?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child and Adult Care Food program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 236 subrecipients receiving Federal grant agreements for the Child and Adult Care Food program. During 2021, there were 126 subrecipients and 110 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February of 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February of 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child and Adult Care Food program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not meet the maintenance of effort requirement for the 2021-2022 school year for the Supporting Effective Instruction program during the audit period. CRITERIA 34 CFR section 299.5a General. An LEA receiving funds under an applicable program listed in paragraph (b) of this section may receive its full allocation of funds only if the SEA finds that either the combined fiscal effort per student or the aggregate expenditures of State and local funds with respect to the provision of free public education in the LEA for the preceding fiscal year was not less than 90 percent of the combined fiscal effort per student or the aggregate expenditures for the second preceding fiscal year. SEC. 8521 of the Elementary and Secondary Education Act of 1965 (ESEA) (20 U.S.C. 7901) MAINTENANCE OF EFFORT. (a) IN GENERAL.?A local educational agency may receive funds under a covered program for any fiscal year only if the State educational agency finds that either the combined fiscal effort per student or the aggregate expenditures of the agency and the State with respect to the provision of free public education by the agency for the preceding fiscal year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding fiscal year, subject to the requirements of subsection (b). 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction indicated that a waiver for the maintenance of effort requirement for the 2021-2022 school year was received. However, they were unable to locate any documentation supporting the waiver. EFFECT The Department of Public Instruction is not in compliance with the 90% maintenance of effort requirement for the 2021-2022 school year. CONTEXT The Department of Public Instruction distributed $9,575,000 in Federal funds under the Supporting Effective Instruction program to 159 different school districts during the 2021-2022 school year. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure the maintenance of effort requirement is met in accordance with the Supporting Effective Instruction program guidelines. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not complete a risk assessment for any awards to subrecipients of the Supporting Effective Instruction program during the audit period. CRITERIA 2 CFR 200.332 ? states that all pass-through entities must: (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction overlooked completing subrecipient risk assessments due to the continued response of the COVID-19 pandemic. EFFECT Department of Public Instruction is not able to verify that subrecipients are compliant with Federal statutes, regulations, and terms and conditions of the subaward because there was no risk assessment completed for subrecipients in order to determine appropriate monitoring. CONTEXT The Department of Public Instruction distributed approximately $19,000,000 in Federal funds under the Supporting Effective Instruction program to 168 different subrecipients. While these subrecipients did receive monitoring procedures, no adjustments were made to individual subrecipients based on the results of risk assessments. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure subrecipient risk assessments are completed timely and used to determine the nature and extent of subrecipient monitoring for the Supporting Effective Instruction program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction (DPI) incorrectly included neglected or delinquent facilities as part of their Title IIA allocation to Local Educational Agencies (LEA). We selected a sample of 36 and identified a 100% error rate. The total known allocation error identified was $62,546.99. When projected against the population, the total projected error is $115,041.65. CRITERIA The Elementary and Secondary Education Act of 1965 (ESEA Section 2102(a)(1)) states, the State, acting through the State educational agency (DPI), shall award subgrants to eligible local educational agencies. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction was unaware that neglected and delinquent facilities could not be included in their Title IIA allocation calculations and on subrecipient's grant awards. EFFECT The Department did not comply with the allocation requirements to LEAs for Title IIA grants. CONTEXT The Department of Public Instruction allocated $9,503,744 in Federal funds to 183 school districts during the 2020-2021 school year and $9,603,024 in Federal funds to 170 school districts during the 2021-2022 school year. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure the Title IIA allocations are calculated based on the Federal requirements. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The NDDPI agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not complete any risk assessments for 3 of 5 subrecipients sampled and only completed a risk assessment once during our audit period for the other 2 sampled even though they received separate grants during each fiscal year. CRITERIA 2 CFR 200.332 (b) states "All pass-through entities must: Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency)." Department of Public Instruction awarded grants to subrecipients annually under this program. As such, a risk assessment should be completed annually for each subrecipient in which a new grant was awarded to them. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction did not complete risk assessments for subrecipients as the Comprehensive Literacy program had a high turnover of staff that were administering the program and the Department did not have this responsibility assigned to someone during parts of our audit period. EFFECT The Department of Public Instruction is not adjusting their subrecipient monitoring based on risk assessments completed for the subrecipients in compliance with Federal regulations. CONTEXT The Department of Public Instruction distributed approximately $23,250,000 in Federal funds under the Comprehensive Literacy program to 25 different local education agency subrecipients. While these subrecipients did receive monitoring procedures no adjustments were made to individual subrecipients based on results of risk assessments. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure risk assessments are completed for each grant their subrecipients receive and adjust monitoring procedures as necessary based on the results of these assessments. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Comprehensive Literacy program as all grant templates used did not include the subaward budget period start and end date. CRITERIA 2 CFR 200.332 states required information that pass-through entities must disclose to subrecipients, including paragraph (a)(1)(vi) "Subaward Budget Period State and End Date" 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Comprehensive Literacy Program did not update their grant templates to include a new requirement that was added to the relevant Federal codes and went into effect January 1, 2021. EFFECT Subrecipients may not have been made aware of all necessary grant information and requirements. CONTEXT The Comprehensively Literacy program grants subawards annually under each of the Federal grants it received under the program. During our audit period, there were 2 Federal awards granted out to subrecipients a total of 35 times each fiscal year. The grant agreements shared a template each year and it was found that all were missing a newly required piece of information after the relevant CFR was modified and an update went into effect on January 1, 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure that subrecipients are made aware of all required grant award information. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Comprehensive Literacy program in the 5 subawards tested out of a total 35 subawards issued during our audit period. 3 of the subawards tested were also submitted a month later than required by Federal regulations after funds were originally obligated in November of 2020 and the reports were not made until January of 2021. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A, prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also according to this regulation, prime awardees must report information about each obligating action per the instructions posted on the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award project description "Describes the sub-award project" with an added note to "be precise as possible" and "not use any abbreviations or acronyms." The sub-award number is defined as "This is the number used by the prime award to uniquely track the sub-award (their own numbering system for the sub-award)." The sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee". 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction submitted inaccurate information based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The Department also did not submit FFATA reports in a timely manner due to not recognizing that obligations were not made to subawardees until a month after reimbursement payments were made against the obligations. EFFECT Subaward information that is published to the USAspending.gov website was inaccurate and published later than required by Federal regulations. CONTEXT During our audit period the Department of Public Instruction (DPI) issued a total of 35 subawards to 20 unique subrecipients under the Comprehensive Literacy Program for sub-awardees that had obligations of $30,000 or more. DPI reported all of these sub-awards, totaling of $25.2 million, to the FSRS system. While it appears all required reports were submitted and DPI did report the information directly from their grant awards, some of the fields were reported using the wrong information in error for all of the sub-awards tested. DPI also did not report all of the subawards within the required time based on when they were originally awarded. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Education Stabilization Fund program Federal Funding Accountability and Transparency Act (FFATA) reporting. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A: prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also, according to this regulation, prime awardees must report information about each obligating action per the instructions posted in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee" and the data model also states that the amount of the sub-award is "The net dollar amount of Federal funds awarded to the Sub-awardee including modifications". Title 2 of the Code of Federal Regulations was updated to increase the subaward reporting requirement for grants from $25,000 to $30,000. Only subawards $30,000 or above require reports for prime grant awards as of November 12, 2020 as seen on the Final Registry - Guidance for Grants and Agreements - OMB Rule 85 FR 49506. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction (DPI) submitted inaccurate information and amounts based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. DPI also had a misunderstanding of the reporting threshold. EFFECT Subaward information that was reported was inaccurate and published later than required by Federal regulations. Subawards for ESSER I discretionary funds were not reported and two ESSER I awards were not reported. CONTEXT With 3 Federal grants, the Department of Public Instruction issued a total of 496 awards to 170 unique subrecipients for a total amount of $435,446,613.83 during our audit period of 7/1/2020-6/30/2022 that were susceptible to FFATA reporting. While it appears all required reports were submitted for ESSER II and ESSER III related awards, ESSER I discretionary fund awards did not get reported as well as any subrecipients that received more than $25,000 but less than $30,000. The ESSER I Federal Award also states that grants funded at $25,000 or more that meet the reporting conditions are to be reported. DPI did report the information directly from their grant awards, but DPI did not report all of the subawards within the required time based on when they were originally awarded. With ESSER III funds, DPI had to do some redistribution of funds causing their FFATA reporting to be overstated. DPI double-reported their awards instead of reporting the adjustment from the redistribution since the initial allocation was already reported. In our testing, the overstatement was $3,278,598. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website and in the grant award. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Education Stabilization Fund program Federal Funding Accountability and Transparency Act (FFATA) reporting. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A: prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also, according to this regulation, prime awardees must report information about each obligating action per the instructions posted in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee" and the data model also states that the amount of the sub-award is "The net dollar amount of Federal funds awarded to the Sub-awardee including modifications". Title 2 of the Code of Federal Regulations was updated to increase the subaward reporting requirement for grants from $25,000 to $30,000. Only subawards $30,000 or above require reports for prime grant awards as of November 12, 2020 as seen on the Final Registry - Guidance for Grants and Agreements - OMB Rule 85 FR 49506. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction (DPI) submitted inaccurate information and amounts based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. DPI also had a misunderstanding of the reporting threshold. EFFECT Subaward information that was reported was inaccurate and published later than required by Federal regulations. Subawards for ESSER I discretionary funds were not reported and two ESSER I awards were not reported. CONTEXT With 3 Federal grants, the Department of Public Instruction issued a total of 496 awards to 170 unique subrecipients for a total amount of $435,446,613.83 during our audit period of 7/1/2020-6/30/2022 that were susceptible to FFATA reporting. While it appears all required reports were submitted for ESSER II and ESSER III related awards, ESSER I discretionary fund awards did not get reported as well as any subrecipients that received more than $25,000 but less than $30,000. The ESSER I Federal Award also states that grants funded at $25,000 or more that meet the reporting conditions are to be reported. DPI did report the information directly from their grant awards, but DPI did not report all of the subawards within the required time based on when they were originally awarded. With ESSER III funds, DPI had to do some redistribution of funds causing their FFATA reporting to be overstated. DPI double-reported their awards instead of reporting the adjustment from the redistribution since the initial allocation was already reported. In our testing, the overstatement was $3,278,598. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website and in the grant award. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not formally track that letters of intent were received from all non-public schools. CRITERIA 18005(a) CARES Act: Section 18005(a) of the CARES Act requires a Local Educational Agency (LEA) that receives funds under the ESSER Fund to provide equitable services in the same manner as provided under section 1117 of the Elementary and Secondary Education Act of 1965 (ESEA) to students and teachers in non-public schools, as determined in consultation with representatives of non-public schools. 1117(b)(1) of the ESEA: (b)CONSULTATION. ? (1) IN GENERAL.?To ensure timely and meaningful consultation, a local educational agency shall consult with appropriate private school officials during the design and development of such agency?s programs under this part. Such agency and private school officials shall both have the goal of reaching agreement on how to provide equitable and effective programs for eligible private school children, the results of which agreement shall be transmitted to the ombudsman designated under subsection (a)(3)(B). 34 CFR 76.665(b)(1): An LEA must promptly consult with representatives of non-public elementary and secondary schools during the design and development of the LEA's plans to spend funds from a CARES Act program and before the LEA makes any decision affecting the opportunities of students and teachers in non-public schools to benefit from those funds. As provided in section 1117(b)(1) of the ESEA, the LEA and non-public school officials shall both have the goal of reaching timely agreement on how to provide equitable and effective programs for non-public school students and teachers. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction stated that they manually tracked the letters of intent but did not retain a record of this process to support that all letters of intent were received. EFFECT The lack of adequate procedures for tracking non-public school letters of intent increase the risk of non-public schools not participating in the program. CONTEXT The Department of Public Instruction (DPI) is responsible for initiating the consulting process by contacting representatives in all non-public schools in the state to notify them of the opportunity for their students and teachers to obtain equitable services. If non-public school officials want equitable services for their students and teachers, DPI must consult with those officials before DPI makes any decision that affects the opportunity of non-public school to participate in the activities funded under the CARES Act programs. If a non-public school declines to participate in the CARES Act programs or does not respond to DPI's good-faith effort to make contact, DPI has no further responsibility to provide equitable services to students or teachers in that school. However, DPI must be able to demonstrate that it made a good faith effort to contact all the nonpublic schools in the state. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction improve procedures for tracking to ensure all Education Stabilization program letters of intent from non-public schools are received in order to verify all of them were contacted. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with this finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Education Stabilization Fund program Federal Funding Accountability and Transparency Act (FFATA) reporting. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A: prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also, according to this regulation, prime awardees must report information about each obligating action per the instructions posted in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee" and the data model also states that the amount of the sub-award is "The net dollar amount of Federal funds awarded to the Sub-awardee including modifications". Title 2 of the Code of Federal Regulations was updated to increase the subaward reporting requirement for grants from $25,000 to $30,000. Only subawards $30,000 or above require reports for prime grant awards as of November 12, 2020 as seen on the Final Registry - Guidance for Grants and Agreements - OMB Rule 85 FR 49506. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction (DPI) submitted inaccurate information and amounts based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. DPI also had a misunderstanding of the reporting threshold. EFFECT Subaward information that was reported was inaccurate and published later than required by Federal regulations. Subawards for ESSER I discretionary funds were not reported and two ESSER I awards were not reported. CONTEXT With 3 Federal grants, the Department of Public Instruction issued a total of 496 awards to 170 unique subrecipients for a total amount of $435,446,613.83 during our audit period of 7/1/2020-6/30/2022 that were susceptible to FFATA reporting. While it appears all required reports were submitted for ESSER II and ESSER III related awards, ESSER I discretionary fund awards did not get reported as well as any subrecipients that received more than $25,000 but less than $30,000. The ESSER I Federal Award also states that grants funded at $25,000 or more that meet the reporting conditions are to be reported. DPI did report the information directly from their grant awards, but DPI did not report all of the subawards within the required time based on when they were originally awarded. With ESSER III funds, DPI had to do some redistribution of funds causing their FFATA reporting to be overstated. DPI double-reported their awards instead of reporting the adjustment from the redistribution since the initial allocation was already reported. In our testing, the overstatement was $3,278,598. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website and in the grant award. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Education Stabilization Fund program Federal Funding Accountability and Transparency Act (FFATA) reporting. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A: prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also, according to this regulation, prime awardees must report information about each obligating action per the instructions posted in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee" and the data model also states that the amount of the sub-award is "The net dollar amount of Federal funds awarded to the Sub-awardee including modifications". Title 2 of the Code of Federal Regulations was updated to increase the subaward reporting requirement for grants from $25,000 to $30,000. Only subawards $30,000 or above require reports for prime grant awards as of November 12, 2020 as seen on the Final Registry - Guidance for Grants and Agreements - OMB Rule 85 FR 49506. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction (DPI) submitted inaccurate information and amounts based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. DPI also had a misunderstanding of the reporting threshold. EFFECT Subaward information that was reported was inaccurate and published later than required by Federal regulations. Subawards for ESSER I discretionary funds were not reported and two ESSER I awards were not reported. CONTEXT With 3 Federal grants, the Department of Public Instruction issued a total of 496 awards to 170 unique subrecipients for a total amount of $435,446,613.83 during our audit period of 7/1/2020-6/30/2022 that were susceptible to FFATA reporting. While it appears all required reports were submitted for ESSER II and ESSER III related awards, ESSER I discretionary fund awards did not get reported as well as any subrecipients that received more than $25,000 but less than $30,000. The ESSER I Federal Award also states that grants funded at $25,000 or more that meet the reporting conditions are to be reported. DPI did report the information directly from their grant awards, but DPI did not report all of the subawards within the required time based on when they were originally awarded. With ESSER III funds, DPI had to do some redistribution of funds causing their FFATA reporting to be overstated. DPI double-reported their awards instead of reporting the adjustment from the redistribution since the initial allocation was already reported. In our testing, the overstatement was $3,278,598. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website and in the grant award. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Education Stabilization Fund program Federal Funding Accountability and Transparency Act (FFATA) reporting. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A: prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also, according to this regulation, prime awardees must report information about each obligating action per the instructions posted in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee" and the data model also states that the amount of the sub-award is "The net dollar amount of Federal funds awarded to the Sub-awardee including modifications". Title 2 of the Code of Federal Regulations was updated to increase the subaward reporting requirement for grants from $25,000 to $30,000. Only subawards $30,000 or above require reports for prime grant awards as of November 12, 2020 as seen on the Final Registry - Guidance for Grants and Agreements - OMB Rule 85 FR 49506. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction (DPI) submitted inaccurate information and amounts based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. DPI also had a misunderstanding of the reporting threshold. EFFECT Subaward information that was reported was inaccurate and published later than required by Federal regulations. Subawards for ESSER I discretionary funds were not reported and two ESSER I awards were not reported. CONTEXT With 3 Federal grants, the Department of Public Instruction issued a total of 496 awards to 170 unique subrecipients for a total amount of $435,446,613.83 during our audit period of 7/1/2020-6/30/2022 that were susceptible to FFATA reporting. While it appears all required reports were submitted for ESSER II and ESSER III related awards, ESSER I discretionary fund awards did not get reported as well as any subrecipients that received more than $25,000 but less than $30,000. The ESSER I Federal Award also states that grants funded at $25,000 or more that meet the reporting conditions are to be reported. DPI did report the information directly from their grant awards, but DPI did not report all of the subawards within the required time based on when they were originally awarded. With ESSER III funds, DPI had to do some redistribution of funds causing their FFATA reporting to be overstated. DPI double-reported their awards instead of reporting the adjustment from the redistribution since the initial allocation was already reported. In our testing, the overstatement was $3,278,598. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website and in the grant award. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Health did not ensure all required grant award information for Coronavirus Relief Funds (CRF) was provided to subrecipients. In addition, the Department's internal controls were insufficient to ensure that subrecipients received communication regarding the necessary items. Required information not communicated included: ? Subrecipient's unique entity identifier, ? Federal Award Identification Number, ? Total amount of Federal funds obligated to the subrecipient by the pass-through entity including the current financial obligation, ? Name of awarding agency, ? Assistance Listing Number; and, ? Indirect cost rate for Federal award including if the de minimis rate is charged. CRITERIA Federal regulation, 2 CFR 200.332(a), requires pass-through entities to communicate specific required information to subrecipients. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Health did not utilize its traditional grant template agreement to extend CRF dollars to ambulance, fire, school districts, and hospitals. Instead, the Department used a CARES Act Coronavirus Relief Fund Eligibility Certification form which did not contain all required items. EFFECT These required communications are intended to help subrecipients meet all their reporting requirements and to meet all award terms. Subrecipients subject to Single Audits also need this information for their audits. CONTEXT The Department of Health utilized its traditional grant template agreement for $31.7 million in grants provided to 28 local public health units which included the best information available to describe the Federal award and subaward. However, the Department did not utilize its traditional grant template agreement to extend up to $29.8 million of CRF dollars to 121 other entities, including ambulance, fire, and school districts and hospitals. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Health: A) Communicate all required information of 2 CFR 200.332(a) to subrecipients. B) Develop procedures to ensure that all Coronavirus Relief Fund award information is communicated to subrecipients. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly Department of Health) agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Health did not evaluate each subrecipient's risk of noncompliance. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR 200.332, all pass-through entities must evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. All pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Per 2 CFR 200.332(d)(2), pass through entities are required to ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. CAUSE The Department of Health primarily relied on risk assessments previously conducted for entities that had entered into other traditional grant agreements with the agency. Risk assessments were not conducted on all entities that only received CRF dollars and had not entered into other traditional grant agreements. The Department of Health indicated that prior to COVID-19, all subrecipients were subjected to sampling for a desk review. However, during COVID-19, the Department focused monitoring efforts on the 28 local public health units and pulled one random month to review expenditures being charged. EFFECT Monitoring activities conducted during our audit period were not determined based on subrecipient risk of noncompliance. CONTEXT The Department of Health provided $61.5M of CRF dollars to 149 subrecipients as follows: ? $31.7M to 28 local public health units ? $25M to 7 hospitals and related organizations ? $4.8M to 114 other entities, primarily ambulance districts We tested 15 of the 149 subrecipients (13 randomly selected and 2 individually significant items). Based on our testing and information provided by the Department of Health, we identified the following: ? Department of Health performed adequate during the award monitoring on 6 of the 15 subrecipients selected. ? Department of Health monitored 4 subrecipients not required to have a Single Audit. Six subrecipients selected had Single Audits while the remaining five subrecipients, which received less than $100,000 in CRF funding, were not monitored nor had a Single Audit. ? Department of Health did not conduct risk assessments on 4 of the 15 subrecipients selected, mostly ambulance districts that only received CRF dollars. The Department of Health acknowledged subjecting the 28 local public health units to subrecipient monitoring sampling. The Department tested $919,816 out of $61,521,414 of CRF payments to subrecipients or 1.5%. In addition, we noted the Department had assigned a risk level to the local public health units and hospitals selected for testing, as well as 53 ambulance districts. Lastly, the subrecipients (local public health units, hospitals, and ambulance districts) were known to be impacted by the COVID-19 pandemic, which could make such entities low risk for noncompliance. