funds. 2. Provide training to relevant staff on the new procedures for procurement transactions including the verification of suspension and debarment for any subrecipient awards and the importance of compliance with federal regulations.

Finding 2024-003: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: 2 CFR 200, subpart E, requires indirect costs to be accorded consistent and equitable treatment to all federal and non-federal awards. Condition: The indirect cost rates calculated and utilized by EWB-USA were in excess of both the provisional and approved rates allowable by the federal awards. Effect: EWB-USA requested and received reimbursement from federal awards that exceeded allowable indirect costs limits. Questioned Costs: $40,258 Context: To determine the amount of indirect costs to be billed under the agreement, direct salaries and wages and related fringe benefits should be summed and multiplied by the rate. All other program costs should be eliminated from the calculation. During our testing of indirect costs, we identified the approved provisional rate was not applied correctly as other program costs were included in the calculation. Additionally, the indirect cost basis used to negotiate the indirect costs rate was not based upon an equitable distribution to all federal and non-federal programs. Cause: EWB-USA included other program costs when calculating the amount of the indirect costs to be billed. Additionally, EWB-USA did not have controls in place to ensure the indirect cost rate methodology utilized when submitting to the federal agency was an equitable distribution to all federal and non-federal programs. Recommendation: We recommend EWB-USA implement procedures to ensure the approved provisional rate is properly applied to the correct direct costs when calculating the amount of indirect costsResponse: to be billed. Additionally, we recommend EWB-USA revise its indirect cost methodology submitted for approval to determine an equitable distribution to all federal and non-federal programs. 1. Review and revise existing policies and procedures for the application of indirect rates with the appropriate oversight by the Finance/ Accounting department across federal grants to ensure accuracy and compliance with relevant regulations. 2. Review the allowable indirect rate methodologies to ensure the method used is based upon an equitable distribution across federal and non-federal programs. 3. Provide training to relevant staff on the revised policies, procedures to ensure the proper application of the indirect rate and calculation of indirect costs.

Finding 2024-004: 10. 761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Subrecipient Monitoring Criteria: Per Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Subpart D, section 200.332, the non-Federal entity must determine the subrecipient is not excluded or debarred or otherwise excluded from receiving Federal funds, as well as develop written subrecipient monitoring policies and procedures. Condition: During our testing of internal controls over compliance related to subrecipient monitoring, we identified EWB-USA did not have written subrecipient monitoring policies or procedures in place, nor determine that the subrecipient was not suspended or debarred or otherwise excluded from receiving Federal funds. Additionally, EWB-USA did not obtain a copy of the subrecipient's Uniform Guidance compliance audit. Questioned Costs: None. Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with the subrecipient monitoring provisions as prescribed in the Uniform Guidance. Recommendation: We recommend that EWB-USA adopt formal, written subrecipient monitoring policies and procedures the comply with the Uniform Guidance. Response: 1. Develop a policy for subrecipient monitoring, and implement procedures to oversee the programmatic and financial activities of subrecipients and ensure compliance with regulations. 2. Develop a standardized checklist to guide the monitoring of subrecipients. 3. Provide training to relevant staff on the new procedures for subrecipient monitoring and the importance of compliance with federal regulations.

Finding 2024-005: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Reporting Criteria: Per Federal Funding Accountability and Transparency Act Code of Federal Regulations (CFR) Part 170, recipients of grants are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: During our testing of internal controls over compliance related to reporting, we noted EWB-USA only had one subaward during the year ended December 31, 2024, in the amount of$209,589. EWB-USA did not report the subaward information to the FSRS and accordingly failed to comply with reporting requirements and key data elements. Questioned Costs: None Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with reporting subaward data through FSRS as prescribed in the Uniform Guidance. Recommendation: We recommend that EWB-USA implement procedures and controls to ensure that subawards of $30,000 or more are properly reported to the FSRS in a timely manner. Response: 1. Develop policies for subaward reporting, and implement reporting procedures including FFAT A (Federal Funding Accountability and Transparency Act) subaward reporting requirements for awards exceeding the required threshold. 2. Provide training to relevant staff on the new procedures for subaward reporting and the importance of compliance with federal regulations.