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Health conduct during-the-award monitoring activities as required for pass-through entities in accordance with 2 CFR 200.332. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly Department of Health) agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services, Emergency Rental Assistance (ERA) program, incorrectly calculated monthly rental assistance amounts by using the incorrect monthly rent amount and transition percentage for the applicable month of assistance. More specifically, 1 out of the 60 households sampled received monthly assistance in excess of the proper calculated payment amounts resulting in total overpayments of $977 and total likely projected questioned costs of $155,267. CRITERIA 2 CFR 200.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. ND ERA Policies & Procedures states that, "North Dakota will implement a payment coverage structure that provides applicants with rental assistance required while supporting their transition from relying on rental assistance. Availability of assistance will be structured as follows: Months one (1) through six (6): 100% of rent will be eligible, Months seven (7) through ten (10): 85% of rent will be eligible, Months (11) through eighteen (18): 70% of rent will be eligible". The outlined policy allows for an individual to receive up to twelve months of total rental assistance including 100% of their monthly rent for the first 6 months, 85% of their monthly rent for the next four months, and 70% of their monthly rent for the final two months. CAUSE The Department of Human Services, Emergency Rental Assistance (ERA) program, review did not identify correct monthly rent amounts and applied incorrect assistance percentages used to calculate the monthly ERA payments. EFFECT The Department issued payments that were not allowable under the Emergency Rental Assistance program. CONTEXT During state fiscal years, approximately 11,178 applications, totaling $46 million were processed by the Department. The State Auditor's office performed a test of sixty applications with one error that resulted in an overpayment of $977 and projected to additional likely questioned costs of $155,267. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services (ERA Program) ensure monthly payment amounts are calculated correctly and reviewed for accuracy. Additionally, we recommend the Department ensure the improper payments are recouped through the ERA program's refunding process. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department of Human Services agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Office of Management and Budget underreported both current period and cumulative expenditures by at least $117,366,999 on the project and expenditure report to the Department of Treasury covering the period of January 2022-March 2022. These expenditures were subsequently reported in the period of April 2022-June 2022. CRITERIA The interim final rule, issued May 17, 2021, states "The quarterly Project and Expenditure reports will include financial data, information on contracts and subawards over $50,000, types of projects funded, and other information regarding a recipient?s utilization of the award funds..... Treasury will provide additional guidance and instructions on the reporting requirements outlined above for the Fiscal Recovery Funds at a later date." (Federal Register Vol. 96, No.93 pgs. 26814-26815). The final rule published January 27, 2022 which amended the interim rule also stated "Recipients are advised to also consult Treasury?s Reporting and Compliance Guidance for additional information on program administration processes and requirements, including applicability of the Uniform Guidance". Federal Register Vol. 87, No.18 pg. 4340). Per this guidance which was first published June 17, 2021, recipients were required to submit Project and Expenditure reports that included current period expenditures and cumulative expenditures for reporting periods covering March 2021-December 2021 and January 2022-March 2022. (Compliance and Reporting Guidance - State and Local Fiscal Recovery Funds, V5.0 pg.17-19). The FY 2022 compliance supplement also states that the SEFA should report all aggregate expenditures for all four eligible use categories, not just the results of the revenue loss calculation or standard allowance. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Individual agencies paid SLFRF expenditures through the state's accounting system. OMB transferred reimbursement of expenditures to the individual agencies upon request. OMB reported information on the Federal project and expenditure reports based on OMB's transfers out to agencies. OMB tracked these transfers and reported the amount tracked as current period and cumulative period expenditures for their Project and Expenditure report. Expenditures may be reported on a cash or accrual basis. Some agencies did not request a transfer for paid expenditures or provide information relating to incurred expenditures to OMB prior to the reporting period end. The State Treasurer paid approximately $92 million and the Department of Human Services paid approximately $25 million during the period that was not transferred to these agencies until after the reporting period and not reported in the period January 2022-March 2022. EFFECT The timing of expenditures made using State and Local Fiscal Recovery Funds (SLFRF) was reported inaccurately to the Department of Treasury. CONTEXT In March 2021, the Federal Department of Treasury obligated funds to all 50 states under the State Local and Fiscal Recovery Fund to help states mitigate negative economic impacts caused by the COVID-19 pandemic. In November 2021, the special session of the 67th legislature obligated use of these funds to various agencies across the state. As the state was able to show that the revenue lost in years 2020 and 2021 exceeded the amount of the obligation from the Department of Treasury, the state was able to claim use of these funds under revenue replacement which allowed the state to utilize them for 'government operations' in addition to other specific uses and also allowing the state to report use of these funds under a single 'revenue replacement' project. The agencies began using the funds for purposes after they were obligated by the state legislature and began recording expenditures against the grant throughout our audit period. When these funds were initially disbursed to the state in March 2021, the funds were received by OMB and OMB then transferred reimbursement to agencies on request. North Dakota's project description on the reports was consistent and based on legislative appropriation. As reported, "Due to its extraordinary revenue loss during the pandemic, North Dakota?s entire SFRF allocation is dedicated to project expenditure category group 6 ? Revenue Replacement. Consequently, all expenditures will fall under project expenditure category 6.1 ? Provision of Government Services. Government services, as defined by the North Dakota legislature, includes economic development and workforce development initiatives, infrastructure and deferred maintenance initiatives, state service delivery and information technology improvements, and healthcare and emergency response initiatives." Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget develop corrective action and properly report the state's SLFRF current period expenditures and cumulative expenditures to the Department of Treasury as accumulated from each agency's records within the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding. The expenditures referenced in this audit finding were incurred by agencies prior to the period in which the Federal funds were included in the quarterly expenditure reports for the State and Local Fiscal Recovery Fund. Because OMB is responsible for the state reporting under this program, it is necessary to maintain some level of control over these funds. Consequently, OMB manages the funds centrally and developed a process to reimburse agencies for their eligible expenditures once expenditures were incurred and agencies requested reimbursement. As a result, reimbursement from the state?s allocation of SLFRF moneys always occurs after the agency expenditure. Funds are included in the Federal report for the period in which reimbursement from the SLFRF occurs. In some cases, this results in the agency expenditure occurring in a period prior to the period covered under the quarterly SLFRF report in which the reimbursement is reported. However, until reimbursement occurs, the expenditure is charged to a funding source other than SLFRF. All expenditures reimbursed through SLFRF are included in Federal reports for the period in which the reimbursement occurred. See ?Management?s Response and Corrective Action? section of this report. AUDITOR?S CONCLUDING COMMENTS While the Office of Management and Budget agrees with the finding, continuing Federal reporting based on the timing of reimbursed expenditures will likely cause further inaccurate SLFRF reporting. In addition, amounts transferred to agencies are not confirmed to not exceed incurred expenditures to ensure a reimbursement process is in place.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services made payments under the Vocational Rehabilitation program outside of the period of performance for the 2019 grant award which had a period of performance of 10/1/18 - 9/30/19 with an allowable liquidation period through 1/31/2021. More specifically, the program charged $2,454 to the 2019 grant award when the underlying obligations actually occurred during the 2020 grant award period of performance. CRITERIA The following criteria note that Federal funds must be obligated by the end of the two-year period of performance window and those obligations must be liquidated within 120 days after the end date of period of performance. 2 CFR 200.344 requires: " Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.? 34 CFR 361.64 requires: " (a) Except as provided in paragraph (b) of this section, any Federal funds, including reallotted funds, that are appropriated for a fiscal year to carry out a program under this part that are not obligated by the State by the beginning of the succeeding fiscal year and any program income received during a fiscal year that is not obligated by the State by the beginning of the succeeding fiscal year remain available for obligation by the State during that succeeding fiscal year. (b) Federal funds appropriated for a fiscal year remain available for obligation in the succeeding fiscal year only to the extent that the State met the matching requirement for those Federal funds by obligating, in accordance with 34 CFR 76.707, the non-Federal share in the fiscal year for which the funds were appropriated." The following criteria pertains to the establishment and maintenance of effective internal control to ensure payments are made within the correct period of performance. 2 CFR 200.303 states the non-Federal entity must, "establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." CAUSE The Department of Human Services, Vocational Rehabilitation Program, review of the expenditure period of performance, as outlined in its period of performance procedures, were not followed. Therefore, the grant award monitoring procedures were unable to detect payments made outside of the period of performance. EFFECT Unallowable costs totaling $2,454 were charged to the 2019 grant award with a total projected questioned cost amount of $41,717. CONTEXT The Department of Human Services, Vocational Rehabilitation program, had expenditures of $412,720 after the obligation period for the 2019 and 2020 awards. Of this amount, one payment totaling $2,454 was identified by sampling as an error. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-019 was reported in the immediate prior year. Findings 2018-031 and 2016-053 were reported in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Human Services follow its procedures to prevent and detect Vocational Rehabilitation payments from occurring outside the period of performance. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department of Health and Human Services agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION Department of Commerce did not complete a risk assessment for subawards to Community Action Agencies and, therefore, risk assessments are not being used to determine the nature and extent of subrecipient monitoring. CRITERIA Pass-through entities are required (45 CFR 75.352(b)) to evaluate each subrecipients risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipients prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with subpart F, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of HHS awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from an HHS awarding agency). 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Commerce did not complete risk assessments during the audit period due to COVID-19 as the Department was unable to go on-site to assess the risk at each Community Action Agency. EFFECT Department of Commerce may be performing insufficient subrecipient monitoring of high-risk subrecipients. CONTEXT Payments to the 7 Community Action Agencies that received payment as subrecipients under the LIHEAP program totaled $12,171,758 during fiscal years 2021 and 2022. The Department of Commerce did not complete risk assessments during the audit period due to COVID-19 as the Department was unable to go on-site an assess the risk at each Community Action Agency. The Department did continue to monitor the Community Action Agencies through monitoring and ensuring that the Community Action Agencies received their Federal Single Audits. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Commerce ensure subrecipient risk assessments are completed and used to determine the nature and extent of subrecipient monitoring. DEPARTMENT OF COMMERCE RESPONSE The Department of Commerce agrees with this finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services (DHS) is incorrectly identifying the ND Department of Commerce (Commerce) as a subrecipient for reporting purposes. DHS entered into $8,900,000 worth of subcontracts for the audit period 7/1/20-6/30/22. $8,000,000 was contracted with the Department of Commerce (4 contracts), who then subawarded 27 contracts worth $7,890,001 to 7 different Community Action Agencies. The other $900,000 was correctly subawarded by DHS through 2 contracts to Community Options for outreach services. DHS entered into contracts with Commerce, which Commerce then subawarded to Community Action Agencies for Weatherization and Emergency Furnace programs under the Low-Income Home Energy Assistance Program (LIHEAP). DHS reported the 4 contracts with Commerce for FFATA. All 27 contracts with the Community Action Agencies by Commerce were not correctly identified as subawards for FFATA reporting. Because of this, the FFATA reporting does not accurately show the subawards of the state. In addition, by incorrectly reporting the Department of Commerce as a subrecipient, DHS overstated the total amount subawarded by $109,999 as the Department of Commerce used this amount for administrative expenses. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Non-federal entities are required to submit FFATA reporting according to 45 CFR 75.300(b). Per Part 3 of the Compliance Supplement, Subrecipient Monitoring section, "Transfers of Federal awards to another component of the same auditee under 2 CFR Part 200, Subpart F, do not constitute a subrecipient or contractor relationship". The ND Department of Commerce, receiving Federal funds from the ND Department of Human Services to subaward to the Community Action Agencies, is a pass-through entity according to the following definitions. ? 45 CFR 75.2 Pass-through Entity means a non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program. ? 45 CFR 75.2 Subrecipient means an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a Federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. ? 45 CFR 75.2 Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE DHS did not properly distinguish another state agency (Commerce) as a pass-through entity in subrecipient tracking methods and failed to identify the subawards to Community Action Agencies. EFFECT DHS incorrectly identified funds passed through to Commerce as a subrecipient relationship and reported subawards paid to Commerce in FFATA reporting. Subawards that the ND has with Community Action Agencies were not reported in the Federal Funds Accountability and Transparency Act (FFATA) reporting. In doing so, DHS and Commerce did not report 27 subawards to Community Action Agencies. Since DHS did report subaward amounts with Commerce, the net error amount is $109,999 for the audit period 7/1/20 - 6/30/22. CONTEXT The North Dakota Department of Human Services administers the LIHEAP program and contracts with the Department of Commerce to administer the Weatherization and Emergency Furnace programs under the LIHEAP program. Commerce entered into 27 contracts between 7 Community Action Agencies for a total amount of $7,890,001 during the audit period 7/1/20-6/30/22. The Community Action Agencies were not identified as the recipients of the subawards for LIHEAP. This resulted in a qualitative reporting error and a net reporting amount error of $109,999. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services coordinate with the Department of Commerce to properly report subawards of the state under the LIHEAP program for FFATA reporting. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified an individual receiving LIHEAP benefits when they were living at one of their parents' houses rent-free. There was no rental contract on file or adequate documentation to allow this individual to receive LIHEAP benefits. We identified a known error of $749.37. When projected against the population, the remaining likely projected error is $302,293.17. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. DHS LIHEAP policy 415-20-10-35, "Households that receive rent-free housing including fuel as a required condition of part of an employment agreement, or as a gift, or through legal action (separation/divorce), are NOT vulnerable to the rising cost of heat and are therefore not eligible for heating assistance from LIHEAP." CAUSE County eligibility workers did not obtain enough documentation to confirm that the case was in compliance with DHS LIHEAP policy 415-20-10-35. EFFECT Improper overpayment of LIHEAP benefits. CONTEXT During state fiscal years, approximately 189,548 payments, totaling $34 million, were processed through the Department of Human Services' Legacy and SPACES eligibility systems. From the SPACES system there were 88,917 payments totaling $15.5 million and from the LEGACY system there were 100,631 payments totaling $18.4 million. The State Auditor's office performed a test of 80 payments, 40 from LEGACY and 40 from SPACES. The SPACES sample of payments was stratified with 66,548 payments under $200 (13 tested); 21,606 payments from $200-$999 (tested 24); and 763 payments with amount over $1,000 (tested 3). The error was identified in eligibility testing of payment records from the SPACES system which were approximately $15.5 million, and projected within stratified payments individually less than $200 ($5.28 million, 66,548 payments). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure adequate rental documentation is on file and proper eligibility determinations of the Low-Income Home Energy Assistance Program (LIHEAP) are made. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services (DHS) did not prevent duplicate LIHEAP benefit payments. Potential duplicate payments made during the audit period were identified by analyzing cases with combinations of the same case number (SPACES system) or Social Security Number (SSN) (Legacy system), Fuel Type, Benefit Month, Provider, and Amount. In addition, duplicate SSNs were analyzed to identify individuals in more than one case meaning that individuals would be counted in the number of persons in more than one household for calculating LIHEAP benefit payments. The duplicate payment test identified a known duplicate payments error of $1,415 and, projected to the population, a remaining likely questioned cost of $181,183. The duplicate SSN test identified a known overpayment of $528 and, projected to the population, a remaining likely questioned cost of $2,961. There was a 35% (7 of 20 tested) error rate in duplicate payments and a 90% (18 of 20 tested) error rate in duplicate SSNs. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. DHS policy 415-15-10-20 for verification of eligibility states verification of the applicant's statement of resources, or any other factor of eligibility and benefit determination, may be required whenever it is questionable in the judgment of the county social service board representative. If the required verification is refused, the application may be denied. In addition to the household income, eligibility and/or benefit determination factors include, but are not limited to identity, location and size of home, type of fuel, various dates, household composition, vulnerability, etc. If there is a court order or legal agreement form that indicates that both parents have 50% custody of their children, each parent can count the children in their household. CAUSE The DHS does not have proper procedures in place to detect and prevent duplicate or improper payments from being issued. Legacy and SPACES automatically calculate benefit payments. DHS is also able to make manual payments in addition to the calculated benefit payments. In addition, Case files lacked adequate documentation such as custody agreements and court orders at the time of eligibility determination for children in split custody arrangements. DHS does not have a policy to define 50% custody when a custody agreement or court order is not provided. EFFECT Overpayment of LIHEAP benefits. CONTEXT The LIHEAP program had approximately 189,548 benefit payments to individuals totaling $34 million for fiscal years 2021 and 2022. Out of those payments our office identified 12,689 potential duplicate payments totaling $1,437,329 and a separate 263 payments with duplicate SSNs indicating the same individual in multiple households/cases totaling $70,110. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure policies and procedures prevent duplicate payments from being applied to LIHEAP cases. We also recommend the Department of Human Services ensure required documentation is obtained for individuals appearing in multiple cases in accordance with state LIHEAP Policy. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We found that, of the 40 cases tested from the Department of Human Services' (DHS) Legacy system for proper eligibility, 17 cases were processed as eligible without a worker verifying eligibility information through the State NDVerify system. Under the LIHEAP FFY 2021 and FFY 2022 Detailed Model Plan (SF-424) of the State Plan, Monitoring section, NDVerify is identified as the monitoring schedule and protocol under section 10.6. This section in the State Plan is the response for covering 45 CFR ? 75.342, Monitoring and Reporting Program Performance. The Department implemented a new SPACES eligibility system for LIHEAP which was used for the 2022 heating season. NDVerify is integrated into the SPACES system and there were no errors in testing that NDVerify in SPACES was searched for the 2022 heating season eligibility. CRITERIA 45 CFR 75.342(a), Monitoring by the Non-Federal Entity, states the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. Within the Detailed Model Plan (SF-424), section 10.6 (Monitoring), of the FFY 2021 and FFY 2022 State Plans, DHS submitted monitoring schedule and protocol using NDVerify. "The North Dakota Department of Human Services has built a web-based verification system called NDVerify that streamlines the search of different interfaces/sources to obtain verification electronically. NDVerify allows eligibility workers to search multiple interfaces/sources for all household members included in a LIHEAP case at the same time. NDVerify also stores the search based on the date completed for historical purposes." 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE NDVerify was not integrated with the Legacy System. The DHS does not have a policy specifically requiring workers to perform NDVerify checks for all applications. While the Detailed Model Plan (SF-424) of the State Plan identifies several eligibility checks to integrated information through NDVerify, the DHS considers the use of NDVerify as optional and an available resource rather than a requirement. EFFECT Without verifying information with available state interfaces, there is no way to tell if the applicant is providing all the necessary information and this could impact eligibility determinations. The following sources/interfaces are included with NDVerify: Birth/Death Records (ND Vital Records) Health Insurance (DEERS) ND Child Support ND Department of Corrections ND Motor Vehicle/Watercraft (Motor Vehicle/Game & Fish) ND State Directory of New Hire ND State Hospital Admission/Discharge ND Unemployment Insurance Benefits (Job Service) ND Wages (Job Service) Other Benefit Information (SSA) SNAP Intentional Program Violations WSI Medical Claims Status Request UPA Request 40 Quarters Systematic Alien Verification for Entitlements (SAVE) CONTEXT The Department utilized the Legacy system for the 2021 heating season. Per the FFY 2021 Household report, there were 14,282 applications and $18,407,731.73 in payments for the LIHEAP Program. DHS implemented the SPACES system for the 2022 heating season. NDVerify is integrated with SPACES and there were no errors in testing that NDVerify was used within SPACES. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure eligibility is verified through the State NDVerify system prior to approval of all LIHEAP applications or revise the State Plan to identify the use of NDVerify as optional for approval by the Federal awarding agency. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department disagrees with this finding. See ?Management?s Response and Corrective Action? section of this report. AUDITOR?S CONCLUDING COMMENTS DHS informed the Federal agency of their procedures for Program Integrity in Section 17 of the state plan, ?All sources and types of income that exceed $500 per year must be verified.? DHS also, outlines under their monitoring procedures in the State plan that the eligibility workers have access to the NDVerify system to verify identification and income. NDVerify allows DHS to obtain identification and income records such as birth/death records, health insurance, child support, new hire information, unemployment insurance benefits, social security administration, supplemental nutrition assistance program benefits, etc. Relying solely on hard copies from the applicant to determine eligibility and not cross-checking the information for accuracy is not verifying all sources nor following procedures that were identified to the Federal agency in the state plan.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified an individual receiving LIHEAP benefits when they were living at one of their parents' houses rent-free. There was no rental contract on file or adequate documentation to allow this individual to receive LIHEAP benefits. We identified a known error of $749.37. When projected against the population, the remaining likely projected error is $302,293.17. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. DHS LIHEAP policy 415-20-10-35, "Households that receive rent-free housing including fuel as a required condition of part of an employment agreement, or as a gift, or through legal action (separation/divorce), are NOT vulnerable to the rising cost of heat and are therefore not eligible for heating assistance from LIHEAP." CAUSE County eligibility workers did not obtain enough documentation to confirm that the case was in compliance with DHS LIHEAP policy 415-20-10-35. EFFECT Improper overpayment of LIHEAP benefits. CONTEXT During state fiscal years, approximately 189,548 payments, totaling $34 million, were processed through the Department of Human Services' Legacy and SPACES eligibility systems. From the SPACES system there were 88,917 payments totaling $15.5 million and from the LEGACY system there were 100,631 payments totaling $18.4 million. The State Auditor's office performed a test of 80 payments, 40 from LEGACY and 40 from SPACES. The SPACES sample of payments was stratified with 66,548 payments under $200 (13 tested); 21,606 payments from $200-$999 (tested 24); and 763 payments with amount over $1,000 (tested 3). The error was identified in eligibility testing of payment records from the SPACES system which were approximately $15.5 million, and projected within stratified payments individually less than $200 ($5.28 million, 66,548 payments). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure adequate rental documentation is on file and proper eligibility determinations of the Low-Income Home Energy Assistance Program (LIHEAP) are made. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services (DHS) did not prevent duplicate LIHEAP benefit payments. Potential duplicate payments made during the audit period were identified by analyzing cases with combinations of the same case number (SPACES system) or Social Security Number (SSN) (Legacy system), Fuel Type, Benefit Month, Provider, and Amount. In addition, duplicate SSNs were analyzed to identify individuals in more than one case meaning that individuals would be counted in the number of persons in more than one household for calculating LIHEAP benefit payments. The duplicate payment test identified a known duplicate payments error of $1,415 and, projected to the population, a remaining likely questioned cost of $181,183. The duplicate SSN test identified a known overpayment of $528 and, projected to the population, a remaining likely questioned cost of $2,961. There was a 35% (7 of 20 tested) error rate in duplicate payments and a 90% (18 of 20 tested) error rate in duplicate SSNs. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. DHS policy 415-15-10-20 for verification of eligibility states verification of the applicant's statement of resources, or any other factor of eligibility and benefit determination, may be required whenever it is questionable in the judgment of the county social service board representative. If the required verification is refused, the application may be denied. In addition to the household income, eligibility and/or benefit determination factors include, but are not limited to identity, location and size of home, type of fuel, various dates, household composition, vulnerability, etc. If there is a court order or legal agreement form that indicates that both parents have 50% custody of their children, each parent can count the children in their household. CAUSE The DHS does not have proper procedures in place to detect and prevent duplicate or improper payments from being issued. Legacy and SPACES automatically calculate benefit payments. DHS is also able to make manual payments in addition to the calculated benefit payments. In addition, Case files lacked adequate documentation such as custody agreements and court orders at the time of eligibility determination for children in split custody arrangements. DHS does not have a policy to define 50% custody when a custody agreement or court order is not provided. EFFECT Overpayment of LIHEAP benefits. CONTEXT The LIHEAP program had approximately 189,548 benefit payments to individuals totaling $34 million for fiscal years 2021 and 2022. Out of those payments our office identified 12,689 potential duplicate payments totaling $1,437,329 and a separate 263 payments with duplicate SSNs indicating the same individual in multiple households/cases totaling $70,110. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure policies and procedures prevent duplicate payments from being applied to LIHEAP cases. We also recommend the Department of Human Services ensure required documentation is obtained for individuals appearing in multiple cases in accordance with state LIHEAP Policy. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We found that, of the 40 cases tested from the Department of Human Services' (DHS) Legacy system for proper eligibility, 17 cases were processed as eligible without a worker verifying eligibility information through the State NDVerify system. Under the LIHEAP FFY 2021 and FFY 2022 Detailed Model Plan (SF-424) of the State Plan, Monitoring section, NDVerify is identified as the monitoring schedule and protocol under section 10.6. This section in the State Plan is the response for covering 45 CFR ? 75.342, Monitoring and Reporting Program Performance. The Department implemented a new SPACES eligibility system for LIHEAP which was used for the 2022 heating season. NDVerify is integrated into the SPACES system and there were no errors in testing that NDVerify in SPACES was searched for the 2022 heating season eligibility. CRITERIA 45 CFR 75.342(a), Monitoring by the Non-Federal Entity, states the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. Within the Detailed Model Plan (SF-424), section 10.6 (Monitoring), of the FFY 2021 and FFY 2022 State Plans, DHS submitted monitoring schedule and protocol using NDVerify. "The North Dakota Department of Human Services has built a web-based verification system called NDVerify that streamlines the search of different interfaces/sources to obtain verification electronically. NDVerify allows eligibility workers to search multiple interfaces/sources for all household members included in a LIHEAP case at the same time. NDVerify also stores the search based on the date completed for historical purposes." 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE NDVerify was not integrated with the Legacy System. The DHS does not have a policy specifically requiring workers to perform NDVerify checks for all applications. While the Detailed Model Plan (SF-424) of the State Plan identifies several eligibility checks to integrated information through NDVerify, the DHS considers the use of NDVerify as optional and an available resource rather than a requirement. EFFECT Without verifying information with available state interfaces, there is no way to tell if the applicant is providing all the necessary information and this could impact eligibility determinations. The following sources/interfaces are included with NDVerify: Birth/Death Records (ND Vital Records) Health Insurance (DEERS) ND Child Support ND Department of Corrections ND Motor Vehicle/Watercraft (Motor Vehicle/Game & Fish) ND State Directory of New Hire ND State Hospital Admission/Discharge ND Unemployment Insurance Benefits (Job Service) ND Wages (Job Service) Other Benefit Information (SSA) SNAP Intentional Program Violations WSI Medical Claims Status Request UPA Request 40 Quarters Systematic Alien Verification for Entitlements (SAVE) CONTEXT The Department utilized the Legacy system for the 2021 heating season. Per the FFY 2021 Household report, there were 14,282 applications and $18,407,731.73 in payments for the LIHEAP Program. DHS implemented the SPACES system for the 2022 heating season. NDVerify is integrated with SPACES and there were no errors in testing that NDVerify was used within SPACES. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure eligibility is verified through the State NDVerify system prior to approval of all LIHEAP applications or revise the State Plan to identify the use of NDVerify as optional for approval by the Federal awarding agency. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department disagrees with this finding. See ?Management?s Response and Corrective Action? section of this report. AUDITOR?S CONCLUDING COMMENTS DHS informed the Federal agency of their procedures for Program Integrity in Section 17 of the state plan, ?All sources and types of income that exceed $500 per year must be verified.? DHS also, outlines under their monitoring procedures in the State plan that the eligibility workers have access to the NDVerify system to verify identification and income. NDVerify allows DHS to obtain identification and income records such as birth/death records, health insurance, child support, new hire information, unemployment insurance benefits, social security administration, supplemental nutrition assistance program benefits, etc. Relying solely on hard copies from the applicant to determine eligibility and not cross-checking the information for accuracy is not verifying all sources nor following procedures that were identified to the Federal agency in the state plan.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not properly monitoring corrective orders issued to child care providers and performing re-inspections of identified deficiencies within specified time frames. 5 of 586 corrective orders issued during our audit period did not identify a date the orders were corrected. 187 of 586 (32%) corrective orders were not re-inspected within the 24-hour, 20-day, or 60-day time frame allowed for correction. 8 of 586 (1%) correction orders indicated correction before the violation date which potentially could mean inaccurate dates were being tracked. CRITERIA North Dakota Century Code (NDCC) section 50-11.1-07.2 requires that the Department or the Department's authorized agency issue a correction order whenever it is determined upon inspection that a program or premises is not in compliance with this chapter or rules adopted under this chapter. NDCC section 50-11.1-07.3 requires the Department or the Department's authorized agency shall re-inspect an early childhood program issued a correction order under NDCC section 50-11.1-07.2, at the end of the period allowed for correction. 45 CFR 98.41 requires that lead agencies must certify that procedures are in effect to ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for monitoring the resolution of corrective orders is ineffective. Due to employee turnover and the lack of guidance, corrective orders and dates are not consistently documented on the tracking sheet. EFFECT Child care providers are operating without proper follow-up of corrective orders potentially jeopardizing the health and safety of children. CONTEXT During fiscal years 2021 and 2022, there were 1,170 licensed providers in North Dakota receiving payments from the Child Care Assistance program. The following list is the number of corrective orders issued by calendar year: 2022 - 152 (through July) 2021 - 291 2020 - 143 (July through December) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-011 was reported in the immediate prior year. Findings 2018-013 and 2016-026 were made in previous years. RECOMMENDATION We recommend the Department of Human Service improve procedures to ensure child care correction orders are resolved before the end of each allowed correction period with accurate tracking of dates. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department of Health and Human Service agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not performing annual unannounced inspections of child care providers in operation. An annual unannounced inspection was not completed on 9 of 71 providers that were tested. CRITERIA 45 CFR 98.42(b)(2)(B) requires that not less than annually, an unannounced inspection for compliance with all child care licensing standards, which shall include an inspection for compliance with health and safety and fire standards, shall be completed. Department policy 620-01-116 states, the authorized agent is required to perform an unannounced review at least annually for each licensed or self-declared child care provider. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for ensuring unannounced visits are performed annually is ineffective. EFFECT Child care providers are operating child care facilities without proper monitoring of whether health and safety conditions have been met. CONTEXT During fiscal years 2021 and 2022 there were 1,871 providers from the Child Care Assistance program. The 12.7% error rate applied to the population would result in an estimated 237 providers not receiving unannounced visits. Errors were found within group, center, and self-declared providers. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-015 was reported in the immediate prior year. Findings 2018-017 and 2016-027 were made in previous years. RECOMMENDATION We recommend the Department of Human Services develop corrective action and perform annual unannounced inspections of child care providers in operation in accordance with 45 CFR 98.42(b)(2)(B) and Department policy. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not properly monitoring corrective orders issued to child care providers and performing re-inspections of identified deficiencies within specified time frames. 5 of 586 corrective orders issued during our audit period did not identify a date the orders were corrected. 187 of 586 (32%) corrective orders were not re-inspected within the 24-hour, 20-day, or 60-day time frame allowed for correction. 8 of 586 (1%) correction orders indicated correction before the violation date which potentially could mean inaccurate dates were being tracked. CRITERIA North Dakota Century Code (NDCC) section 50-11.1-07.2 requires that the Department or the Department's authorized agency issue a correction order whenever it is determined upon inspection that a program or premises is not in compliance with this chapter or rules adopted under this chapter. NDCC section 50-11.1-07.3 requires the Department or the Department's authorized agency shall re-inspect an early childhood program issued a correction order under NDCC section 50-11.1-07.2, at the end of the period allowed for correction. 45 CFR 98.41 requires that lead agencies must certify that procedures are in effect to ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for monitoring the resolution of corrective orders is ineffective. Due to employee turnover and the lack of guidance, corrective orders and dates are not consistently documented on the tracking sheet. EFFECT Child care providers are operating without proper follow-up of corrective orders potentially jeopardizing the health and safety of children. CONTEXT During fiscal years 2021 and 2022, there were 1,170 licensed providers in North Dakota receiving payments from the Child Care Assistance program. The following list is the number of corrective orders issued by calendar year: 2022 - 152 (through July) 2021 - 291 2020 - 143 (July through December) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-011 was reported in the immediate prior year. Findings 2018-013 and 2016-026 were made in previous years. RECOMMENDATION We recommend the Department of Human Service improve procedures to ensure child care correction orders are resolved before the end of each allowed correction period with accurate tracking of dates. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department of Health and Human Service agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not performing annual unannounced inspections of child care providers in operation. An annual unannounced inspection was not completed on 9 of 71 providers that were tested. CRITERIA 45 CFR 98.42(b)(2)(B) requires that not less than annually, an unannounced inspection for compliance with all child care licensing standards, which shall include an inspection for compliance with health and safety and fire standards, shall be completed. Department policy 620-01-116 states, the authorized agent is required to perform an unannounced review at least annually for each licensed or self-declared child care provider. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for ensuring unannounced visits are performed annually is ineffective. EFFECT Child care providers are operating child care facilities without proper monitoring of whether health and safety conditions have been met. CONTEXT During fiscal years 2021 and 2022 there were 1,871 providers from the Child Care Assistance program. The 12.7% error rate applied to the population would result in an estimated 237 providers not receiving unannounced visits. Errors were found within group, center, and self-declared providers. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-015 was reported in the immediate prior year. Findings 2018-017 and 2016-027 were made in previous years. RECOMMENDATION We recommend the Department of Human Services develop corrective action and perform annual unannounced inspections of child care providers in operation in accordance with 45 CFR 98.42(b)(2)(B) and Department policy. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not properly monitoring corrective orders issued to child care providers and performing re-inspections of identified deficiencies within specified time frames. 5 of 586 corrective orders issued during our audit period did not identify a date the orders were corrected. 187 of 586 (32%) corrective orders were not re-inspected within the 24-hour, 20-day, or 60-day time frame allowed for correction. 8 of 586 (1%) correction orders indicated correction before the violation date which potentially could mean inaccurate dates were being tracked. CRITERIA North Dakota Century Code (NDCC) section 50-11.1-07.2 requires that the Department or the Department's authorized agency issue a correction order whenever it is determined upon inspection that a program or premises is not in compliance with this chapter or rules adopted under this chapter. NDCC section 50-11.1-07.3 requires the Department or the Department's authorized agency shall re-inspect an early childhood program issued a correction order under NDCC section 50-11.1-07.2, at the end of the period allowed for correction. 45 CFR 98.41 requires that lead agencies must certify that procedures are in effect to ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for monitoring the resolution of corrective orders is ineffective. Due to employee turnover and the lack of guidance, corrective orders and dates are not consistently documented on the tracking sheet. EFFECT Child care providers are operating without proper follow-up of corrective orders potentially jeopardizing the health and safety of children. CONTEXT During fiscal years 2021 and 2022, there were 1,170 licensed providers in North Dakota receiving payments from the Child Care Assistance program. The following list is the number of corrective orders issued by calendar year: 2022 - 152 (through July) 2021 - 291 2020 - 143 (July through December) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-011 was reported in the immediate prior year. Findings 2018-013 and 2016-026 were made in previous years. RECOMMENDATION We recommend the Department of Human Service improve procedures to ensure child care correction orders are resolved before the end of each allowed correction period with accurate tracking of dates. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department of Health and Human Service agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not performing annual unannounced inspections of child care providers in operation. An annual unannounced inspection was not completed on 9 of 71 providers that were tested. CRITERIA 45 CFR 98.42(b)(2)(B) requires that not less than annually, an unannounced inspection for compliance with all child care licensing standards, which shall include an inspection for compliance with health and safety and fire standards, shall be completed. Department policy 620-01-116 states, the authorized agent is required to perform an unannounced review at least annually for each licensed or self-declared child care provider. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for ensuring unannounced visits are performed annually is ineffective. EFFECT Child care providers are operating child care facilities without proper monitoring of whether health and safety conditions have been met. CONTEXT During fiscal years 2021 and 2022 there were 1,871 providers from the Child Care Assistance program. The 12.7% error rate applied to the population would result in an estimated 237 providers not receiving unannounced visits. Errors were found within group, center, and self-declared providers. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-015 was reported in the immediate prior year. Findings 2018-017 and 2016-027 were made in previous years. RECOMMENDATION We recommend the Department of Human Services develop corrective action and perform annual unannounced inspections of child care providers in operation in accordance with 45 CFR 98.42(b)(2)(B) and Department policy. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION During our testing of eligibility, we noted that eligibility was not properly determined by the Department of Human Services (DHS) for 1 of 60 CHIP cases that were tested. For this case, the income exceeded the Federal Poverty Line (FPL) threshold for CHIP. This resulted in a known Federal error for this case of $498 with a likely additional federal questioned cost of $52,643. CRITERIA 42 CFR 457.965 states the State must include in each applicant's record facts to support the State's determination of the applicant's eligibility for Children's Health Insurance Program (CHIP). 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 42 CFR 431.804 ?Eligibility error? is an error resulting from the States' improper application of Federal rules and the State's documented policies and procedures that causes a beneficiary to be determined eligible when he or she is ineligible for Medicaid or CHIP, causes a beneficiary to be determined eligible for the incorrect type of assistance, causes applications for Medicaid or CHIP to be improperly denied by the State, or causes existing cases to be improperly terminated from Medicaid or CHIP by the State. An eligibility error may also be caused when a redetermination did not occur timely or a required element of the eligibility determination process (for example income) cannot be verified as being performed/completed by the state. 42 CFR 431.960(b)(1) A data processing error is an error resulting in an overpayment or underpayment that is determined from a review of the claim and other information available in the State's Medicaid Management Information System, related systems, or outside sources of provider verification resulting in Federal and/or State improper payments.) CAUSE Since the income was over the FPL for CHIP, the Department stated that state's system, SPACES, should have sustained benefits under the existing coverage which, in this one case was Medicaid (Affordable Care Act Child). The Department stated the SPACES system failed to sustain the benefits under Medicaid. Both Medicaid and CHIP are fee-for-service programs and the total payment amount was not impacted.) EFFECT The Department incorrectly claimed the FMAP rate for CHIP rather than Medicaid based on the child's category of eligibility. CONTEXT There were 18,177 payments totaling $26.2 million made during the audit period from CHIP. The individual case was from a stratified population of $17,965,913 for individual payment amounts between $1,000 to $49,999. The payment of $4,134 was projected to this stratified population of CHIP payments. The FMAP rates were then applied to the payment and the projection amount to determine the Federal amount in error which were calculated as the difference between the CHIP FMAP rate (71.85%) and Medicaid FMAP rate (59.79%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-002 was reported in the immediate prior year. Findings 2018-002 and 2016-004 were reported in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding for CHIP. RECOMMENDATION We recommend the Department of Human Services review the SPACES system edit checks and ensure eligibility determinations made for the CHIP programs are proper. We also recommend corrections to payments and Federal reimbursement of CHIP. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION Medicaid providers did not submit proper documentation to support the services billed in 12 of 456 claims tested by the auditors. This resulted in improper payments of $6,622. When projected against the entire population, the additional likely Federal questioned costs total $17,735,959. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 42 CFR 431.960 (c) (1) states a medical review error is an error resulting in an overpayment or underpayment that is determined from a review of the provider's medical record or other documentation supporting the service(s) claimed, Code of Federal Regulations that are applicable to conditions of payment, the State's written policies, and a comparison between the documentation and written policies and the information presented on the claim resulting in Federal and/or State improper payments. 42 CFR 431.960 (c) (3) states medical review errors include, but are not limited to, the following: (i) Lack of documentation, (ii) Insufficient documentation, and (iii) procedure coding errors. CAUSE Medicaid providers did not submit proper documentation to support Medicaid claims. EFFECT Unallowable or inaccurate payments were made to providers who later did not submit proper documentation when selected for audit. CONTEXT There were 10,698,524 Medicaid claims that occurred during our audit period of July 1, 2020, through June 30, 2022. The Federal Medical Assistance Percentages were used to calculate the Federal portion of the projected likely questioned costs. Where sampling was performed, the audit used a non-statistical sampling method. The Department provided the Centers for Medicare and Medicaid Services Notification of Improper Payment Rates for North Dakota dated 11/15/22. The target rate for fee-for-service payment errors was 14.88% with an estimated rate of 3.04% based on 387 sampled claims identified through the Payment Error Rate Measurement Program (PERM). The error rate of the claims audited by the ND State Auditor?s Office is 2.63% which is below this threshold. IDENTIFICATION AS A REPEAT FINDING Finding 2020-005 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Human Services develop a corrective action plan to address the errors identified in the audit and recover payments made on unsupported claims. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees to recover payments made on unsupported claims. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services has not completed a risk analysis and security review of the Medicaid Management Information System (MMIS) since 2019. CRITERIA 45 CFR 95.621(f)(3) states that state agencies shall review the Automatic Data Processing (ADP) system security of installations involved in the administration of Health and Human Services (HHS) programs on a biennial basis. 45 CFR 95.621(f)(6) states that the state agency shall maintain reports of their biennial ADP system security reviews, together with pertinent supporting documentation, for HHS on-site review. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE A risk analysis and security review was not completed in 2020 and 2021 due to resources being dedicated to the developing of new software. This new software will automate many of the processes surrounding the risk analysis and security review as well as user access reviews and will save personnel time. EFFECT The risk analysis has not been completed regularly and there is the possibility the security over different areas of the system can become compromised bringing into question the validity of the data contained within the system. CONTEXT There were $2,496,097,225 of Medicaid payments that were processed in the MMIS and eligibility systems during our audit period of July 1, 2020, through June 30, 2022. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services complete a risk analysis and security review of MMIS biennially. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The medical loss ratio report for reporting calendar year 2020 did not contain the minimum Federal regulation required elements. DHS did not maintain the required attestation statement to address accuracy for reporting year 2020. As of March 2, 2023, the medical loss ratio report for reporting year 2021, which was due in November 2022, has not been finalized as outlined in the Sanford Health Plan contract. The contract required completion prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date. CRITERIA Effective January 1, 2020, Sanford Health Plan Contract states, prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date, STATE shall finalize the MLR (Medical Loss Ratio) reporting year with any balance due to STATE as required in paragraph (G) of this section within 60 days. 42 CFR 438.8 (n) MCOs, PIHPs, and PAHPs must attest to the accuracy of the calculation of the MLR in accordance with requirements of this section when submitting the report required under paragraph (k) of this section. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The attestation statement to address accuracy was not provided to the auditor. The Department indicated the statement was obtained by an employee no longer with the Department and it was not shared with other team members. The Medical Loss Ratio report for reporting year 2021 was not finalized as outlined in the Sanford Health Plan Contract, "Prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date, STATE shall finalize the MLR reporting year with any balance due to STATE as required in paragraph (G) of this section within 60 days". This was due to a large reconciliation taking longer than normal to complete. A mutually agreed upon alternative date was not determined due to research needing to be done on both sides, sometimes not knowing how long it would take. EFFECT Absent the inclusion of all required medical loss ratio information, the Department cannot demonstrate compliance with Federal regulations. CONTEXT During our audit period of July 1, 2020, through June 30, 2022, the Department of Human Services contracted with one MCO health plan that was subject to MLR Federal reporting requirements. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensures the medical loss ratio report is finalized as outlined in the contract and all required documentation is properly maintained. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services did not complete an access review of the Medicaid Management Information System (MMIS) fee schedule for 2020 or 2021. The Department also did not complete a security review of all major Medicaid information systems for 2021 or 2022. CRITERIA Standards for Internal Control in the Federal Government requires management designs other control activities to promptly update access rights when employees change job functions or leave the entity. Management also designs control activities for access rights when different information technology elements are connected to each other. (GAO-14-704G para 11.14). 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The MMIS fee schedule access review was not completed in 2020 and 2021 and review of access rights for the major Medicaid information systems was not completed in 2021 and 2022 due to resources being dedicated to the developing of new software. The new software being developed may automate many of the processes surrounding the risk analysis and security review as well as user access reviews. EFFECT There is a risk that employees whose job duties have changed still have access to confidential information. CONTEXT There were $2,496,097,225 of Medicaid payments that were processed in the MMIS and eligibility systems during our audit period of July 1, 2020, through June 30, 2022. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services review access rights to the Medicaid Management Information System (MMIS) fee schedule and all major Medicaid information systems on a regular basis. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendations. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION Medicaid providers did not submit proper documentation to support the services billed in 12 of 456 claims tested by the auditors. This resulted in improper payments of $6,622. When projected against the entire population, the additional likely Federal questioned costs total $17,735,959. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 42 CFR 431.960 (c) (1) states a medical review error is an error resulting in an overpayment or underpayment that is determined from a review of the provider's medical record or other documentation supporting the service(s) claimed, Code of Federal Regulations that are applicable to conditions of payment, the State's written policies, and a comparison between the documentation and written policies and the information presented on the claim resulting in Federal and/or State improper payments. 42 CFR 431.960 (c) (3) states medical review errors include, but are not limited to, the following: (i) Lack of documentation, (ii) Insufficient documentation, and (iii) procedure coding errors. CAUSE Medicaid providers did not submit proper documentation to support Medicaid claims. EFFECT Unallowable or inaccurate payments were made to providers who later did not submit proper documentation when selected for audit. CONTEXT There were 10,698,524 Medicaid claims that occurred during our audit period of July 1, 2020, through June 30, 2022. The Federal Medical Assistance Percentages were used to calculate the Federal portion of the projected likely questioned costs. Where sampling was performed, the audit used a non-statistical sampling method. The Department provided the Centers for Medicare and Medicaid Services Notification of Improper Payment Rates for North Dakota dated 11/15/22. The target rate for fee-for-service payment errors was 14.88% with an estimated rate of 3.04% based on 387 sampled claims identified through the Payment Error Rate Measurement Program (PERM). The error rate of the claims audited by the ND State Auditor?s Office is 2.63% which is below this threshold. IDENTIFICATION AS A REPEAT FINDING Finding 2020-005 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Human Services develop a corrective action plan to address the errors identified in the audit and recover payments made on unsupported claims. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees to recover payments made on unsupported claims. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services has not completed a risk analysis and security review of the Medicaid Management Information System (MMIS) since 2019. CRITERIA 45 CFR 95.621(f)(3) states that state agencies shall review the Automatic Data Processing (ADP) system security of installations involved in the administration of Health and Human Services (HHS) programs on a biennial basis. 45 CFR 95.621(f)(6) states that the state agency shall maintain reports of their biennial ADP system security reviews, together with pertinent supporting documentation, for HHS on-site review. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE A risk analysis and security review was not completed in 2020 and 2021 due to resources being dedicated to the developing of new software. This new software will automate many of the processes surrounding the risk analysis and security review as well as user access reviews and will save personnel time. EFFECT The risk analysis has not been completed regularly and there is the possibility the security over different areas of the system can become compromised bringing into question the validity of the data contained within the system. CONTEXT There were $2,496,097,225 of Medicaid payments that were processed in the MMIS and eligibility systems during our audit period of July 1, 2020, through June 30, 2022. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services complete a risk analysis and security review of MMIS biennially. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The medical loss ratio report for reporting calendar year 2020 did not contain the minimum Federal regulation required elements. DHS did not maintain the required attestation statement to address accuracy for reporting year 2020. As of March 2, 2023, the medical loss ratio report for reporting year 2021, which was due in November 2022, has not been finalized as outlined in the Sanford Health Plan contract. The contract required completion prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date. CRITERIA Effective January 1, 2020, Sanford Health Plan Contract states, prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date, STATE shall finalize the MLR (Medical Loss Ratio) reporting year with any balance due to STATE as required in paragraph (G) of this section within 60 days. 42 CFR 438.8 (n) MCOs, PIHPs, and PAHPs must attest to the accuracy of the calculation of the MLR in accordance with requirements of this section when submitting the report required under paragraph (k) of this section. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The attestation statement to address accuracy was not provided to the auditor. The Department indicated the statement was obtained by an employee no longer with the Department and it was not shared with other team members. The Medical Loss Ratio report for reporting year 2021 was not finalized as outlined in the Sanford Health Plan Contract, "Prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date, STATE shall finalize the MLR reporting year with any balance due to STATE as required in paragraph (G) of this section within 60 days". This was due to a large reconciliation taking longer than normal to complete. A mutually agreed upon alternative date was not determined due to research needing to be done on both sides, sometimes not knowing how long it would take. EFFECT Absent the inclusion of all required medical loss ratio information, the Department cannot demonstrate compliance with Federal regulations. CONTEXT During our audit period of July 1, 2020, through June 30, 2022, the Department of Human Services contracted with one MCO health plan that was subject to MLR Federal reporting requirements. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensures the medical loss ratio report is finalized as outlined in the contract and all required documentation is properly maintained. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services did not complete an access review of the Medicaid Management Information System (MMIS) fee schedule for 2020 or 2021. The Department also did not complete a security review of all major Medicaid information systems for 2021 or 2022. CRITERIA Standards for Internal Control in the Federal Government requires management designs other control activities to promptly update access rights when employees change job functions or leave the entity. Management also designs control activities for access rights when different information technology elements are connected to each other. (GAO-14-704G para 11.14). 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The MMIS fee schedule access review was not completed in 2020 and 2021 and review of access rights for the major Medicaid information systems was not completed in 2021 and 2022 due to resources being dedicated to the developing of new software. The new software being developed may automate many of the processes surrounding the risk analysis and security review as well as user access reviews. EFFECT There is a risk that employees whose job duties have changed still have access to confidential information. CONTEXT There were $2,496,097,225 of Medicaid payments that were processed in the MMIS and eligibility systems during our audit period of July 1, 2020, through June 30, 2022. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services review access rights to the Medicaid Management Information System (MMIS) fee schedule and all major Medicaid information systems on a regular basis. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendations. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services did not meet the level of effort requirement for pregnant women and women with dependent children as they were unable to provide tracking information on the expenditures for the related services provided during the audit for the 2019 and 2020 grant awards. At a minimum, the Department was required to maintain a level of effort of the 1994 base amount which was $254,665. Since the Department was unable to identify expenditures for the 2019 and 2020 grant awards, the known error is $509,330. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 45 CFR 96.124(c): (1) The State for fiscal year 1993 shall expend not less than five percent of the grant to increase (relative to fiscal year 1992) the availability of treatment services designed for pregnant women and women with dependent children (either by establishing new programs or expanding the capacity of existing programs). The base for fiscal year 1993 shall be an amount equal to the fiscal year 1992 alcohol and drug services Block Grant expenditures and State expenditures for pregnant women and women with dependent children as described in paragraph (e) of this section, and to this base shall be added at least 5 percent of the 1993 Block Grant allotment. The base shall be calculated using Generally Accepted Accounting Principles and the composition of the base shall be applied consistently from year to year. States shall report the methods used to calculate their base for fiscal year 1992 expenditures on treatment for pregnant women and women with dependent children. (2) For fiscal year 1994, the State shall, consistent with paragraph (c)(1) of this section, expend not less than five percent of the grant to increase (relative to fiscal year 1993) the availability of such services to pregnant women and women with dependent children. (3) For grants beyond fiscal year 1994, the States shall expend no less than an amount equal to the amount expended by the State for fiscal year 1994. CAUSE The Department indicated there are no providers offering these specialized treatment services for pregnant women and women with dependent children. EFFECT Noncompliance with 45 CFR 96.124(c) to provide treatment services designed for pregnant women and women with dependent children at no less than an amount equal to the amount expended by the State for fiscal year 1994. Pregnant women addicted to drugs or alcohol face significant risks. The drug rehab programs for pregnant women and women with children provide specific services and support. CONTEXT The 2019 and 2020 grant years were the only grants to close during the audit period. The 1994 base amount is $254,655 per grant year. The substance abuse program expenditures for SFY 2021 were $10,447,419 and SFY 2022 were $6,310,633 as reported on the SFY 2021, 2022 Schedule of Expenditures of Federal Awards for CFDA 93.959. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services develop corrective action and expend, at a minimum, the amount expended by the State for fiscal year 1994, for the availability of treatment services designed for pregnant women and women with dependent children either by establishing new programs or expanding the capacity of existing programs DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services did not meet the level of effort requirement for pregnant women and women with dependent children as they were unable to provide tracking information on the expenditures for the related services provided during the audit for the 2019 and 2020 grant awards. At a minimum, the Department was required to maintain a level of effort of the 1994 base amount which was $254,665. Since the Department was unable to identify expenditures for the 2019 and 2020 grant awards, the known error is $509,330. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 45 CFR 96.124(c): (1) The State for fiscal year 1993 shall expend not less than five percent of the grant to increase (relative to fiscal year 1992) the availability of treatment services designed for pregnant women and women with dependent children (either by establishing new programs or expanding the capacity of existing programs). The base for fiscal year 1993 shall be an amount equal to the fiscal year 1992 alcohol and drug services Block Grant expenditures and State expenditures for pregnant women and women with dependent children as described in paragraph (e) of this section, and to this base shall be added at least 5 percent of the 1993 Block Grant allotment. The base shall be calculated using Generally Accepted Accounting Principles and the composition of the base shall be applied consistently from year to year. States shall report the methods used to calculate their base for fiscal year 1992 expenditures on treatment for pregnant women and women with dependent children. (2) For fiscal year 1994, the State shall, consistent with paragraph (c)(1) of this section, expend not less than five percent of the grant to increase (relative to fiscal year 1993) the availability of such services to pregnant women and women with dependent children. (3) For grants beyond fiscal year 1994, the States shall expend no less than an amount equal to the amount expended by the State for fiscal year 1994. CAUSE The Department indicated there are no providers offering these specialized treatment services for pregnant women and women with dependent children. EFFECT Noncompliance with 45 CFR 96.124(c) to provide treatment services designed for pregnant women and women with dependent children at no less than an amount equal to the amount expended by the State for fiscal year 1994. Pregnant women addicted to drugs or alcohol face significant risks. The drug rehab programs for pregnant women and women with children provide specific services and support. CONTEXT The 2019 and 2020 grant years were the only grants to close during the audit period. The 1994 base amount is $254,655 per grant year. The substance abuse program expenditures for SFY 2021 were $10,447,419 and SFY 2022 were $6,310,633 as reported on the SFY 2021, 2022 Schedule of Expenditures of Federal Awards for CFDA 93.959. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services develop corrective action and expend, at a minimum, the amount expended by the State for fiscal year 1994, for the availability of treatment services designed for pregnant women and women with dependent children either by establishing new programs or expanding the capacity of existing programs DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Commerce issued eight duplicate grant payments totaling $174,422.48. Since we reviewed the entire population for potential duplicate payments, this amount is considered the total known questioned costs. However, two of the payments, totaling, $64,164.66 are still outstanding and Department is working with other state agencies to stop the payments from clearing. CRITERIA Per the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Title VI, Sec. 601 (d), payments from the Fund may only be used to cover costs that: 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID?19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021. Duplicate payments are neither necessary nor reasonable. Federal regulation, 2 CFR 200.303, requires non-Federal entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Internal controls did not prevent these payments from being issued. EFFECT The Department of Commerce is not in compliance with Federal regulations as the duplicate payments were not an allowable use of Federal funds. CONTEXT The Department of Commerce utilized Coronavirus Relief Funds to provide approximately $81.7 million of net grants beginning July 1, 2020, and ending December 31, 2021. We identified eight duplicate grant payments totaling $174,422.48 out of $82,387,566 (6,139 payments) processed as one-time payments in the state's Peoplesoft system general ledger. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Commerce enhance internal controls to ensure duplicate payments are not made to recipients of Federal funds. DEPARTMENT OF COMMERCE RESPONSE The Department of Commerce agrees with this finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The 67th Legislative Assembly in 2021 Session Law, Senate Bill 2018, Section 8, appropriated $434,568 from the Coronavirus Relief Fund to the Department of Commerce for the tourism transportation improvement grant program for a grant to be provided to an organization dedicated to preserving and promoting a historic, tourism destination North Dakota city. We reviewed supporting documentation that showed the organization used the grant to defray the costs of adding a high-capacity elevator at an amphitheater. Such a capital improvement project is not considered a necessary expenditure incurred due to the COVID-19 public health emergency. In addition, the Department was unable to provide documentation the organization was impacted by the public health emergency and eligible for the CRF funds. This $434,568 grant is considered the total known questioned costs. This error was considered an isolated instance and was not projected to the sampled population. CRITERIA Per the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Title VI, Sec. 601 (d), payments from the Fund may only be used to cover costs that: 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID?19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021. The Federal Register dated January 15, 2021 (Vol. 86, No.10), states that if capital improvement projects are not necessary expenditures incurred due to the COVID-19 public health emergency, then Fund payments may not be used for such projects. However, payment for expenses associated with the provision of economic support in connection with the COVID-19 public health emergency, such as expenditures related to the provision of grants to small businesses to reimburse the costs of business interruption caused by required closures, would be allowable. There was no documentation supporting any costs of business interruption. In addition, the Federal Register states the prime recipient is responsible for determining the level and detail of documentation needed from the subrecipient of small business assistance to satisfy the requirements of section 601 (d) of the Social Security Act, however, there would need to be some proof that the small business was impacted by the public health emergency and was thus eligible for the CRF funds. Federal regulation, 2 CFR 200.303, requires non-Federal entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The "Standards for Internal Control in the Federal Government" published by the United States Government Accountability Office states that management obtains relevant data from reliable internal and external sources in a timely manner based on the identified information requirements. (GAO-14-704G para.13.04). CAUSE While the Department of Commerce complied with legislative intent by providing a grant to an organization dedicated to preserving and promoting a historic, tourism destination North Dakota city, the Department did not review available guidelines published by the U.S. Treasury Department for allowable costs under the Coronavirus Relief Fund. EFFECT The Department of Commerce is not in compliance with Federal regulations. The funded capital improvement project was not a necessary expenditure incurred due to the COVID-19 public health emergency. CONTEXT The Department of Commerce utilized Coronavirus Relief Funds to provide approximately $81.7 million in grants beginning July 1, 2020, and ending December 31, 2021. This $434,568 grant was the only grant identified at this location earmarked to a specific organization by the ND Legislative Assembly. The Department of Commerce processed payments through the state's accounting system (Peoplesoft) accounts payable and general ledger payment methods. The error was identified within the accounts payable payment population of $9,274,447 (77 payments) where individually significant payments totaled $4,295,314 (2 payments) and sampled payments totaled $4,973,554 (57 payments). The error was not projected within the sampled payments. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Commerce: A) Review available guidelines published by the U.S. Treasury Department for allowable costs under the Coronavirus Relief Fund, B) Obtain some proof that the organization was impacted by the public health emergency, and C) Request support from the organization for allowable expenditures incurred during the period beginning March 1, 2020, and ending on December 31, 2021, to offset the questioned costs; OR D) Recoup the money from the organization and refund the Department of the Treasury. DEPARTMENT OF COMMERCE RESPONSE The Department of Commerce utilized the funds made available to it by the 67th Legislative Assembly to accomplish the intent of said legislative body. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Commerce awarded a $4,879.94 grant to an applicant based on the estimated costs listed in the grant application. The Department subsequently requested proof of payment from the applicant and the applicant did not respond. As a result, the Department has requested a full refund and turned the matter over to the ND Attorney General's Office for collection. The amount of the grant award is considered the total known questioned costs. This error, projected to the entire population, results in an additional possible error of $690,025.74. CRITERIA Per the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Title VI, Sec. 601 (d), payments from the Fund may only be used to cover costs that: 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID?19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021. In addition, the Federal Register dated January 15, 2021, indicates the direct recipient of payments from the Fund is ultimately responsible for subrecipient compliance on the use of payments from the Fund. CAUSE The Department of Commerce did perform application reviews before awarding funding and performed audits of randomly selected businesses during the program period. However, the beneficiary has not cooperated with the Department's requests. EFFECT The Department of Commerce is not in compliance with Federal regulations. Without proper support, there is no way to determine if the beneficiary used the payment from the Fund on necessary expenditures incurred due to the public health emergency with respect to COVID-19. CONTEXT The Department of Commerce utilized Coronavirus Relief Funds to provide approximately $81.7 million in grants beginning July 1, 2020, and ending December 31, 2021. Where sampling was performed, the audit used a non-statistical sampling method. In a non-statistical sample of 40 of the 6,139 grant payments processed as one-time payments in the state's Peoplesoft general ledger, we identified one business that was not cooperative with the Department's requests for additional support and/or refund. Eight other beneficiaries selected for testing refunded the Department upon request. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Commerce continue its efforts to: A) Obtain support from the beneficiary for allowable expenditures under the Fund; or B) Recoup the grant award from the beneficiary and refund the U.S. Department of the Treasury. DEPARTMENT OF COMMERCE RESPONSE The Department of Commerce agrees with this finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Office of Management and Budget underreported both current period and cumulative expenditures by at least $117,366,999 on the project and expenditure report to the Department of Treasury covering the period of January 2022-March 2022. These expenditures were subsequently reported in the period of April 2022-June 2022. CRITERIA The interim final rule, issued May 17, 2021, states "The quarterly Project and Expenditure reports will include financial data, information on contracts and subawards over $50,000, types of projects funded, and other information regarding a recipient?s utilization of the award funds..... Treasury will provide additional guidance and instructions on the reporting requirements outlined above for the Fiscal Recovery Funds at a later date." (Federal Register Vol. 96, No.93 pgs. 26814-26815). The final rule published January 27, 2022 which amended the interim rule also stated "Recipients are advised to also consult Treasury?s Reporting and Compliance Guidance for additional information on program administration processes and requirements, including applicability of the Uniform Guidance". Federal Register Vol. 87, No.18 pg. 4340). Per this guidance which was first published June 17, 2021, recipients were required to submit Project and Expenditure reports that included current period expenditures and cumulative expenditures for reporting periods covering March 2021-December 2021 and January 2022-March 2022. (Compliance and Reporting Guidance - State and Local Fiscal Recovery Funds, V5.0 pg.17-19). The FY 2022 compliance supplement also states that the SEFA should report all aggregate expenditures for all four eligible use categories, not just the results of the revenue loss calculation or standard allowance. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Individual agencies paid SLFRF expenditures through the state's accounting system. OMB transferred reimbursement of expenditures to the individual agencies upon request. OMB reported information on the Federal project and expenditure reports based on OMB's transfers out to agencies. OMB tracked these transfers and reported the amount tracked as current period and cumulative period expenditures for their Project and Expenditure report. Expenditures may be reported on a cash or accrual basis. Some agencies did not request a transfer for paid expenditures or provide information relating to incurred expenditures to OMB prior to the reporting period end. The State Treasurer paid approximately $92 million and the Department of Human Services paid approximately $25 million during the period that was not transferred to these agencies until after the reporting period and not reported in the period January 2022-March 2022. EFFECT The timing of expenditures made using State and Local Fiscal Recovery Funds (SLFRF) was reported inaccurately to the Department of Treasury. CONTEXT In March 2021, the Federal Department of Treasury obligated funds to all 50 states under the State Local and Fiscal Recovery Fund to help states mitigate negative economic impacts caused by the COVID-19 pandemic. In November 2021, the special session of the 67th legislature obligated use of these funds to various agencies across the state. As the state was able to show that the revenue lost in years 2020 and 2021 exceeded the amount of the obligation from the Department of Treasury, the state was able to claim use of these funds under revenue replacement which allowed the state to utilize them for 'government operations' in addition to other specific uses and also allowing the state to report use of these funds under a single 'revenue replacement' project. The agencies began using the funds for purposes after they were obligated by the state legislature and began recording expenditures against the grant throughout our audit period. When these funds were initially disbursed to the state in March 2021, the funds were received by OMB and OMB then transferred reimbursement to agencies on request. North Dakota's project description on the reports was consistent and based on legislative appropriation. As reported, "Due to its extraordinary revenue loss during the pandemic, North Dakota?s entire SFRF allocation is dedicated to project expenditure category group 6 ? Revenue Replacement. Consequently, all expenditures will fall under project expenditure category 6.1 ? Provision of Government Services. Government services, as defined by the North Dakota legislature, includes economic development and workforce development initiatives, infrastructure and deferred maintenance initiatives, state service delivery and information technology improvements, and healthcare and emergency response initiatives." Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget develop corrective action and properly report the state's SLFRF current period expenditures and cumulative expenditures to the Department of Treasury as accumulated from each agency's records within the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding. The expenditures referenced in this audit finding were incurred by agencies prior to the period in which the Federal funds were included in the quarterly expenditure reports for the State and Local Fiscal Recovery Fund. Because OMB is responsible for the state reporting under this program, it is necessary to maintain some level of control over these funds. Consequently, OMB manages the funds centrally and developed a process to reimburse agencies for their eligible expenditures once expenditures were incurred and agencies requested reimbursement. As a result, reimbursement from the state?s allocation of SLFRF moneys always occurs after the agency expenditure. Funds are included in the Federal report for the period in which reimbursement from the SLFRF occurs. In some cases, this results in the agency expenditure occurring in a period prior to the period covered under the quarterly SLFRF report in which the reimbursement is reported. However, until reimbursement occurs, the expenditure is charged to a funding source other than SLFRF. All expenditures reimbursed through SLFRF are included in Federal reports for the period in which the reimbursement occurred. See ?Management?s Response and Corrective Action? section of this report. AUDITOR?S CONCLUDING COMMENTS While the Office of Management and Budget agrees with the finding, continuing Federal reporting based on the timing of reimbursed expenditures will likely cause further inaccurate SLFRF reporting. In addition, amounts transferred to agencies are not confirmed to not exceed incurred expenditures to ensure a reimbursement process is in place.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The State Treasurer's Office did not ensure all required information was provided to subrecipients of Coronavirus Relief Funds (CRF). In addition, the Office's internal controls were insufficient to ensure that subrecipients received communication regarding the necessary items. Required information not communicated included: ? Subrecipient's unique entity identifier, ? Federal award identification number, ? Federal award date, ? Subaward budget period start and end date, ? Total amount of Federal funds obligated to the subrecipient by the pass-through entity including the current financial obligation, ? Total amount of Federal award committed to the subrecipient by the pass-through entity, ? Name of awarding agency, ? Assistance listing number; and, ? Indirect cost rate for Federal award including if the de minimis rate is charged. CRITERIA Federal regulation, 2 CFR 200.332(a), requires pass-through entities to communicate specific required information to subrecipients. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The documents used to communicate award information to subrecipients did not contain all required items. EFFECT These required communications are intended to help subrecipients meet all their reporting requirements, and to meet all award terms. Subrecipients subject to Single Audits also need this information for their audits. CONTEXT The State Treasurer's Office was appropriated approximately $123.3 million of funds from the Coronavirus Relief Fund (CRF) to be distributed to local governments. Almost all the funding was allocated to cities and counties based on salary and benefit expenses for licensed law enforcement officers since Federal guidance allowed for CRF funding to be used to reimburse law enforcement payroll costs. The Director of the Office of Management and Budget sent out an email to the North Dakota Association of Counties and to the North Dakota League of Cities to be forwarded to city and county leaders that indicated such funding was available. A Certification Law Enforcement Payroll Reimbursement Form was attached to the email. The combined information provided in the body of the email and the certification form did not contain all required items. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the State Treasurer's Office: A) Communicate all required information of 2 CFR 200.332(a) to subrecipients. B) Develop procedures to ensure that all Coronavirus Relief Fund award information is communicated to subrecipients. OFFICE OF STATE TREASURER RESPONSE The Office of State Treasurer does agree with finding that we were not in compliance with Federal regulations related to providing required information to subrecipients of Coronavirus Relief Funds (CRF). See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Office of State Treasurer over-reimbursed a county for law enforcement payroll by $4,000. The amount of the overpayment is considered the total known questioned cost. This overpayment error, projected to the entire population, results in an additional possible error of $29,603. CRITERIA According to the Federal Register dated January 15, 2021, The CARES Act provides that payments from the Fund may only be used to cover costs that: 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID?19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021. In addition, Federal Register indicates the Treasury has provided, as an administrative accommodation, that a State, local, or tribal government may presume that public health and safety employees meet the substantially dedicated test unless the relevant government determines that specific circumstances indicate otherwise. All costs of such employees may be covered using payments for services provided during the period that begins on March 1, 2020, and ends on December 31, 2021. CAUSE A county overstated its payroll costs by $4,000 on the CARES Act Coronavirus Relief Fund Eligibility Certification Law Enforcement Payroll Reimbursement form submitted to the ND Office of Management and Budget. In addition, subrecipient monitoring procedures did not identify this subrecipient as high risk (steady monthly payroll and immaterial amount provided in total to the subrecipient). EFFECT The Office of State Treasurer was not in compliance with Federal regulations as an overpayment is not an allowable use of Federal funds. CONTEXT The Office of State Treasurer was appropriated Coronavirus Relief Fund monies to provide payments to cities, counties, and other political subdivisions. Such payments were primarily related to reimbursing cities and counties for law enforcement payroll costs incurred between March 1, 2020 to December 31, 2020. Our testing of Coronavirus Relief Fund program expenditures, identified one error from a sample size of 40 out of a possible 461 payments. The error was an overpayment to a county of $4,000 for law enforcement payroll costs. This overpayment, projected to the entire population of $123,322,297, resulted in an additional possible error of $29,603. However, since the State's program ended December 31, 2020, the cities and counties with known or projected likely questioned costs would have until December 31, 2021, to incur allowable program expenditures to offset any questions costs. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of State Treasurer: A) Request support from the county for allowable expenditures incurred during the period beginning March 1, 2020, and ending on December 31, 2021, to offset the overpayment; or B) Recoup the overpayment from the county and refund the Department of the Treasury. OFFICE OF STATE TREASURER RESPONSE The Office of State Treasurer does agree with finding that we were not in compliance with Federal regulations as an overpayment to the county for reimbursement for law enforcement payroll is not an allowable use of Federal funds. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Office of Management and Budget underreported both current period and cumulative expenditures by at least $117,366,999 on the project and expenditure report to the Department of Treasury covering the period of January 2022-March 2022. These expenditures were subsequently reported in the period of April 2022-June 2022. CRITERIA The interim final rule, issued May 17, 2021, states "The quarterly Project and Expenditure reports will include financial data, information on contracts and subawards over $50,000, types of projects funded, and other information regarding a recipient?s utilization of the award funds..... Treasury will provide additional guidance and instructions on the reporting requirements outlined above for the Fiscal Recovery Funds at a later date." (Federal Register Vol. 96, No.93 pgs. 26814-26815). The final rule published January 27, 2022 which amended the interim rule also stated "Recipients are advised to also consult Treasury?s Reporting and Compliance Guidance for additional information on program administration processes and requirements, including applicability of the Uniform Guidance". Federal Register Vol. 87, No.18 pg. 4340). Per this guidance which was first published June 17, 2021, recipients were required to submit Project and Expenditure reports that included current period expenditures and cumulative expenditures for reporting periods covering March 2021-December 2021 and January 2022-March 2022. (Compliance and Reporting Guidance - State and Local Fiscal Recovery Funds, V5.0 pg.17-19). The FY 2022 compliance supplement also states that the SEFA should report all aggregate expenditures for all four eligible use categories, not just the results of the revenue loss calculation or standard allowance. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Individual agencies paid SLFRF expenditures through the state's accounting system. OMB transferred reimbursement of expenditures to the individual agencies upon request. OMB reported information on the Federal project and expenditure reports based on OMB's transfers out to agencies. OMB tracked these transfers and reported the amount tracked as current period and cumulative period expenditures for their Project and Expenditure report. Expenditures may be reported on a cash or accrual basis. Some agencies did not request a transfer for paid expenditures or provide information relating to incurred expenditures to OMB prior to the reporting period end. The State Treasurer paid approximately $92 million and the Department of Human Services paid approximately $25 million during the period that was not transferred to these agencies until after the reporting period and not reported in the period January 2022-March 2022. EFFECT The timing of expenditures made using State and Local Fiscal Recovery Funds (SLFRF) was reported inaccurately to the Department of Treasury. CONTEXT In March 2021, the Federal Department of Treasury obligated funds to all 50 states under the State Local and Fiscal Recovery Fund to help states mitigate negative economic impacts caused by the COVID-19 pandemic. In November 2021, the special session of the 67th legislature obligated use of these funds to various agencies across the state. As the state was able to show that the revenue lost in years 2020 and 2021 exceeded the amount of the obligation from the Department of Treasury, the state was able to claim use of these funds under revenue replacement which allowed the state to utilize them for 'government operations' in addition to other specific uses and also allowing the state to report use of these funds under a single 'revenue replacement' project. The agencies began using the funds for purposes after they were obligated by the state legislature and began recording expenditures against the grant throughout our audit period. When these funds were initially disbursed to the state in March 2021, the funds were received by OMB and OMB then transferred reimbursement to agencies on request. North Dakota's project description on the reports was consistent and based on legislative appropriation. As reported, "Due to its extraordinary revenue loss during the pandemic, North Dakota?s entire SFRF allocation is dedicated to project expenditure category group 6 ? Revenue Replacement. Consequently, all expenditures will fall under project expenditure category 6.1 ? Provision of Government Services. Government services, as defined by the North Dakota legislature, includes economic development and workforce development initiatives, infrastructure and deferred maintenance initiatives, state service delivery and information technology improvements, and healthcare and emergency response initiatives." Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget develop corrective action and properly report the state's SLFRF current period expenditures and cumulative expenditures to the Department of Treasury as accumulated from each agency's records within the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding. The expenditures referenced in this audit finding were incurred by agencies prior to the period in which the Federal funds were included in the quarterly expenditure reports for the State and Local Fiscal Recovery Fund. Because OMB is responsible for the state reporting under this program, it is necessary to maintain some level of control over these funds. Consequently, OMB manages the funds centrally and developed a process to reimburse agencies for their eligible expenditures once expenditures were incurred and agencies requested reimbursement. As a result, reimbursement from the state?s allocation of SLFRF moneys always occurs after the agency expenditure. Funds are included in the Federal report for the period in which reimbursement from the SLFRF occurs. In some cases, this results in the agency expenditure occurring in a period prior to the period covered under the quarterly SLFRF report in which the reimbursement is reported. However, until reimbursement occurs, the expenditure is charged to a funding source other than SLFRF. All expenditures reimbursed through SLFRF are included in Federal reports for the period in which the reimbursement occurred. See ?Management?s Response and Corrective Action? section of this report. AUDITOR?S CONCLUDING COMMENTS While the Office of Management and Budget agrees with the finding, continuing Federal reporting based on the timing of reimbursed expenditures will likely cause further inaccurate SLFRF reporting. In addition, amounts transferred to agencies are not confirmed to not exceed incurred expenditures to ensure a reimbursement process is in place.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child and Adult Care Food program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 236 subrecipients receiving Federal grant agreements for the Child and Adult Care Food program. During 2021, there were 126 subrecipients and 110 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February of 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February of 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child and Adult Care Food program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not meet the maintenance of effort requirement for the 2021-2022 school year for the Supporting Effective Instruction program during the audit period. CRITERIA 34 CFR section 299.5a General. An LEA receiving funds under an applicable program listed in paragraph (b) of this section may receive its full allocation of funds only if the SEA finds that either the combined fiscal effort per student or the aggregate expenditures of State and local funds with respect to the provision of free public education in the LEA for the preceding fiscal year was not less than 90 percent of the combined fiscal effort per student or the aggregate expenditures for the second preceding fiscal year. SEC. 8521 of the Elementary and Secondary Education Act of 1965 (ESEA) (20 U.S.C. 7901) MAINTENANCE OF EFFORT. (a) IN GENERAL.?A local educational agency may receive funds under a covered program for any fiscal year only if the State educational agency finds that either the combined fiscal effort per student or the aggregate expenditures of the agency and the State with respect to the provision of free public education by the agency for the preceding fiscal year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding fiscal year, subject to the requirements of subsection (b). 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction indicated that a waiver for the maintenance of effort requirement for the 2021-2022 school year was received. However, they were unable to locate any documentation supporting the waiver. EFFECT The Department of Public Instruction is not in compliance with the 90% maintenance of effort requirement for the 2021-2022 school year. CONTEXT The Department of Public Instruction distributed $9,575,000 in Federal funds under the Supporting Effective Instruction program to 159 different school districts during the 2021-2022 school year. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure the maintenance of effort requirement is met in accordance with the Supporting Effective Instruction program guidelines. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not complete a risk assessment for any awards to subrecipients of the Supporting Effective Instruction program during the audit period. CRITERIA 2 CFR 200.332 ? states that all pass-through entities must: (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction overlooked completing subrecipient risk assessments due to the continued response of the COVID-19 pandemic. EFFECT Department of Public Instruction is not able to verify that subrecipients are compliant with Federal statutes, regulations, and terms and conditions of the subaward because there was no risk assessment completed for subrecipients in order to determine appropriate monitoring. CONTEXT The Department of Public Instruction distributed approximately $19,000,000 in Federal funds under the Supporting Effective Instruction program to 168 different subrecipients. While these subrecipients did receive monitoring procedures, no adjustments were made to individual subrecipients based on the results of risk assessments. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure subrecipient risk assessments are completed timely and used to determine the nature and extent of subrecipient monitoring for the Supporting Effective Instruction program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction (DPI) incorrectly included neglected or delinquent facilities as part of their Title IIA allocation to Local Educational Agencies (LEA). We selected a sample of 36 and identified a 100% error rate. The total known allocation error identified was $62,546.99. When projected against the population, the total projected error is $115,041.65. CRITERIA The Elementary and Secondary Education Act of 1965 (ESEA Section 2102(a)(1)) states, the State, acting through the State educational agency (DPI), shall award subgrants to eligible local educational agencies. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction was unaware that neglected and delinquent facilities could not be included in their Title IIA allocation calculations and on subrecipient's grant awards. EFFECT The Department did not comply with the allocation requirements to LEAs for Title IIA grants. CONTEXT The Department of Public Instruction allocated $9,503,744 in Federal funds to 183 school districts during the 2020-2021 school year and $9,603,024 in Federal funds to 170 school districts during the 2021-2022 school year. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure the Title IIA allocations are calculated based on the Federal requirements. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The NDDPI agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not complete any risk assessments for 3 of 5 subrecipients sampled and only completed a risk assessment once during our audit period for the other 2 sampled even though they received separate grants during each fiscal year. CRITERIA 2 CFR 200.332 (b) states "All pass-through entities must: Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency)." Department of Public Instruction awarded grants to subrecipients annually under this program. As such, a risk assessment should be completed annually for each subrecipient in which a new grant was awarded to them. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction did not complete risk assessments for subrecipients as the Comprehensive Literacy program had a high turnover of staff that were administering the program and the Department did not have this responsibility assigned to someone during parts of our audit period. EFFECT The Department of Public Instruction is not adjusting their subrecipient monitoring based on risk assessments completed for the subrecipients in compliance with Federal regulations. CONTEXT The Department of Public Instruction distributed approximately $23,250,000 in Federal funds under the Comprehensive Literacy program to 25 different local education agency subrecipients. While these subrecipients did receive monitoring procedures no adjustments were made to individual subrecipients based on results of risk assessments. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure risk assessments are completed for each grant their subrecipients receive and adjust monitoring procedures as necessary based on the results of these assessments. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Comprehensive Literacy program as all grant templates used did not include the subaward budget period start and end date. CRITERIA 2 CFR 200.332 states required information that pass-through entities must disclose to subrecipients, including paragraph (a)(1)(vi) "Subaward Budget Period State and End Date" 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Comprehensive Literacy Program did not update their grant templates to include a new requirement that was added to the relevant Federal codes and went into effect January 1, 2021. EFFECT Subrecipients may not have been made aware of all necessary grant information and requirements. CONTEXT The Comprehensively Literacy program grants subawards annually under each of the Federal grants it received under the program. During our audit period, there were 2 Federal awards granted out to subrecipients a total of 35 times each fiscal year. The grant agreements shared a template each year and it was found that all were missing a newly required piece of information after the relevant CFR was modified and an update went into effect on January 1, 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure that subrecipients are made aware of all required grant award information. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Comprehensive Literacy program in the 5 subawards tested out of a total 35 subawards issued during our audit period. 3 of the subawards tested were also submitted a month later than required by Federal regulations after funds were originally obligated in November of 2020 and the reports were not made until January of 2021. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A, prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also according to this regulation, prime awardees must report information about each obligating action per the instructions posted on the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award project description "Describes the sub-award project" with an added note to "be precise as possible" and "not use any abbreviations or acronyms." The sub-award number is defined as "This is the number used by the prime award to uniquely track the sub-award (their own numbering system for the sub-award)." The sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee". 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction submitted inaccurate information based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The Department also did not submit FFATA reports in a timely manner due to not recognizing that obligations were not made to subawardees until a month after reimbursement payments were made against the obligations. EFFECT Subaward information that is published to the USAspending.gov website was inaccurate and published later than required by Federal regulations. CONTEXT During our audit period the Department of Public Instruction (DPI) issued a total of 35 subawards to 20 unique subrecipients under the Comprehensive Literacy Program for sub-awardees that had obligations of $30,000 or more. DPI reported all of these sub-awards, totaling of $25.2 million, to the FSRS system. While it appears all required reports were submitted and DPI did report the information directly from their grant awards, some of the fields were reported using the wrong information in error for all of the sub-awards tested. DPI also did not report all of the subawards within the required time based on when they were originally awarded. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Education Stabilization Fund program Federal Funding Accountability and Transparency Act (FFATA) reporting. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A: prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also, according to this regulation, prime awardees must report information about each obligating action per the instructions posted in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee" and the data model also states that the amount of the sub-award is "The net dollar amount of Federal funds awarded to the Sub-awardee including modifications". Title 2 of the Code of Federal Regulations was updated to increase the subaward reporting requirement for grants from $25,000 to $30,000. Only subawards $30,000 or above require reports for prime grant awards as of November 12, 2020 as seen on the Final Registry - Guidance for Grants and Agreements - OMB Rule 85 FR 49506. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction (DPI) submitted inaccurate information and amounts based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. DPI also had a misunderstanding of the reporting threshold. EFFECT Subaward information that was reported was inaccurate and published later than required by Federal regulations. Subawards for ESSER I discretionary funds were not reported and two ESSER I awards were not reported. CONTEXT With 3 Federal grants, the Department of Public Instruction issued a total of 496 awards to 170 unique subrecipients for a total amount of $435,446,613.83 during our audit period of 7/1/2020-6/30/2022 that were susceptible to FFATA reporting. While it appears all required reports were submitted for ESSER II and ESSER III related awards, ESSER I discretionary fund awards did not get reported as well as any subrecipients that received more than $25,000 but less than $30,000. The ESSER I Federal Award also states that grants funded at $25,000 or more that meet the reporting conditions are to be reported. DPI did report the information directly from their grant awards, but DPI did not report all of the subawards within the required time based on when they were originally awarded. With ESSER III funds, DPI had to do some redistribution of funds causing their FFATA reporting to be overstated. DPI double-reported their awards instead of reporting the adjustment from the redistribution since the initial allocation was already reported. In our testing, the overstatement was $3,278,598. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website and in the grant award. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Education Stabilization Fund program Federal Funding Accountability and Transparency Act (FFATA) reporting. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A: prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also, according to this regulation, prime awardees must report information about each obligating action per the instructions posted in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee" and the data model also states that the amount of the sub-award is "The net dollar amount of Federal funds awarded to the Sub-awardee including modifications". Title 2 of the Code of Federal Regulations was updated to increase the subaward reporting requirement for grants from $25,000 to $30,000. Only subawards $30,000 or above require reports for prime grant awards as of November 12, 2020 as seen on the Final Registry - Guidance for Grants and Agreements - OMB Rule 85 FR 49506. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction (DPI) submitted inaccurate information and amounts based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. DPI also had a misunderstanding of the reporting threshold. EFFECT Subaward information that was reported was inaccurate and published later than required by Federal regulations. Subawards for ESSER I discretionary funds were not reported and two ESSER I awards were not reported. CONTEXT With 3 Federal grants, the Department of Public Instruction issued a total of 496 awards to 170 unique subrecipients for a total amount of $435,446,613.83 during our audit period of 7/1/2020-6/30/2022 that were susceptible to FFATA reporting. While it appears all required reports were submitted for ESSER II and ESSER III related awards, ESSER I discretionary fund awards did not get reported as well as any subrecipients that received more than $25,000 but less than $30,000. The ESSER I Federal Award also states that grants funded at $25,000 or more that meet the reporting conditions are to be reported. DPI did report the information directly from their grant awards, but DPI did not report all of the subawards within the required time based on when they were originally awarded. With ESSER III funds, DPI had to do some redistribution of funds causing their FFATA reporting to be overstated. DPI double-reported their awards instead of reporting the adjustment from the redistribution since the initial allocation was already reported. In our testing, the overstatement was $3,278,598. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website and in the grant award. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not formally track that letters of intent were received from all non-public schools. CRITERIA 18005(a) CARES Act: Section 18005(a) of the CARES Act requires a Local Educational Agency (LEA) that receives funds under the ESSER Fund to provide equitable services in the same manner as provided under section 1117 of the Elementary and Secondary Education Act of 1965 (ESEA) to students and teachers in non-public schools, as determined in consultation with representatives of non-public schools. 1117(b)(1) of the ESEA: (b)CONSULTATION. ? (1) IN GENERAL.?To ensure timely and meaningful consultation, a local educational agency shall consult with appropriate private school officials during the design and development of such agency?s programs under this part. Such agency and private school officials shall both have the goal of reaching agreement on how to provide equitable and effective programs for eligible private school children, the results of which agreement shall be transmitted to the ombudsman designated under subsection (a)(3)(B). 34 CFR 76.665(b)(1): An LEA must promptly consult with representatives of non-public elementary and secondary schools during the design and development of the LEA's plans to spend funds from a CARES Act program and before the LEA makes any decision affecting the opportunities of students and teachers in non-public schools to benefit from those funds. As provided in section 1117(b)(1) of the ESEA, the LEA and non-public school officials shall both have the goal of reaching timely agreement on how to provide equitable and effective programs for non-public school students and teachers. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction stated that they manually tracked the letters of intent but did not retain a record of this process to support that all letters of intent were received. EFFECT The lack of adequate procedures for tracking non-public school letters of intent increase the risk of non-public schools not participating in the program. CONTEXT The Department of Public Instruction (DPI) is responsible for initiating the consulting process by contacting representatives in all non-public schools in the state to notify them of the opportunity for their students and teachers to obtain equitable services. If non-public school officials want equitable services for their students and teachers, DPI must consult with those officials before DPI makes any decision that affects the opportunity of non-public school to participate in the activities funded under the CARES Act programs. If a non-public school declines to participate in the CARES Act programs or does not respond to DPI's good-faith effort to make contact, DPI has no further responsibility to provide equitable services to students or teachers in that school. However, DPI must be able to demonstrate that it made a good faith effort to contact all the nonpublic schools in the state. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction improve procedures for tracking to ensure all Education Stabilization program letters of intent from non-public schools are received in order to verify all of them were contacted. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with this finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Education Stabilization Fund program Federal Funding Accountability and Transparency Act (FFATA) reporting. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A: prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also, according to this regulation, prime awardees must report information about each obligating action per the instructions posted in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee" and the data model also states that the amount of the sub-award is "The net dollar amount of Federal funds awarded to the Sub-awardee including modifications". Title 2 of the Code of Federal Regulations was updated to increase the subaward reporting requirement for grants from $25,000 to $30,000. Only subawards $30,000 or above require reports for prime grant awards as of November 12, 2020 as seen on the Final Registry - Guidance for Grants and Agreements - OMB Rule 85 FR 49506. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction (DPI) submitted inaccurate information and amounts based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. DPI also had a misunderstanding of the reporting threshold. EFFECT Subaward information that was reported was inaccurate and published later than required by Federal regulations. Subawards for ESSER I discretionary funds were not reported and two ESSER I awards were not reported. CONTEXT With 3 Federal grants, the Department of Public Instruction issued a total of 496 awards to 170 unique subrecipients for a total amount of $435,446,613.83 during our audit period of 7/1/2020-6/30/2022 that were susceptible to FFATA reporting. While it appears all required reports were submitted for ESSER II and ESSER III related awards, ESSER I discretionary fund awards did not get reported as well as any subrecipients that received more than $25,000 but less than $30,000. The ESSER I Federal Award also states that grants funded at $25,000 or more that meet the reporting conditions are to be reported. DPI did report the information directly from their grant awards, but DPI did not report all of the subawards within the required time based on when they were originally awarded. With ESSER III funds, DPI had to do some redistribution of funds causing their FFATA reporting to be overstated. DPI double-reported their awards instead of reporting the adjustment from the redistribution since the initial allocation was already reported. In our testing, the overstatement was $3,278,598. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website and in the grant award. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Education Stabilization Fund program Federal Funding Accountability and Transparency Act (FFATA) reporting. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A: prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also, according to this regulation, prime awardees must report information about each obligating action per the instructions posted in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee" and the data model also states that the amount of the sub-award is "The net dollar amount of Federal funds awarded to the Sub-awardee including modifications". Title 2 of the Code of Federal Regulations was updated to increase the subaward reporting requirement for grants from $25,000 to $30,000. Only subawards $30,000 or above require reports for prime grant awards as of November 12, 2020 as seen on the Final Registry - Guidance for Grants and Agreements - OMB Rule 85 FR 49506. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction (DPI) submitted inaccurate information and amounts based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. DPI also had a misunderstanding of the reporting threshold. EFFECT Subaward information that was reported was inaccurate and published later than required by Federal regulations. Subawards for ESSER I discretionary funds were not reported and two ESSER I awards were not reported. CONTEXT With 3 Federal grants, the Department of Public Instruction issued a total of 496 awards to 170 unique subrecipients for a total amount of $435,446,613.83 during our audit period of 7/1/2020-6/30/2022 that were susceptible to FFATA reporting. While it appears all required reports were submitted for ESSER II and ESSER III related awards, ESSER I discretionary fund awards did not get reported as well as any subrecipients that received more than $25,000 but less than $30,000. The ESSER I Federal Award also states that grants funded at $25,000 or more that meet the reporting conditions are to be reported. DPI did report the information directly from their grant awards, but DPI did not report all of the subawards within the required time based on when they were originally awarded. With ESSER III funds, DPI had to do some redistribution of funds causing their FFATA reporting to be overstated. DPI double-reported their awards instead of reporting the adjustment from the redistribution since the initial allocation was already reported. In our testing, the overstatement was $3,278,598. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website and in the grant award. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report accurate information for the Education Stabilization Fund program Federal Funding Accountability and Transparency Act (FFATA) reporting. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Per Federal regulation, 2 CFR 170, Appendix A: prime awardees are required to submit a Federal Financial Assistance Transparency Act (FFATA) report for each subaward made no later than the end of the month following the month in which an obligation was made. Also, according to this regulation, prime awardees must report information about each obligating action per the instructions posted in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. The FSRS website also has a data definition guide that defines what is supposed to be submitted in each available field. Per this definition guide: the sub-award obligation action date is "the date of the sub-award obligation." The amount of the sub-award is "the amount of the sub-contract award for this sub-awardee" and the data model also states that the amount of the sub-award is "The net dollar amount of Federal funds awarded to the Sub-awardee including modifications". Title 2 of the Code of Federal Regulations was updated to increase the subaward reporting requirement for grants from $25,000 to $30,000. Only subawards $30,000 or above require reports for prime grant awards as of November 12, 2020 as seen on the Final Registry - Guidance for Grants and Agreements - OMB Rule 85 FR 49506. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE North Dakota Department of Public Instruction (DPI) submitted inaccurate information and amounts based on the instructions and data definitions found at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. DPI also had a misunderstanding of the reporting threshold. EFFECT Subaward information that was reported was inaccurate and published later than required by Federal regulations. Subawards for ESSER I discretionary funds were not reported and two ESSER I awards were not reported. CONTEXT With 3 Federal grants, the Department of Public Instruction issued a total of 496 awards to 170 unique subrecipients for a total amount of $435,446,613.83 during our audit period of 7/1/2020-6/30/2022 that were susceptible to FFATA reporting. While it appears all required reports were submitted for ESSER II and ESSER III related awards, ESSER I discretionary fund awards did not get reported as well as any subrecipients that received more than $25,000 but less than $30,000. The ESSER I Federal Award also states that grants funded at $25,000 or more that meet the reporting conditions are to be reported. DPI did report the information directly from their grant awards, but DPI did not report all of the subawards within the required time based on when they were originally awarded. With ESSER III funds, DPI had to do some redistribution of funds causing their FFATA reporting to be overstated. DPI double-reported their awards instead of reporting the adjustment from the redistribution since the initial allocation was already reported. In our testing, the overstatement was $3,278,598. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensure FFATA reports are submitted timely and accurately according to the instructions and definitions posted on the FSRS website and in the grant award. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the Recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Health did not ensure all required grant award information for Coronavirus Relief Funds (CRF) was provided to subrecipients. In addition, the Department's internal controls were insufficient to ensure that subrecipients received communication regarding the necessary items. Required information not communicated included: ? Subrecipient's unique entity identifier, ? Federal Award Identification Number, ? Total amount of Federal funds obligated to the subrecipient by the pass-through entity including the current financial obligation, ? Name of awarding agency, ? Assistance Listing Number; and, ? Indirect cost rate for Federal award including if the de minimis rate is charged. CRITERIA Federal regulation, 2 CFR 200.332(a), requires pass-through entities to communicate specific required information to subrecipients. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Health did not utilize its traditional grant template agreement to extend CRF dollars to ambulance, fire, school districts, and hospitals. Instead, the Department used a CARES Act Coronavirus Relief Fund Eligibility Certification form which did not contain all required items. EFFECT These required communications are intended to help subrecipients meet all their reporting requirements and to meet all award terms. Subrecipients subject to Single Audits also need this information for their audits. CONTEXT The Department of Health utilized its traditional grant template agreement for $31.7 million in grants provided to 28 local public health units which included the best information available to describe the Federal award and subaward. However, the Department did not utilize its traditional grant template agreement to extend up to $29.8 million of CRF dollars to 121 other entities, including ambulance, fire, and school districts and hospitals. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Health: A) Communicate all required information of 2 CFR 200.332(a) to subrecipients. B) Develop procedures to ensure that all Coronavirus Relief Fund award information is communicated to subrecipients. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly Department of Health) agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Health did not evaluate each subrecipient's risk of noncompliance. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR 200.332, all pass-through entities must evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. All pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Per 2 CFR 200.332(d)(2), pass through entities are required to ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. CAUSE The Department of Health primarily relied on risk assessments previously conducted for entities that had entered into other traditional grant agreements with the agency. Risk assessments were not conducted on all entities that only received CRF dollars and had not entered into other traditional grant agreements. The Department of Health indicated that prior to COVID-19, all subrecipients were subjected to sampling for a desk review. However, during COVID-19, the Department focused monitoring efforts on the 28 local public health units and pulled one random month to review expenditures being charged. EFFECT Monitoring activities conducted during our audit period were not determined based on subrecipient risk of noncompliance. CONTEXT The Department of Health provided $61.5M of CRF dollars to 149 subrecipients as follows: ? $31.7M to 28 local public health units ? $25M to 7 hospitals and related organizations ? $4.8M to 114 other entities, primarily ambulance districts We tested 15 of the 149 subrecipients (13 randomly selected and 2 individually significant items). Based on our testing and information provided by the Department of Health, we identified the following: ? Department of Health performed adequate during the award monitoring on 6 of the 15 subrecipients selected. ? Department of Health monitored 4 subrecipients not required to have a Single Audit. Six subrecipients selected had Single Audits while the remaining five subrecipients, which received less than $100,000 in CRF funding, were not monitored nor had a Single Audit. ? Department of Health did not conduct risk assessments on 4 of the 15 subrecipients selected, mostly ambulance districts that only received CRF dollars. The Department of Health acknowledged subjecting the 28 local public health units to subrecipient monitoring sampling. The Department tested $919,816 out of $61,521,414 of CRF payments to subrecipients or 1.5%. In addition, we noted the Department had assigned a risk level to the local public health units and hospitals selected for testing, as well as 53 ambulance districts. Lastly, the subrecipients (local public health units, hospitals, and ambulance districts) were known to be impacted by the COVID-19 pandemic, which could make such entities low risk for noncompliance. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Health conduct during-the-award monitoring activities as required for pass-through entities in accordance with 2 CFR 200.332. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly Department of Health) agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Health Department did not receive audit reports for all subrecipients that received greater than $750,000 or verify that all subrecipients receiving less than $750,000 from the Health Department were not subject to requirements under 2 CFR 200 Subpart F. One subrecipient received over $980,000 and the Health Department did not receive an audit report from this entity. There were 6 additional subrecipients that received less than $750,000 but there were no verifications to ensure additional Federal funds weren't received from another source. Any of these entities that received greater than $750,000 in Federal funds from all sources would be required to receive an audit under 2 CFR 200 Subpart F. CRITERIA 2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. CAUSE The tracking spreadsheet for subrecipient audit reports is not being used to verify that all subrecipients received an audit or a certification that an audit is not required. EFFECT The Health Department is not meeting the requirements of a pass through entity required by 2 CFR 200 Subpart F. CONTEXT There were 27 subrecipients that received Federal funds from the Health Department which were subject to monitoring during our audit period. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Health Department ensure all subrecipients obtain audits or a certification that an audit is not required in accordance with 2 CFR 200 Subpart F. DEPARTMENT OF HEALTH RESPONSE The Public Health Division of the Department of Health and Human Services (formerly the Department of Health) agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services, Emergency Rental Assistance (ERA) program, incorrectly calculated monthly rental assistance amounts by using the incorrect monthly rent amount and transition percentage for the applicable month of assistance. More specifically, 1 out of the 60 households sampled received monthly assistance in excess of the proper calculated payment amounts resulting in total overpayments of $977 and total likely projected questioned costs of $155,267. CRITERIA 2 CFR 200.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. ND ERA Policies & Procedures states that, "North Dakota will implement a payment coverage structure that provides applicants with rental assistance required while supporting their transition from relying on rental assistance. Availability of assistance will be structured as follows: Months one (1) through six (6): 100% of rent will be eligible, Months seven (7) through ten (10): 85% of rent will be eligible, Months (11) through eighteen (18): 70% of rent will be eligible". The outlined policy allows for an individual to receive up to twelve months of total rental assistance including 100% of their monthly rent for the first 6 months, 85% of their monthly rent for the next four months, and 70% of their monthly rent for the final two months. CAUSE The Department of Human Services, Emergency Rental Assistance (ERA) program, review did not identify correct monthly rent amounts and applied incorrect assistance percentages used to calculate the monthly ERA payments. EFFECT The Department issued payments that were not allowable under the Emergency Rental Assistance program. CONTEXT During state fiscal years, approximately 11,178 applications, totaling $46 million were processed by the Department. The State Auditor's office performed a test of sixty applications with one error that resulted in an overpayment of $977 and projected to additional likely questioned costs of $155,267. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services (ERA Program) ensure monthly payment amounts are calculated correctly and reviewed for accuracy. Additionally, we recommend the Department ensure the improper payments are recouped through the ERA program's refunding process. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department of Human Services agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Office of Management and Budget underreported both current period and cumulative expenditures by at least $117,366,999 on the project and expenditure report to the Department of Treasury covering the period of January 2022-March 2022. These expenditures were subsequently reported in the period of April 2022-June 2022. CRITERIA The interim final rule, issued May 17, 2021, states "The quarterly Project and Expenditure reports will include financial data, information on contracts and subawards over $50,000, types of projects funded, and other information regarding a recipient?s utilization of the award funds..... Treasury will provide additional guidance and instructions on the reporting requirements outlined above for the Fiscal Recovery Funds at a later date." (Federal Register Vol. 96, No.93 pgs. 26814-26815). The final rule published January 27, 2022 which amended the interim rule also stated "Recipients are advised to also consult Treasury?s Reporting and Compliance Guidance for additional information on program administration processes and requirements, including applicability of the Uniform Guidance". Federal Register Vol. 87, No.18 pg. 4340). Per this guidance which was first published June 17, 2021, recipients were required to submit Project and Expenditure reports that included current period expenditures and cumulative expenditures for reporting periods covering March 2021-December 2021 and January 2022-March 2022. (Compliance and Reporting Guidance - State and Local Fiscal Recovery Funds, V5.0 pg.17-19). The FY 2022 compliance supplement also states that the SEFA should report all aggregate expenditures for all four eligible use categories, not just the results of the revenue loss calculation or standard allowance. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Individual agencies paid SLFRF expenditures through the state's accounting system. OMB transferred reimbursement of expenditures to the individual agencies upon request. OMB reported information on the Federal project and expenditure reports based on OMB's transfers out to agencies. OMB tracked these transfers and reported the amount tracked as current period and cumulative period expenditures for their Project and Expenditure report. Expenditures may be reported on a cash or accrual basis. Some agencies did not request a transfer for paid expenditures or provide information relating to incurred expenditures to OMB prior to the reporting period end. The State Treasurer paid approximately $92 million and the Department of Human Services paid approximately $25 million during the period that was not transferred to these agencies until after the reporting period and not reported in the period January 2022-March 2022. EFFECT The timing of expenditures made using State and Local Fiscal Recovery Funds (SLFRF) was reported inaccurately to the Department of Treasury. CONTEXT In March 2021, the Federal Department of Treasury obligated funds to all 50 states under the State Local and Fiscal Recovery Fund to help states mitigate negative economic impacts caused by the COVID-19 pandemic. In November 2021, the special session of the 67th legislature obligated use of these funds to various agencies across the state. As the state was able to show that the revenue lost in years 2020 and 2021 exceeded the amount of the obligation from the Department of Treasury, the state was able to claim use of these funds under revenue replacement which allowed the state to utilize them for 'government operations' in addition to other specific uses and also allowing the state to report use of these funds under a single 'revenue replacement' project. The agencies began using the funds for purposes after they were obligated by the state legislature and began recording expenditures against the grant throughout our audit period. When these funds were initially disbursed to the state in March 2021, the funds were received by OMB and OMB then transferred reimbursement to agencies on request. North Dakota's project description on the reports was consistent and based on legislative appropriation. As reported, "Due to its extraordinary revenue loss during the pandemic, North Dakota?s entire SFRF allocation is dedicated to project expenditure category group 6 ? Revenue Replacement. Consequently, all expenditures will fall under project expenditure category 6.1 ? Provision of Government Services. Government services, as defined by the North Dakota legislature, includes economic development and workforce development initiatives, infrastructure and deferred maintenance initiatives, state service delivery and information technology improvements, and healthcare and emergency response initiatives." Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget develop corrective action and properly report the state's SLFRF current period expenditures and cumulative expenditures to the Department of Treasury as accumulated from each agency's records within the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding. The expenditures referenced in this audit finding were incurred by agencies prior to the period in which the Federal funds were included in the quarterly expenditure reports for the State and Local Fiscal Recovery Fund. Because OMB is responsible for the state reporting under this program, it is necessary to maintain some level of control over these funds. Consequently, OMB manages the funds centrally and developed a process to reimburse agencies for their eligible expenditures once expenditures were incurred and agencies requested reimbursement. As a result, reimbursement from the state?s allocation of SLFRF moneys always occurs after the agency expenditure. Funds are included in the Federal report for the period in which reimbursement from the SLFRF occurs. In some cases, this results in the agency expenditure occurring in a period prior to the period covered under the quarterly SLFRF report in which the reimbursement is reported. However, until reimbursement occurs, the expenditure is charged to a funding source other than SLFRF. All expenditures reimbursed through SLFRF are included in Federal reports for the period in which the reimbursement occurred. See ?Management?s Response and Corrective Action? section of this report. AUDITOR?S CONCLUDING COMMENTS While the Office of Management and Budget agrees with the finding, continuing Federal reporting based on the timing of reimbursed expenditures will likely cause further inaccurate SLFRF reporting. In addition, amounts transferred to agencies are not confirmed to not exceed incurred expenditures to ensure a reimbursement process is in place.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services made payments under the Vocational Rehabilitation program outside of the period of performance for the 2019 grant award which had a period of performance of 10/1/18 - 9/30/19 with an allowable liquidation period through 1/31/2021. More specifically, the program charged $2,454 to the 2019 grant award when the underlying obligations actually occurred during the 2020 grant award period of performance. CRITERIA The following criteria note that Federal funds must be obligated by the end of the two-year period of performance window and those obligations must be liquidated within 120 days after the end date of period of performance. 2 CFR 200.344 requires: " Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.? 34 CFR 361.64 requires: " (a) Except as provided in paragraph (b) of this section, any Federal funds, including reallotted funds, that are appropriated for a fiscal year to carry out a program under this part that are not obligated by the State by the beginning of the succeeding fiscal year and any program income received during a fiscal year that is not obligated by the State by the beginning of the succeeding fiscal year remain available for obligation by the State during that succeeding fiscal year. (b) Federal funds appropriated for a fiscal year remain available for obligation in the succeeding fiscal year only to the extent that the State met the matching requirement for those Federal funds by obligating, in accordance with 34 CFR 76.707, the non-Federal share in the fiscal year for which the funds were appropriated." The following criteria pertains to the establishment and maintenance of effective internal control to ensure payments are made within the correct period of performance. 2 CFR 200.303 states the non-Federal entity must, "establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." CAUSE The Department of Human Services, Vocational Rehabilitation Program, review of the expenditure period of performance, as outlined in its period of performance procedures, were not followed. Therefore, the grant award monitoring procedures were unable to detect payments made outside of the period of performance. EFFECT Unallowable costs totaling $2,454 were charged to the 2019 grant award with a total projected questioned cost amount of $41,717. CONTEXT The Department of Human Services, Vocational Rehabilitation program, had expenditures of $412,720 after the obligation period for the 2019 and 2020 awards. Of this amount, one payment totaling $2,454 was identified by sampling as an error. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-019 was reported in the immediate prior year. Findings 2018-031 and 2016-053 were reported in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Human Services follow its procedures to prevent and detect Vocational Rehabilitation payments from occurring outside the period of performance. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department of Health and Human Services agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION Department of Commerce did not complete a risk assessment for subawards to Community Action Agencies and, therefore, risk assessments are not being used to determine the nature and extent of subrecipient monitoring. CRITERIA Pass-through entities are required (45 CFR 75.352(b)) to evaluate each subrecipients risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipients prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with subpart F, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of HHS awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from an HHS awarding agency). 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Commerce did not complete risk assessments during the audit period due to COVID-19 as the Department was unable to go on-site to assess the risk at each Community Action Agency. EFFECT Department of Commerce may be performing insufficient subrecipient monitoring of high-risk subrecipients. CONTEXT Payments to the 7 Community Action Agencies that received payment as subrecipients under the LIHEAP program totaled $12,171,758 during fiscal years 2021 and 2022. The Department of Commerce did not complete risk assessments during the audit period due to COVID-19 as the Department was unable to go on-site an assess the risk at each Community Action Agency. The Department did continue to monitor the Community Action Agencies through monitoring and ensuring that the Community Action Agencies received their Federal Single Audits. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Commerce ensure subrecipient risk assessments are completed and used to determine the nature and extent of subrecipient monitoring. DEPARTMENT OF COMMERCE RESPONSE The Department of Commerce agrees with this finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services (DHS) is incorrectly identifying the ND Department of Commerce (Commerce) as a subrecipient for reporting purposes. DHS entered into $8,900,000 worth of subcontracts for the audit period 7/1/20-6/30/22. $8,000,000 was contracted with the Department of Commerce (4 contracts), who then subawarded 27 contracts worth $7,890,001 to 7 different Community Action Agencies. The other $900,000 was correctly subawarded by DHS through 2 contracts to Community Options for outreach services. DHS entered into contracts with Commerce, which Commerce then subawarded to Community Action Agencies for Weatherization and Emergency Furnace programs under the Low-Income Home Energy Assistance Program (LIHEAP). DHS reported the 4 contracts with Commerce for FFATA. All 27 contracts with the Community Action Agencies by Commerce were not correctly identified as subawards for FFATA reporting. Because of this, the FFATA reporting does not accurately show the subawards of the state. In addition, by incorrectly reporting the Department of Commerce as a subrecipient, DHS overstated the total amount subawarded by $109,999 as the Department of Commerce used this amount for administrative expenses. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Non-federal entities are required to submit FFATA reporting according to 45 CFR 75.300(b). Per Part 3 of the Compliance Supplement, Subrecipient Monitoring section, "Transfers of Federal awards to another component of the same auditee under 2 CFR Part 200, Subpart F, do not constitute a subrecipient or contractor relationship". The ND Department of Commerce, receiving Federal funds from the ND Department of Human Services to subaward to the Community Action Agencies, is a pass-through entity according to the following definitions. ? 45 CFR 75.2 Pass-through Entity means a non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program. ? 45 CFR 75.2 Subrecipient means an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a Federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. ? 45 CFR 75.2 Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE DHS did not properly distinguish another state agency (Commerce) as a pass-through entity in subrecipient tracking methods and failed to identify the subawards to Community Action Agencies. EFFECT DHS incorrectly identified funds passed through to Commerce as a subrecipient relationship and reported subawards paid to Commerce in FFATA reporting. Subawards that the ND has with Community Action Agencies were not reported in the Federal Funds Accountability and Transparency Act (FFATA) reporting. In doing so, DHS and Commerce did not report 27 subawards to Community Action Agencies. Since DHS did report subaward amounts with Commerce, the net error amount is $109,999 for the audit period 7/1/20 - 6/30/22. CONTEXT The North Dakota Department of Human Services administers the LIHEAP program and contracts with the Department of Commerce to administer the Weatherization and Emergency Furnace programs under the LIHEAP program. Commerce entered into 27 contracts between 7 Community Action Agencies for a total amount of $7,890,001 during the audit period 7/1/20-6/30/22. The Community Action Agencies were not identified as the recipients of the subawards for LIHEAP. This resulted in a qualitative reporting error and a net reporting amount error of $109,999. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services coordinate with the Department of Commerce to properly report subawards of the state under the LIHEAP program for FFATA reporting. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified an individual receiving LIHEAP benefits when they were living at one of their parents' houses rent-free. There was no rental contract on file or adequate documentation to allow this individual to receive LIHEAP benefits. We identified a known error of $749.37. When projected against the population, the remaining likely projected error is $302,293.17. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. DHS LIHEAP policy 415-20-10-35, "Households that receive rent-free housing including fuel as a required condition of part of an employment agreement, or as a gift, or through legal action (separation/divorce), are NOT vulnerable to the rising cost of heat and are therefore not eligible for heating assistance from LIHEAP." CAUSE County eligibility workers did not obtain enough documentation to confirm that the case was in compliance with DHS LIHEAP policy 415-20-10-35. EFFECT Improper overpayment of LIHEAP benefits. CONTEXT During state fiscal years, approximately 189,548 payments, totaling $34 million, were processed through the Department of Human Services' Legacy and SPACES eligibility systems. From the SPACES system there were 88,917 payments totaling $15.5 million and from the LEGACY system there were 100,631 payments totaling $18.4 million. The State Auditor's office performed a test of 80 payments, 40 from LEGACY and 40 from SPACES. The SPACES sample of payments was stratified with 66,548 payments under $200 (13 tested); 21,606 payments from $200-$999 (tested 24); and 763 payments with amount over $1,000 (tested 3). The error was identified in eligibility testing of payment records from the SPACES system which were approximately $15.5 million, and projected within stratified payments individually less than $200 ($5.28 million, 66,548 payments). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure adequate rental documentation is on file and proper eligibility determinations of the Low-Income Home Energy Assistance Program (LIHEAP) are made. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services (DHS) did not prevent duplicate LIHEAP benefit payments. Potential duplicate payments made during the audit period were identified by analyzing cases with combinations of the same case number (SPACES system) or Social Security Number (SSN) (Legacy system), Fuel Type, Benefit Month, Provider, and Amount. In addition, duplicate SSNs were analyzed to identify individuals in more than one case meaning that individuals would be counted in the number of persons in more than one household for calculating LIHEAP benefit payments. The duplicate payment test identified a known duplicate payments error of $1,415 and, projected to the population, a remaining likely questioned cost of $181,183. The duplicate SSN test identified a known overpayment of $528 and, projected to the population, a remaining likely questioned cost of $2,961. There was a 35% (7 of 20 tested) error rate in duplicate payments and a 90% (18 of 20 tested) error rate in duplicate SSNs. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. DHS policy 415-15-10-20 for verification of eligibility states verification of the applicant's statement of resources, or any other factor of eligibility and benefit determination, may be required whenever it is questionable in the judgment of the county social service board representative. If the required verification is refused, the application may be denied. In addition to the household income, eligibility and/or benefit determination factors include, but are not limited to identity, location and size of home, type of fuel, various dates, household composition, vulnerability, etc. If there is a court order or legal agreement form that indicates that both parents have 50% custody of their children, each parent can count the children in their household. CAUSE The DHS does not have proper procedures in place to detect and prevent duplicate or improper payments from being issued. Legacy and SPACES automatically calculate benefit payments. DHS is also able to make manual payments in addition to the calculated benefit payments. In addition, Case files lacked adequate documentation such as custody agreements and court orders at the time of eligibility determination for children in split custody arrangements. DHS does not have a policy to define 50% custody when a custody agreement or court order is not provided. EFFECT Overpayment of LIHEAP benefits. CONTEXT The LIHEAP program had approximately 189,548 benefit payments to individuals totaling $34 million for fiscal years 2021 and 2022. Out of those payments our office identified 12,689 potential duplicate payments totaling $1,437,329 and a separate 263 payments with duplicate SSNs indicating the same individual in multiple households/cases totaling $70,110. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure policies and procedures prevent duplicate payments from being applied to LIHEAP cases. We also recommend the Department of Human Services ensure required documentation is obtained for individuals appearing in multiple cases in accordance with state LIHEAP Policy. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We found that, of the 40 cases tested from the Department of Human Services' (DHS) Legacy system for proper eligibility, 17 cases were processed as eligible without a worker verifying eligibility information through the State NDVerify system. Under the LIHEAP FFY 2021 and FFY 2022 Detailed Model Plan (SF-424) of the State Plan, Monitoring section, NDVerify is identified as the monitoring schedule and protocol under section 10.6. This section in the State Plan is the response for covering 45 CFR ? 75.342, Monitoring and Reporting Program Performance. The Department implemented a new SPACES eligibility system for LIHEAP which was used for the 2022 heating season. NDVerify is integrated into the SPACES system and there were no errors in testing that NDVerify in SPACES was searched for the 2022 heating season eligibility. CRITERIA 45 CFR 75.342(a), Monitoring by the Non-Federal Entity, states the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. Within the Detailed Model Plan (SF-424), section 10.6 (Monitoring), of the FFY 2021 and FFY 2022 State Plans, DHS submitted monitoring schedule and protocol using NDVerify. "The North Dakota Department of Human Services has built a web-based verification system called NDVerify that streamlines the search of different interfaces/sources to obtain verification electronically. NDVerify allows eligibility workers to search multiple interfaces/sources for all household members included in a LIHEAP case at the same time. NDVerify also stores the search based on the date completed for historical purposes." 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE NDVerify was not integrated with the Legacy System. The DHS does not have a policy specifically requiring workers to perform NDVerify checks for all applications. While the Detailed Model Plan (SF-424) of the State Plan identifies several eligibility checks to integrated information through NDVerify, the DHS considers the use of NDVerify as optional and an available resource rather than a requirement. EFFECT Without verifying information with available state interfaces, there is no way to tell if the applicant is providing all the necessary information and this could impact eligibility determinations. The following sources/interfaces are included with NDVerify: Birth/Death Records (ND Vital Records) Health Insurance (DEERS) ND Child Support ND Department of Corrections ND Motor Vehicle/Watercraft (Motor Vehicle/Game & Fish) ND State Directory of New Hire ND State Hospital Admission/Discharge ND Unemployment Insurance Benefits (Job Service) ND Wages (Job Service) Other Benefit Information (SSA) SNAP Intentional Program Violations WSI Medical Claims Status Request UPA Request 40 Quarters Systematic Alien Verification for Entitlements (SAVE) CONTEXT The Department utilized the Legacy system for the 2021 heating season. Per the FFY 2021 Household report, there were 14,282 applications and $18,407,731.73 in payments for the LIHEAP Program. DHS implemented the SPACES system for the 2022 heating season. NDVerify is integrated with SPACES and there were no errors in testing that NDVerify was used within SPACES. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure eligibility is verified through the State NDVerify system prior to approval of all LIHEAP applications or revise the State Plan to identify the use of NDVerify as optional for approval by the Federal awarding agency. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department disagrees with this finding. See ?Management?s Response and Corrective Action? section of this report. AUDITOR?S CONCLUDING COMMENTS DHS informed the Federal agency of their procedures for Program Integrity in Section 17 of the state plan, ?All sources and types of income that exceed $500 per year must be verified.? DHS also, outlines under their monitoring procedures in the State plan that the eligibility workers have access to the NDVerify system to verify identification and income. NDVerify allows DHS to obtain identification and income records such as birth/death records, health insurance, child support, new hire information, unemployment insurance benefits, social security administration, supplemental nutrition assistance program benefits, etc. Relying solely on hard copies from the applicant to determine eligibility and not cross-checking the information for accuracy is not verifying all sources nor following procedures that were identified to the Federal agency in the state plan.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified an individual receiving LIHEAP benefits when they were living at one of their parents' houses rent-free. There was no rental contract on file or adequate documentation to allow this individual to receive LIHEAP benefits. We identified a known error of $749.37. When projected against the population, the remaining likely projected error is $302,293.17. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. DHS LIHEAP policy 415-20-10-35, "Households that receive rent-free housing including fuel as a required condition of part of an employment agreement, or as a gift, or through legal action (separation/divorce), are NOT vulnerable to the rising cost of heat and are therefore not eligible for heating assistance from LIHEAP." CAUSE County eligibility workers did not obtain enough documentation to confirm that the case was in compliance with DHS LIHEAP policy 415-20-10-35. EFFECT Improper overpayment of LIHEAP benefits. CONTEXT During state fiscal years, approximately 189,548 payments, totaling $34 million, were processed through the Department of Human Services' Legacy and SPACES eligibility systems. From the SPACES system there were 88,917 payments totaling $15.5 million and from the LEGACY system there were 100,631 payments totaling $18.4 million. The State Auditor's office performed a test of 80 payments, 40 from LEGACY and 40 from SPACES. The SPACES sample of payments was stratified with 66,548 payments under $200 (13 tested); 21,606 payments from $200-$999 (tested 24); and 763 payments with amount over $1,000 (tested 3). The error was identified in eligibility testing of payment records from the SPACES system which were approximately $15.5 million, and projected within stratified payments individually less than $200 ($5.28 million, 66,548 payments). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure adequate rental documentation is on file and proper eligibility determinations of the Low-Income Home Energy Assistance Program (LIHEAP) are made. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services (DHS) did not prevent duplicate LIHEAP benefit payments. Potential duplicate payments made during the audit period were identified by analyzing cases with combinations of the same case number (SPACES system) or Social Security Number (SSN) (Legacy system), Fuel Type, Benefit Month, Provider, and Amount. In addition, duplicate SSNs were analyzed to identify individuals in more than one case meaning that individuals would be counted in the number of persons in more than one household for calculating LIHEAP benefit payments. The duplicate payment test identified a known duplicate payments error of $1,415 and, projected to the population, a remaining likely questioned cost of $181,183. The duplicate SSN test identified a known overpayment of $528 and, projected to the population, a remaining likely questioned cost of $2,961. There was a 35% (7 of 20 tested) error rate in duplicate payments and a 90% (18 of 20 tested) error rate in duplicate SSNs. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. DHS policy 415-15-10-20 for verification of eligibility states verification of the applicant's statement of resources, or any other factor of eligibility and benefit determination, may be required whenever it is questionable in the judgment of the county social service board representative. If the required verification is refused, the application may be denied. In addition to the household income, eligibility and/or benefit determination factors include, but are not limited to identity, location and size of home, type of fuel, various dates, household composition, vulnerability, etc. If there is a court order or legal agreement form that indicates that both parents have 50% custody of their children, each parent can count the children in their household. CAUSE The DHS does not have proper procedures in place to detect and prevent duplicate or improper payments from being issued. Legacy and SPACES automatically calculate benefit payments. DHS is also able to make manual payments in addition to the calculated benefit payments. In addition, Case files lacked adequate documentation such as custody agreements and court orders at the time of eligibility determination for children in split custody arrangements. DHS does not have a policy to define 50% custody when a custody agreement or court order is not provided. EFFECT Overpayment of LIHEAP benefits. CONTEXT The LIHEAP program had approximately 189,548 benefit payments to individuals totaling $34 million for fiscal years 2021 and 2022. Out of those payments our office identified 12,689 potential duplicate payments totaling $1,437,329 and a separate 263 payments with duplicate SSNs indicating the same individual in multiple households/cases totaling $70,110. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure policies and procedures prevent duplicate payments from being applied to LIHEAP cases. We also recommend the Department of Human Services ensure required documentation is obtained for individuals appearing in multiple cases in accordance with state LIHEAP Policy. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We found that, of the 40 cases tested from the Department of Human Services' (DHS) Legacy system for proper eligibility, 17 cases were processed as eligible without a worker verifying eligibility information through the State NDVerify system. Under the LIHEAP FFY 2021 and FFY 2022 Detailed Model Plan (SF-424) of the State Plan, Monitoring section, NDVerify is identified as the monitoring schedule and protocol under section 10.6. This section in the State Plan is the response for covering 45 CFR ? 75.342, Monitoring and Reporting Program Performance. The Department implemented a new SPACES eligibility system for LIHEAP which was used for the 2022 heating season. NDVerify is integrated into the SPACES system and there were no errors in testing that NDVerify in SPACES was searched for the 2022 heating season eligibility. CRITERIA 45 CFR 75.342(a), Monitoring by the Non-Federal Entity, states the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. Within the Detailed Model Plan (SF-424), section 10.6 (Monitoring), of the FFY 2021 and FFY 2022 State Plans, DHS submitted monitoring schedule and protocol using NDVerify. "The North Dakota Department of Human Services has built a web-based verification system called NDVerify that streamlines the search of different interfaces/sources to obtain verification electronically. NDVerify allows eligibility workers to search multiple interfaces/sources for all household members included in a LIHEAP case at the same time. NDVerify also stores the search based on the date completed for historical purposes." 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE NDVerify was not integrated with the Legacy System. The DHS does not have a policy specifically requiring workers to perform NDVerify checks for all applications. While the Detailed Model Plan (SF-424) of the State Plan identifies several eligibility checks to integrated information through NDVerify, the DHS considers the use of NDVerify as optional and an available resource rather than a requirement. EFFECT Without verifying information with available state interfaces, there is no way to tell if the applicant is providing all the necessary information and this could impact eligibility determinations. The following sources/interfaces are included with NDVerify: Birth/Death Records (ND Vital Records) Health Insurance (DEERS) ND Child Support ND Department of Corrections ND Motor Vehicle/Watercraft (Motor Vehicle/Game & Fish) ND State Directory of New Hire ND State Hospital Admission/Discharge ND Unemployment Insurance Benefits (Job Service) ND Wages (Job Service) Other Benefit Information (SSA) SNAP Intentional Program Violations WSI Medical Claims Status Request UPA Request 40 Quarters Systematic Alien Verification for Entitlements (SAVE) CONTEXT The Department utilized the Legacy system for the 2021 heating season. Per the FFY 2021 Household report, there were 14,282 applications and $18,407,731.73 in payments for the LIHEAP Program. DHS implemented the SPACES system for the 2022 heating season. NDVerify is integrated with SPACES and there were no errors in testing that NDVerify was used within SPACES. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensure eligibility is verified through the State NDVerify system prior to approval of all LIHEAP applications or revise the State Plan to identify the use of NDVerify as optional for approval by the Federal awarding agency. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department disagrees with this finding. See ?Management?s Response and Corrective Action? section of this report. AUDITOR?S CONCLUDING COMMENTS DHS informed the Federal agency of their procedures for Program Integrity in Section 17 of the state plan, ?All sources and types of income that exceed $500 per year must be verified.? DHS also, outlines under their monitoring procedures in the State plan that the eligibility workers have access to the NDVerify system to verify identification and income. NDVerify allows DHS to obtain identification and income records such as birth/death records, health insurance, child support, new hire information, unemployment insurance benefits, social security administration, supplemental nutrition assistance program benefits, etc. Relying solely on hard copies from the applicant to determine eligibility and not cross-checking the information for accuracy is not verifying all sources nor following procedures that were identified to the Federal agency in the state plan.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not properly monitoring corrective orders issued to child care providers and performing re-inspections of identified deficiencies within specified time frames. 5 of 586 corrective orders issued during our audit period did not identify a date the orders were corrected. 187 of 586 (32%) corrective orders were not re-inspected within the 24-hour, 20-day, or 60-day time frame allowed for correction. 8 of 586 (1%) correction orders indicated correction before the violation date which potentially could mean inaccurate dates were being tracked. CRITERIA North Dakota Century Code (NDCC) section 50-11.1-07.2 requires that the Department or the Department's authorized agency issue a correction order whenever it is determined upon inspection that a program or premises is not in compliance with this chapter or rules adopted under this chapter. NDCC section 50-11.1-07.3 requires the Department or the Department's authorized agency shall re-inspect an early childhood program issued a correction order under NDCC section 50-11.1-07.2, at the end of the period allowed for correction. 45 CFR 98.41 requires that lead agencies must certify that procedures are in effect to ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for monitoring the resolution of corrective orders is ineffective. Due to employee turnover and the lack of guidance, corrective orders and dates are not consistently documented on the tracking sheet. EFFECT Child care providers are operating without proper follow-up of corrective orders potentially jeopardizing the health and safety of children. CONTEXT During fiscal years 2021 and 2022, there were 1,170 licensed providers in North Dakota receiving payments from the Child Care Assistance program. The following list is the number of corrective orders issued by calendar year: 2022 - 152 (through July) 2021 - 291 2020 - 143 (July through December) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-011 was reported in the immediate prior year. Findings 2018-013 and 2016-026 were made in previous years. RECOMMENDATION We recommend the Department of Human Service improve procedures to ensure child care correction orders are resolved before the end of each allowed correction period with accurate tracking of dates. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department of Health and Human Service agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not performing annual unannounced inspections of child care providers in operation. An annual unannounced inspection was not completed on 9 of 71 providers that were tested. CRITERIA 45 CFR 98.42(b)(2)(B) requires that not less than annually, an unannounced inspection for compliance with all child care licensing standards, which shall include an inspection for compliance with health and safety and fire standards, shall be completed. Department policy 620-01-116 states, the authorized agent is required to perform an unannounced review at least annually for each licensed or self-declared child care provider. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for ensuring unannounced visits are performed annually is ineffective. EFFECT Child care providers are operating child care facilities without proper monitoring of whether health and safety conditions have been met. CONTEXT During fiscal years 2021 and 2022 there were 1,871 providers from the Child Care Assistance program. The 12.7% error rate applied to the population would result in an estimated 237 providers not receiving unannounced visits. Errors were found within group, center, and self-declared providers. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-015 was reported in the immediate prior year. Findings 2018-017 and 2016-027 were made in previous years. RECOMMENDATION We recommend the Department of Human Services develop corrective action and perform annual unannounced inspections of child care providers in operation in accordance with 45 CFR 98.42(b)(2)(B) and Department policy. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not properly monitoring corrective orders issued to child care providers and performing re-inspections of identified deficiencies within specified time frames. 5 of 586 corrective orders issued during our audit period did not identify a date the orders were corrected. 187 of 586 (32%) corrective orders were not re-inspected within the 24-hour, 20-day, or 60-day time frame allowed for correction. 8 of 586 (1%) correction orders indicated correction before the violation date which potentially could mean inaccurate dates were being tracked. CRITERIA North Dakota Century Code (NDCC) section 50-11.1-07.2 requires that the Department or the Department's authorized agency issue a correction order whenever it is determined upon inspection that a program or premises is not in compliance with this chapter or rules adopted under this chapter. NDCC section 50-11.1-07.3 requires the Department or the Department's authorized agency shall re-inspect an early childhood program issued a correction order under NDCC section 50-11.1-07.2, at the end of the period allowed for correction. 45 CFR 98.41 requires that lead agencies must certify that procedures are in effect to ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for monitoring the resolution of corrective orders is ineffective. Due to employee turnover and the lack of guidance, corrective orders and dates are not consistently documented on the tracking sheet. EFFECT Child care providers are operating without proper follow-up of corrective orders potentially jeopardizing the health and safety of children. CONTEXT During fiscal years 2021 and 2022, there were 1,170 licensed providers in North Dakota receiving payments from the Child Care Assistance program. The following list is the number of corrective orders issued by calendar year: 2022 - 152 (through July) 2021 - 291 2020 - 143 (July through December) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-011 was reported in the immediate prior year. Findings 2018-013 and 2016-026 were made in previous years. RECOMMENDATION We recommend the Department of Human Service improve procedures to ensure child care correction orders are resolved before the end of each allowed correction period with accurate tracking of dates. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department of Health and Human Service agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not performing annual unannounced inspections of child care providers in operation. An annual unannounced inspection was not completed on 9 of 71 providers that were tested. CRITERIA 45 CFR 98.42(b)(2)(B) requires that not less than annually, an unannounced inspection for compliance with all child care licensing standards, which shall include an inspection for compliance with health and safety and fire standards, shall be completed. Department policy 620-01-116 states, the authorized agent is required to perform an unannounced review at least annually for each licensed or self-declared child care provider. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for ensuring unannounced visits are performed annually is ineffective. EFFECT Child care providers are operating child care facilities without proper monitoring of whether health and safety conditions have been met. CONTEXT During fiscal years 2021 and 2022 there were 1,871 providers from the Child Care Assistance program. The 12.7% error rate applied to the population would result in an estimated 237 providers not receiving unannounced visits. Errors were found within group, center, and self-declared providers. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-015 was reported in the immediate prior year. Findings 2018-017 and 2016-027 were made in previous years. RECOMMENDATION We recommend the Department of Human Services develop corrective action and perform annual unannounced inspections of child care providers in operation in accordance with 45 CFR 98.42(b)(2)(B) and Department policy. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not properly monitoring corrective orders issued to child care providers and performing re-inspections of identified deficiencies within specified time frames. 5 of 586 corrective orders issued during our audit period did not identify a date the orders were corrected. 187 of 586 (32%) corrective orders were not re-inspected within the 24-hour, 20-day, or 60-day time frame allowed for correction. 8 of 586 (1%) correction orders indicated correction before the violation date which potentially could mean inaccurate dates were being tracked. CRITERIA North Dakota Century Code (NDCC) section 50-11.1-07.2 requires that the Department or the Department's authorized agency issue a correction order whenever it is determined upon inspection that a program or premises is not in compliance with this chapter or rules adopted under this chapter. NDCC section 50-11.1-07.3 requires the Department or the Department's authorized agency shall re-inspect an early childhood program issued a correction order under NDCC section 50-11.1-07.2, at the end of the period allowed for correction. 45 CFR 98.41 requires that lead agencies must certify that procedures are in effect to ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for monitoring the resolution of corrective orders is ineffective. Due to employee turnover and the lack of guidance, corrective orders and dates are not consistently documented on the tracking sheet. EFFECT Child care providers are operating without proper follow-up of corrective orders potentially jeopardizing the health and safety of children. CONTEXT During fiscal years 2021 and 2022, there were 1,170 licensed providers in North Dakota receiving payments from the Child Care Assistance program. The following list is the number of corrective orders issued by calendar year: 2022 - 152 (through July) 2021 - 291 2020 - 143 (July through December) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-011 was reported in the immediate prior year. Findings 2018-013 and 2016-026 were made in previous years. RECOMMENDATION We recommend the Department of Human Service improve procedures to ensure child care correction orders are resolved before the end of each allowed correction period with accurate tracking of dates. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department of Health and Human Service agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services is not performing annual unannounced inspections of child care providers in operation. An annual unannounced inspection was not completed on 9 of 71 providers that were tested. CRITERIA 45 CFR 98.42(b)(2)(B) requires that not less than annually, an unannounced inspection for compliance with all child care licensing standards, which shall include an inspection for compliance with health and safety and fire standards, shall be completed. Department policy 620-01-116 states, the authorized agent is required to perform an unannounced review at least annually for each licensed or self-declared child care provider. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department's procedures for ensuring unannounced visits are performed annually is ineffective. EFFECT Child care providers are operating child care facilities without proper monitoring of whether health and safety conditions have been met. CONTEXT During fiscal years 2021 and 2022 there were 1,871 providers from the Child Care Assistance program. The 12.7% error rate applied to the population would result in an estimated 237 providers not receiving unannounced visits. Errors were found within group, center, and self-declared providers. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-015 was reported in the immediate prior year. Findings 2018-017 and 2016-027 were made in previous years. RECOMMENDATION We recommend the Department of Human Services develop corrective action and perform annual unannounced inspections of child care providers in operation in accordance with 45 CFR 98.42(b)(2)(B) and Department policy. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION During our testing of eligibility, we noted that eligibility was not properly determined by the Department of Human Services (DHS) for 1 of 60 CHIP cases that were tested. For this case, the income exceeded the Federal Poverty Line (FPL) threshold for CHIP. This resulted in a known Federal error for this case of $498 with a likely additional federal questioned cost of $52,643. CRITERIA 42 CFR 457.965 states the State must include in each applicant's record facts to support the State's determination of the applicant's eligibility for Children's Health Insurance Program (CHIP). 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 42 CFR 431.804 ?Eligibility error? is an error resulting from the States' improper application of Federal rules and the State's documented policies and procedures that causes a beneficiary to be determined eligible when he or she is ineligible for Medicaid or CHIP, causes a beneficiary to be determined eligible for the incorrect type of assistance, causes applications for Medicaid or CHIP to be improperly denied by the State, or causes existing cases to be improperly terminated from Medicaid or CHIP by the State. An eligibility error may also be caused when a redetermination did not occur timely or a required element of the eligibility determination process (for example income) cannot be verified as being performed/completed by the state. 