Finding 2024-002: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Procurement and Suspension and Debarment Criteria: Per Title 2 U.S. Code of Federal Regulations (CPR) Part 200, Subpart D, section 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement and suspension and debarment. Condition: During our testing of internal controls over compliance related to procurement and suspension and debarment, we identified vendors/ contractors that were awarded without required procurement and suspension and debarment documentation. Although there was no documentation to support this verification being performed prior to the payment, we noted that the vendors/contractors were not suspended or debarred. Questioned Costs: None. Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with the procurement and suspension and debarment provisions as prescribed in the CFR. Recommendation: We recommend that EWB-USA implement procedures and controls to ensure that the approval of contractors or vendors are adequately supported by sufficient documentation and detail. In addition, this documentation should be retained, at a minimum, through the completion of the contract. Response: 1. Develop procurement procedures for procurement transactions under Federal awards or subawards, including verification that a potential subrecipient is not suspended, debarred, or otherwise excluded from receiving Federal funds. 2. Provide training to relevant staff on the new procedures for procurement transactions including the verification of suspension and debarment for any subrecipient awards and the importance of compliance with federal regulations.

Finding 2024-003: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: 2 CFR 200, subpart E, requires indirect costs to be accorded consistent and equitable treatment to all federal and non-federal awards. Condition: The indirect cost rates calculated and utilized by EWB-USA were in excess of both the provisional and approved rates allowable by the federal awards. Effect: EWB-USA requested and received reimbursement from federal awards that exceeded allowable indirect costs limits. Questioned Costs: $40,258 Context: To determine the amount of indirect costs to be billed under the agreement, direct salaries and wages and related fringe benefits should be summed and multiplied by the rate. All other program costs should be eliminated from the calculation. During our testing of indirect costs, we identified the approved provisional rate was not applied correctly as other program costs were included in the calculation. Additionally, the indirect cost basis used to negotiate the indirect costs rate was not based upon an equitable distribution to all federal and non-federal programs. Cause: EWB-USA included other program costs when calculating the amount of the indirect costs to be billed. Additionally, EWB-USA did not have controls in place to ensure the indirect cost rate methodology utilized when submitting to the federal agency was an equitable distribution to all federal and non-federal programs. Recommendation: We recommend EWB-USA implement procedures to ensure the approved provisional rate is properly applied to the correct direct costs when calculating the amount of indirect costsResponse: to be billed. Additionally, we recommend EWB-USA revise its indirect cost methodology submitted for approval to determine an equitable distribution to all federal and non-federal programs. 1. Review and revise existing policies and procedures for the application of indirect rates with the appropriate oversight by the Finance/ Accounting department across federal grants to ensure accuracy and compliance with relevant regulations. 2. Review the allowable indirect rate methodologies to ensure the method used is based upon an equitable distribution across federal and non-federal programs. 3. Provide training to relevant staff on the revised policies, procedures to ensure the proper application of the indirect rate and calculation of indirect costs.

Finding 2024-004: 10. 761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Subrecipient Monitoring Criteria: Per Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Subpart D, section 200.332, the non-Federal entity must determine the subrecipient is not excluded or debarred or otherwise excluded from receiving Federal funds, as well as develop written subrecipient monitoring policies and procedures. Condition: During our testing of internal controls over compliance related to subrecipient monitoring, we identified EWB-USA did not have written subrecipient monitoring policies or procedures in place, nor determine that the subrecipient was not suspended or debarred or otherwise excluded from receiving Federal funds. Additionally, EWB-USA did not obtain a copy of the subrecipient's Uniform Guidance compliance audit. Questioned Costs: None. Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with the subrecipient monitoring provisions as prescribed in the Uniform Guidance. Recommendation: We recommend that EWB-USA adopt formal, written subrecipient monitoring policies and procedures the comply with the Uniform Guidance. Response: 1. Develop a policy for subrecipient monitoring, and implement procedures to oversee the programmatic and financial activities of subrecipients and ensure compliance with regulations. 2. Develop a standardized checklist to guide the monitoring of subrecipients. 3. Provide training to relevant staff on the new procedures for subrecipient monitoring and the importance of compliance with federal regulations.

Finding 2024-005: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Reporting Criteria: Per Federal Funding Accountability and Transparency Act Code of Federal Regulations (CFR) Part 170, recipients of grants are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: During our testing of internal controls over compliance related to reporting, we noted EWB-USA only had one subaward during the year ended December 31, 2024, in the amount of$209,589. EWB-USA did not report the subaward information to the FSRS and accordingly failed to comply with reporting requirements and key data elements. Questioned Costs: None Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with reporting subaward data through FSRS as prescribed in the Uniform Guidance. Recommendation: We recommend that EWB-USA implement procedures and controls to ensure that subawards of $30,000 or more are properly reported to the FSRS in a timely manner. Response: 1. Develop policies for subaward reporting, and implement reporting procedures including FFAT A (Federal Funding Accountability and Transparency Act) subaward reporting requirements for awards exceeding the required threshold. 2. Provide training to relevant staff on the new procedures for subaward reporting and the importance of compliance with federal regulations.

Finding 2024-002: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Procurement and Suspension and Debarment Criteria: Per Title 2 U.S. Code of Federal Regulations (CPR) Part 200, Subpart D, section 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement and suspension and debarment. Condition: During our testing of internal controls over compliance related to procurement and suspension and debarment, we identified vendors/ contractors that were awarded without required procurement and suspension and debarment documentation. Although there was no documentation to support this verification being performed prior to the payment, we noted that the vendors/contractors were not suspended or debarred. Questioned Costs: None. Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with the procurement and suspension and debarment provisions as prescribed in the CFR. Recommendation: We recommend that EWB-USA implement procedures and controls to ensure that the approval of contractors or vendors are adequately supported by sufficient documentation and detail. In addition, this documentation should be retained, at a minimum, through the completion of the contract. Response: 1. Develop procurement procedures for procurement transactions under Federal awards or subawards, including verification that a potential subrecipient is not suspended, debarred, or otherwise excluded from receiving Federal funds. 2. Provide training to relevant staff on the new procedures for procurement transactions including the verification of suspension and debarment for any subrecipient awards and the importance of compliance with federal regulations.

Finding 2024-003: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: 2 CFR 200, subpart E, requires indirect costs to be accorded consistent and equitable treatment to all federal and non-federal awards. Condition: The indirect cost rates calculated and utilized by EWB-USA were in excess of both the provisional and approved rates allowable by the federal awards. Effect: EWB-USA requested and received reimbursement from federal awards that exceeded allowable indirect costs limits. Questioned Costs: $40,258 Context: To determine the amount of indirect costs to be billed under the agreement, direct salaries and wages and related fringe benefits should be summed and multiplied by the rate. All other program costs should be eliminated from the calculation. During our testing of indirect costs, we identified the approved provisional rate was not applied correctly as other program costs were included in the calculation. Additionally, the indirect cost basis used to negotiate the indirect costs rate was not based upon an equitable distribution to all federal and non-federal programs. Cause: EWB-USA included other program costs when calculating the amount of the indirect costs to be billed. Additionally, EWB-USA did not have controls in place to ensure the indirect cost rate methodology utilized when submitting to the federal agency was an equitable distribution to all federal and non-federal programs. Recommendation: We recommend EWB-USA implement procedures to ensure the approved provisional rate is properly applied to the correct direct costs when calculating the amount of indirect costsResponse: to be billed. Additionally, we recommend EWB-USA revise its indirect cost methodology submitted for approval to determine an equitable distribution to all federal and non-federal programs. 1. Review and revise existing policies and procedures for the application of indirect rates with the appropriate oversight by the Finance/ Accounting department across federal grants to ensure accuracy and compliance with relevant regulations. 2. Review the allowable indirect rate methodologies to ensure the method used is based upon an equitable distribution across federal and non-federal programs. 3. Provide training to relevant staff on the revised policies, procedures to ensure the proper application of the indirect rate and calculation of indirect costs.

Finding 2024-004: 10. 761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Subrecipient Monitoring Criteria: Per Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Subpart D, section 200.332, the non-Federal entity must determine the subrecipient is not excluded or debarred or otherwise excluded from receiving Federal funds, as well as develop written subrecipient monitoring policies and procedures. Condition: During our testing of internal controls over compliance related to subrecipient monitoring, we identified EWB-USA did not have written subrecipient monitoring policies or procedures in place, nor determine that the subrecipient was not suspended or debarred or otherwise excluded from receiving Federal funds. Additionally, EWB-USA did not obtain a copy of the subrecipient's Uniform Guidance compliance audit. Questioned Costs: None. Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with the subrecipient monitoring provisions as prescribed in the Uniform Guidance. Recommendation: We recommend that EWB-USA adopt formal, written subrecipient monitoring policies and procedures the comply with the Uniform Guidance. Response: 1. Develop a policy for subrecipient monitoring, and implement procedures to oversee the programmatic and financial activities of subrecipients and ensure compliance with regulations. 2. Develop a standardized checklist to guide the monitoring of subrecipients. 3. Provide training to relevant staff on the new procedures for subrecipient monitoring and the importance of compliance with federal regulations.

Finding 2024-005: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Reporting Criteria: Per Federal Funding Accountability and Transparency Act Code of Federal Regulations (CFR) Part 170, recipients of grants are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: During our testing of internal controls over compliance related to reporting, we noted EWB-USA only had one subaward during the year ended December 31, 2024, in the amount of$209,589. EWB-USA did not report the subaward information to the FSRS and accordingly failed to comply with reporting requirements and key data elements. Questioned Costs: None Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with reporting subaward data through FSRS as prescribed in the Uniform Guidance. Recommendation: We recommend that EWB-USA implement procedures and controls to ensure that subawards of $30,000 or more are properly reported to the FSRS in a timely manner. Response: 1. Develop policies for subaward reporting, and implement reporting procedures including FFAT A (Federal Funding Accountability and Transparency Act) subaward reporting requirements for awards exceeding the required threshold. 2. Provide training to relevant staff on the new procedures for subaward reporting and the importance of compliance with federal regulations.

Finding 2024-002: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Procurement and Suspension and Debarment Criteria: Per Title 2 U.S. Code of Federal Regulations (CPR) Part 200, Subpart D, section 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement and suspension and debarment. Condition: During our testing of internal controls over compliance related to procurement and suspension and debarment, we identified vendors/ contractors that were awarded without required procurement and suspension and debarment documentation. Although there was no documentation to support this verification being performed prior to the payment, we noted that the vendors/contractors were not suspended or debarred. Questioned Costs: None. Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with the procurement and suspension and debarment provisions as prescribed in the CFR. Recommendation: We recommend that EWB-USA implement procedures and controls to ensure that the approval of contractors or vendors are adequately supported by sufficient documentation and detail. In addition, this documentation should be retained, at a minimum, through the completion of the contract. Response: 1. Develop procurement procedures for procurement transactions under Federal awards or subawards, including verification that a potential subrecipient is not suspended, debarred, or otherwise excluded from receiving Federal funds. 2. Provide training to relevant staff on the new procedures for procurement transactions including the verification of suspension and debarment for any subrecipient awards and the importance of compliance with federal regulations.

Finding 2024-003: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: 2 CFR 200, subpart E, requires indirect costs to be accorded consistent and equitable treatment to all federal and non-federal awards. Condition: The indirect cost rates calculated and utilized by EWB-USA were in excess of both the provisional and approved rates allowable by the federal awards. Effect: EWB-USA requested and received reimbursement from federal awards that exceeded allowable indirect costs limits. Questioned Costs: $40,258 Context: To determine the amount of indirect costs to be billed under the agreement, direct salaries and wages and related fringe benefits should be summed and multiplied by the rate. All other program costs should be eliminated from the calculation. During our testing of indirect costs, we identified the approved provisional rate was not applied correctly as other program costs were included in the calculation. Additionally, the indirect cost basis used to negotiate the indirect costs rate was not based upon an equitable distribution to all federal and non-federal programs. Cause: EWB-USA included other program costs when calculating the amount of the indirect costs to be billed. Additionally, EWB-USA did not have controls in place to ensure the indirect cost rate methodology utilized when submitting to the federal agency was an equitable distribution to all federal and non-federal programs. Recommendation: We recommend EWB-USA implement procedures to ensure the approved provisional rate is properly applied to the correct direct costs when calculating the amount of indirect costsResponse: to be billed. Additionally, we recommend EWB-USA revise its indirect cost methodology submitted for approval to determine an equitable distribution to all federal and non-federal programs. 1. Review and revise existing policies and procedures for the application of indirect rates with the appropriate oversight by the Finance/ Accounting department across federal grants to ensure accuracy and compliance with relevant regulations. 2. Review the allowable indirect rate methodologies to ensure the method used is based upon an equitable distribution across federal and non-federal programs. 3. Provide training to relevant staff on the revised policies, procedures to ensure the proper application of the indirect rate and calculation of indirect costs.

Finding 2024-004: 10. 761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Subrecipient Monitoring Criteria: Per Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Subpart D, section 200.332, the non-Federal entity must determine the subrecipient is not excluded or debarred or otherwise excluded from receiving Federal funds, as well as develop written subrecipient monitoring policies and procedures. Condition: During our testing of internal controls over compliance related to subrecipient monitoring, we identified EWB-USA did not have written subrecipient monitoring policies or procedures in place, nor determine that the subrecipient was not suspended or debarred or otherwise excluded from receiving Federal funds. Additionally, EWB-USA did not obtain a copy of the subrecipient's Uniform Guidance compliance audit. Questioned Costs: None. Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with the subrecipient monitoring provisions as prescribed in the Uniform Guidance. Recommendation: We recommend that EWB-USA adopt formal, written subrecipient monitoring policies and procedures the comply with the Uniform Guidance. Response: 1. Develop a policy for subrecipient monitoring, and implement procedures to oversee the programmatic and financial activities of subrecipients and ensure compliance with regulations. 2. Develop a standardized checklist to guide the monitoring of subrecipients. 3. Provide training to relevant staff on the new procedures for subrecipient monitoring and the importance of compliance with federal regulations.

Finding 2024-005: 10.761 - U.S. Department of Agriculture - Water and Waste Technical Assistance and Training - Material Weakness Compliance Requirement: Reporting Criteria: Per Federal Funding Accountability and Transparency Act Code of Federal Regulations (CFR) Part 170, recipients of grants are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: During our testing of internal controls over compliance related to reporting, we noted EWB-USA only had one subaward during the year ended December 31, 2024, in the amount of$209,589. EWB-USA did not report the subaward information to the FSRS and accordingly failed to comply with reporting requirements and key data elements. Questioned Costs: None Cause: EWB-USA did not have adequate controls in place to ensure compliance with applicable federal requirements. Effect: EWB-USA was not in compliance with reporting subaward data through FSRS as prescribed in the Uniform Guidance. Recommendation: We recommend that EWB-USA implement procedures and controls to ensure that subawards of $30,000 or more are properly reported to the FSRS in a timely manner. Response: 1. Develop policies for subaward reporting, and implement reporting procedures including FFAT A (Federal Funding Accountability and Transparency Act) subaward reporting requirements for awards exceeding the required threshold. 2. Provide training to relevant staff on the new procedures for subaward reporting and the importance of compliance with federal regulations.