42 CFR 431.960(b)(1) A data processing error is an error resulting in an overpayment or underpayment that is determined from a review of the claim and other information available in the State's Medicaid Management Information System, related systems, or outside sources of provider verification resulting in Federal and/or State improper payments.) CAUSE Since the income was over the FPL for CHIP, the Department stated that state's system, SPACES, should have sustained benefits under the existing coverage which, in this one case was Medicaid (Affordable Care Act Child). The Department stated the SPACES system failed to sustain the benefits under Medicaid. Both Medicaid and CHIP are fee-for-service programs and the total payment amount was not impacted.) EFFECT The Department incorrectly claimed the FMAP rate for CHIP rather than Medicaid based on the child's category of eligibility. CONTEXT There were 18,177 payments totaling $26.2 million made during the audit period from CHIP. The individual case was from a stratified population of $17,965,913 for individual payment amounts between $1,000 to $49,999. The payment of $4,134 was projected to this stratified population of CHIP payments. The FMAP rates were then applied to the payment and the projection amount to determine the Federal amount in error which were calculated as the difference between the CHIP FMAP rate (71.85%) and Medicaid FMAP rate (59.79%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-002 was reported in the immediate prior year. Findings 2018-002 and 2016-004 were reported in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding for CHIP. RECOMMENDATION We recommend the Department of Human Services review the SPACES system edit checks and ensure eligibility determinations made for the CHIP programs are proper. We also recommend corrections to payments and Federal reimbursement of CHIP. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with this recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION Medicaid providers did not submit proper documentation to support the services billed in 12 of 456 claims tested by the auditors. This resulted in improper payments of $6,622. When projected against the entire population, the additional likely Federal questioned costs total $17,735,959. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 42 CFR 431.960 (c) (1) states a medical review error is an error resulting in an overpayment or underpayment that is determined from a review of the provider's medical record or other documentation supporting the service(s) claimed, Code of Federal Regulations that are applicable to conditions of payment, the State's written policies, and a comparison between the documentation and written policies and the information presented on the claim resulting in Federal and/or State improper payments. 42 CFR 431.960 (c) (3) states medical review errors include, but are not limited to, the following: (i) Lack of documentation, (ii) Insufficient documentation, and (iii) procedure coding errors. CAUSE Medicaid providers did not submit proper documentation to support Medicaid claims. EFFECT Unallowable or inaccurate payments were made to providers who later did not submit proper documentation when selected for audit. CONTEXT There were 10,698,524 Medicaid claims that occurred during our audit period of July 1, 2020, through June 30, 2022. The Federal Medical Assistance Percentages were used to calculate the Federal portion of the projected likely questioned costs. Where sampling was performed, the audit used a non-statistical sampling method. The Department provided the Centers for Medicare and Medicaid Services Notification of Improper Payment Rates for North Dakota dated 11/15/22. The target rate for fee-for-service payment errors was 14.88% with an estimated rate of 3.04% based on 387 sampled claims identified through the Payment Error Rate Measurement Program (PERM). The error rate of the claims audited by the ND State Auditor?s Office is 2.63% which is below this threshold. IDENTIFICATION AS A REPEAT FINDING Finding 2020-005 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Human Services develop a corrective action plan to address the errors identified in the audit and recover payments made on unsupported claims. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees to recover payments made on unsupported claims. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services has not completed a risk analysis and security review of the Medicaid Management Information System (MMIS) since 2019. CRITERIA 45 CFR 95.621(f)(3) states that state agencies shall review the Automatic Data Processing (ADP) system security of installations involved in the administration of Health and Human Services (HHS) programs on a biennial basis. 45 CFR 95.621(f)(6) states that the state agency shall maintain reports of their biennial ADP system security reviews, together with pertinent supporting documentation, for HHS on-site review. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE A risk analysis and security review was not completed in 2020 and 2021 due to resources being dedicated to the developing of new software. This new software will automate many of the processes surrounding the risk analysis and security review as well as user access reviews and will save personnel time. EFFECT The risk analysis has not been completed regularly and there is the possibility the security over different areas of the system can become compromised bringing into question the validity of the data contained within the system. CONTEXT There were $2,496,097,225 of Medicaid payments that were processed in the MMIS and eligibility systems during our audit period of July 1, 2020, through June 30, 2022. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services complete a risk analysis and security review of MMIS biennially. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The medical loss ratio report for reporting calendar year 2020 did not contain the minimum Federal regulation required elements. DHS did not maintain the required attestation statement to address accuracy for reporting year 2020. As of March 2, 2023, the medical loss ratio report for reporting year 2021, which was due in November 2022, has not been finalized as outlined in the Sanford Health Plan contract. The contract required completion prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date. CRITERIA Effective January 1, 2020, Sanford Health Plan Contract states, prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date, STATE shall finalize the MLR (Medical Loss Ratio) reporting year with any balance due to STATE as required in paragraph (G) of this section within 60 days. 42 CFR 438.8 (n) MCOs, PIHPs, and PAHPs must attest to the accuracy of the calculation of the MLR in accordance with requirements of this section when submitting the report required under paragraph (k) of this section. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The attestation statement to address accuracy was not provided to the auditor. The Department indicated the statement was obtained by an employee no longer with the Department and it was not shared with other team members. The Medical Loss Ratio report for reporting year 2021 was not finalized as outlined in the Sanford Health Plan Contract, "Prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date, STATE shall finalize the MLR reporting year with any balance due to STATE as required in paragraph (G) of this section within 60 days". This was due to a large reconciliation taking longer than normal to complete. A mutually agreed upon alternative date was not determined due to research needing to be done on both sides, sometimes not knowing how long it would take. EFFECT Absent the inclusion of all required medical loss ratio information, the Department cannot demonstrate compliance with Federal regulations. CONTEXT During our audit period of July 1, 2020, through June 30, 2022, the Department of Human Services contracted with one MCO health plan that was subject to MLR Federal reporting requirements. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensures the medical loss ratio report is finalized as outlined in the contract and all required documentation is properly maintained. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services did not complete an access review of the Medicaid Management Information System (MMIS) fee schedule for 2020 or 2021. The Department also did not complete a security review of all major Medicaid information systems for 2021 or 2022. CRITERIA Standards for Internal Control in the Federal Government requires management designs other control activities to promptly update access rights when employees change job functions or leave the entity. Management also designs control activities for access rights when different information technology elements are connected to each other. (GAO-14-704G para 11.14). 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The MMIS fee schedule access review was not completed in 2020 and 2021 and review of access rights for the major Medicaid information systems was not completed in 2021 and 2022 due to resources being dedicated to the developing of new software. The new software being developed may automate many of the processes surrounding the risk analysis and security review as well as user access reviews. EFFECT There is a risk that employees whose job duties have changed still have access to confidential information. CONTEXT There were $2,496,097,225 of Medicaid payments that were processed in the MMIS and eligibility systems during our audit period of July 1, 2020, through June 30, 2022. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services review access rights to the Medicaid Management Information System (MMIS) fee schedule and all major Medicaid information systems on a regular basis. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendations. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION Medicaid providers did not submit proper documentation to support the services billed in 12 of 456 claims tested by the auditors. This resulted in improper payments of $6,622. When projected against the entire population, the additional likely Federal questioned costs total $17,735,959. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 42 CFR 431.960 (c) (1) states a medical review error is an error resulting in an overpayment or underpayment that is determined from a review of the provider's medical record or other documentation supporting the service(s) claimed, Code of Federal Regulations that are applicable to conditions of payment, the State's written policies, and a comparison between the documentation and written policies and the information presented on the claim resulting in Federal and/or State improper payments. 42 CFR 431.960 (c) (3) states medical review errors include, but are not limited to, the following: (i) Lack of documentation, (ii) Insufficient documentation, and (iii) procedure coding errors. CAUSE Medicaid providers did not submit proper documentation to support Medicaid claims. EFFECT Unallowable or inaccurate payments were made to providers who later did not submit proper documentation when selected for audit. CONTEXT There were 10,698,524 Medicaid claims that occurred during our audit period of July 1, 2020, through June 30, 2022. The Federal Medical Assistance Percentages were used to calculate the Federal portion of the projected likely questioned costs. Where sampling was performed, the audit used a non-statistical sampling method. The Department provided the Centers for Medicare and Medicaid Services Notification of Improper Payment Rates for North Dakota dated 11/15/22. The target rate for fee-for-service payment errors was 14.88% with an estimated rate of 3.04% based on 387 sampled claims identified through the Payment Error Rate Measurement Program (PERM). The error rate of the claims audited by the ND State Auditor?s Office is 2.63% which is below this threshold. IDENTIFICATION AS A REPEAT FINDING Finding 2020-005 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Human Services develop a corrective action plan to address the errors identified in the audit and recover payments made on unsupported claims. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees to recover payments made on unsupported claims. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services has not completed a risk analysis and security review of the Medicaid Management Information System (MMIS) since 2019. CRITERIA 45 CFR 95.621(f)(3) states that state agencies shall review the Automatic Data Processing (ADP) system security of installations involved in the administration of Health and Human Services (HHS) programs on a biennial basis. 45 CFR 95.621(f)(6) states that the state agency shall maintain reports of their biennial ADP system security reviews, together with pertinent supporting documentation, for HHS on-site review. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE A risk analysis and security review was not completed in 2020 and 2021 due to resources being dedicated to the developing of new software. This new software will automate many of the processes surrounding the risk analysis and security review as well as user access reviews and will save personnel time. EFFECT The risk analysis has not been completed regularly and there is the possibility the security over different areas of the system can become compromised bringing into question the validity of the data contained within the system. CONTEXT There were $2,496,097,225 of Medicaid payments that were processed in the MMIS and eligibility systems during our audit period of July 1, 2020, through June 30, 2022. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services complete a risk analysis and security review of MMIS biennially. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The medical loss ratio report for reporting calendar year 2020 did not contain the minimum Federal regulation required elements. DHS did not maintain the required attestation statement to address accuracy for reporting year 2020. As of March 2, 2023, the medical loss ratio report for reporting year 2021, which was due in November 2022, has not been finalized as outlined in the Sanford Health Plan contract. The contract required completion prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date. CRITERIA Effective January 1, 2020, Sanford Health Plan Contract states, prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date, STATE shall finalize the MLR (Medical Loss Ratio) reporting year with any balance due to STATE as required in paragraph (G) of this section within 60 days. 42 CFR 438.8 (n) MCOs, PIHPs, and PAHPs must attest to the accuracy of the calculation of the MLR in accordance with requirements of this section when submitting the report required under paragraph (k) of this section. 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The attestation statement to address accuracy was not provided to the auditor. The Department indicated the statement was obtained by an employee no longer with the Department and it was not shared with other team members. The Medical Loss Ratio report for reporting year 2021 was not finalized as outlined in the Sanford Health Plan Contract, "Prior to 11 months following the applicable MLR reporting year or a mutually agreed upon alternative date, STATE shall finalize the MLR reporting year with any balance due to STATE as required in paragraph (G) of this section within 60 days". This was due to a large reconciliation taking longer than normal to complete. A mutually agreed upon alternative date was not determined due to research needing to be done on both sides, sometimes not knowing how long it would take. EFFECT Absent the inclusion of all required medical loss ratio information, the Department cannot demonstrate compliance with Federal regulations. CONTEXT During our audit period of July 1, 2020, through June 30, 2022, the Department of Human Services contracted with one MCO health plan that was subject to MLR Federal reporting requirements. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services ensures the medical loss ratio report is finalized as outlined in the contract and all required documentation is properly maintained. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services did not complete an access review of the Medicaid Management Information System (MMIS) fee schedule for 2020 or 2021. The Department also did not complete a security review of all major Medicaid information systems for 2021 or 2022. CRITERIA Standards for Internal Control in the Federal Government requires management designs other control activities to promptly update access rights when employees change job functions or leave the entity. Management also designs control activities for access rights when different information technology elements are connected to each other. (GAO-14-704G para 11.14). 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The MMIS fee schedule access review was not completed in 2020 and 2021 and review of access rights for the major Medicaid information systems was not completed in 2021 and 2022 due to resources being dedicated to the developing of new software. The new software being developed may automate many of the processes surrounding the risk analysis and security review as well as user access reviews. EFFECT There is a risk that employees whose job duties have changed still have access to confidential information. CONTEXT There were $2,496,097,225 of Medicaid payments that were processed in the MMIS and eligibility systems during our audit period of July 1, 2020, through June 30, 2022. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services review access rights to the Medicaid Management Information System (MMIS) fee schedule and all major Medicaid information systems on a regular basis. DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendations. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services did not meet the level of effort requirement for pregnant women and women with dependent children as they were unable to provide tracking information on the expenditures for the related services provided during the audit for the 2019 and 2020 grant awards. At a minimum, the Department was required to maintain a level of effort of the 1994 base amount which was $254,665. Since the Department was unable to identify expenditures for the 2019 and 2020 grant awards, the known error is $509,330. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 45 CFR 96.124(c): (1) The State for fiscal year 1993 shall expend not less than five percent of the grant to increase (relative to fiscal year 1992) the availability of treatment services designed for pregnant women and women with dependent children (either by establishing new programs or expanding the capacity of existing programs). The base for fiscal year 1993 shall be an amount equal to the fiscal year 1992 alcohol and drug services Block Grant expenditures and State expenditures for pregnant women and women with dependent children as described in paragraph (e) of this section, and to this base shall be added at least 5 percent of the 1993 Block Grant allotment. The base shall be calculated using Generally Accepted Accounting Principles and the composition of the base shall be applied consistently from year to year. States shall report the methods used to calculate their base for fiscal year 1992 expenditures on treatment for pregnant women and women with dependent children. (2) For fiscal year 1994, the State shall, consistent with paragraph (c)(1) of this section, expend not less than five percent of the grant to increase (relative to fiscal year 1993) the availability of such services to pregnant women and women with dependent children. (3) For grants beyond fiscal year 1994, the States shall expend no less than an amount equal to the amount expended by the State for fiscal year 1994. CAUSE The Department indicated there are no providers offering these specialized treatment services for pregnant women and women with dependent children. EFFECT Noncompliance with 45 CFR 96.124(c) to provide treatment services designed for pregnant women and women with dependent children at no less than an amount equal to the amount expended by the State for fiscal year 1994. Pregnant women addicted to drugs or alcohol face significant risks. The drug rehab programs for pregnant women and women with children provide specific services and support. CONTEXT The 2019 and 2020 grant years were the only grants to close during the audit period. The 1994 base amount is $254,655 per grant year. The substance abuse program expenditures for SFY 2021 were $10,447,419 and SFY 2022 were $6,310,633 as reported on the SFY 2021, 2022 Schedule of Expenditures of Federal Awards for CFDA 93.959. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services develop corrective action and expend, at a minimum, the amount expended by the State for fiscal year 1994, for the availability of treatment services designed for pregnant women and women with dependent children either by establishing new programs or expanding the capacity of existing programs DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Human Services did not meet the level of effort requirement for pregnant women and women with dependent children as they were unable to provide tracking information on the expenditures for the related services provided during the audit for the 2019 and 2020 grant awards. At a minimum, the Department was required to maintain a level of effort of the 1994 base amount which was $254,665. Since the Department was unable to identify expenditures for the 2019 and 2020 grant awards, the known error is $509,330. CRITERIA 45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 45 CFR 96.124(c): (1) The State for fiscal year 1993 shall expend not less than five percent of the grant to increase (relative to fiscal year 1992) the availability of treatment services designed for pregnant women and women with dependent children (either by establishing new programs or expanding the capacity of existing programs). The base for fiscal year 1993 shall be an amount equal to the fiscal year 1992 alcohol and drug services Block Grant expenditures and State expenditures for pregnant women and women with dependent children as described in paragraph (e) of this section, and to this base shall be added at least 5 percent of the 1993 Block Grant allotment. The base shall be calculated using Generally Accepted Accounting Principles and the composition of the base shall be applied consistently from year to year. States shall report the methods used to calculate their base for fiscal year 1992 expenditures on treatment for pregnant women and women with dependent children. (2) For fiscal year 1994, the State shall, consistent with paragraph (c)(1) of this section, expend not less than five percent of the grant to increase (relative to fiscal year 1993) the availability of such services to pregnant women and women with dependent children. (3) For grants beyond fiscal year 1994, the States shall expend no less than an amount equal to the amount expended by the State for fiscal year 1994. CAUSE The Department indicated there are no providers offering these specialized treatment services for pregnant women and women with dependent children. EFFECT Noncompliance with 45 CFR 96.124(c) to provide treatment services designed for pregnant women and women with dependent children at no less than an amount equal to the amount expended by the State for fiscal year 1994. Pregnant women addicted to drugs or alcohol face significant risks. The drug rehab programs for pregnant women and women with children provide specific services and support. CONTEXT The 2019 and 2020 grant years were the only grants to close during the audit period. The 1994 base amount is $254,655 per grant year. The substance abuse program expenditures for SFY 2021 were $10,447,419 and SFY 2022 were $6,310,633 as reported on the SFY 2021, 2022 Schedule of Expenditures of Federal Awards for CFDA 93.959. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Human Services develop corrective action and expend, at a minimum, the amount expended by the State for fiscal year 1994, for the availability of treatment services designed for pregnant women and women with dependent children either by establishing new programs or expanding the capacity of existing programs DEPARTMENT OF HUMAN SERVICES RESPONSE The Department agrees with the recommendation. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Commerce issued eight duplicate grant payments totaling $174,422.48. Since we reviewed the entire population for potential duplicate payments, this amount is considered the total known questioned costs. However, two of the payments, totaling, $64,164.66 are still outstanding and Department is working with other state agencies to stop the payments from clearing. CRITERIA Per the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Title VI, Sec. 601 (d), payments from the Fund may only be used to cover costs that: 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID?19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021. Duplicate payments are neither necessary nor reasonable. Federal regulation, 2 CFR 200.303, requires non-Federal entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Internal controls did not prevent these payments from being issued. EFFECT The Department of Commerce is not in compliance with Federal regulations as the duplicate payments were not an allowable use of Federal funds. CONTEXT The Department of Commerce utilized Coronavirus Relief Funds to provide approximately $81.7 million of net grants beginning July 1, 2020, and ending December 31, 2021. We identified eight duplicate grant payments totaling $174,422.48 out of $82,387,566 (6,139 payments) processed as one-time payments in the state's Peoplesoft system general ledger. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Commerce enhance internal controls to ensure duplicate payments are not made to recipients of Federal funds. DEPARTMENT OF COMMERCE RESPONSE The Department of Commerce agrees with this finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The 67th Legislative Assembly in 2021 Session Law, Senate Bill 2018, Section 8, appropriated $434,568 from the Coronavirus Relief Fund to the Department of Commerce for the tourism transportation improvement grant program for a grant to be provided to an organization dedicated to preserving and promoting a historic, tourism destination North Dakota city. We reviewed supporting documentation that showed the organization used the grant to defray the costs of adding a high-capacity elevator at an amphitheater. Such a capital improvement project is not considered a necessary expenditure incurred due to the COVID-19 public health emergency. In addition, the Department was unable to provide documentation the organization was impacted by the public health emergency and eligible for the CRF funds. This $434,568 grant is considered the total known questioned costs. This error was considered an isolated instance and was not projected to the sampled population. CRITERIA Per the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Title VI, Sec. 601 (d), payments from the Fund may only be used to cover costs that: 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID?19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021. The Federal Register dated January 15, 2021 (Vol. 86, No.10), states that if capital improvement projects are not necessary expenditures incurred due to the COVID-19 public health emergency, then Fund payments may not be used for such projects. However, payment for expenses associated with the provision of economic support in connection with the COVID-19 public health emergency, such as expenditures related to the provision of grants to small businesses to reimburse the costs of business interruption caused by required closures, would be allowable. There was no documentation supporting any costs of business interruption. In addition, the Federal Register states the prime recipient is responsible for determining the level and detail of documentation needed from the subrecipient of small business assistance to satisfy the requirements of section 601 (d) of the Social Security Act, however, there would need to be some proof that the small business was impacted by the public health emergency and was thus eligible for the CRF funds. Federal regulation, 2 CFR 200.303, requires non-Federal entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The "Standards for Internal Control in the Federal Government" published by the United States Government Accountability Office states that management obtains relevant data from reliable internal and external sources in a timely manner based on the identified information requirements. (GAO-14-704G para.13.04). CAUSE While the Department of Commerce complied with legislative intent by providing a grant to an organization dedicated to preserving and promoting a historic, tourism destination North Dakota city, the Department did not review available guidelines published by the U.S. Treasury Department for allowable costs under the Coronavirus Relief Fund. EFFECT The Department of Commerce is not in compliance with Federal regulations. The funded capital improvement project was not a necessary expenditure incurred due to the COVID-19 public health emergency. CONTEXT The Department of Commerce utilized Coronavirus Relief Funds to provide approximately $81.7 million in grants beginning July 1, 2020, and ending December 31, 2021. This $434,568 grant was the only grant identified at this location earmarked to a specific organization by the ND Legislative Assembly. The Department of Commerce processed payments through the state's accounting system (Peoplesoft) accounts payable and general ledger payment methods. The error was identified within the accounts payable payment population of $9,274,447 (77 payments) where individually significant payments totaled $4,295,314 (2 payments) and sampled payments totaled $4,973,554 (57 payments). The error was not projected within the sampled payments. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Commerce: A) Review available guidelines published by the U.S. Treasury Department for allowable costs under the Coronavirus Relief Fund, B) Obtain some proof that the organization was impacted by the public health emergency, and C) Request support from the organization for allowable expenditures incurred during the period beginning March 1, 2020, and ending on December 31, 2021, to offset the questioned costs; OR D) Recoup the money from the organization and refund the Department of the Treasury. DEPARTMENT OF COMMERCE RESPONSE The Department of Commerce utilized the funds made available to it by the 67th Legislative Assembly to accomplish the intent of said legislative body. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Commerce awarded a $4,879.94 grant to an applicant based on the estimated costs listed in the grant application. The Department subsequently requested proof of payment from the applicant and the applicant did not respond. As a result, the Department has requested a full refund and turned the matter over to the ND Attorney General's Office for collection. The amount of the grant award is considered the total known questioned costs. This error, projected to the entire population, results in an additional possible error of $690,025.74. CRITERIA Per the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Title VI, Sec. 601 (d), payments from the Fund may only be used to cover costs that: 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID?19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021. In addition, the Federal Register dated January 15, 2021, indicates the direct recipient of payments from the Fund is ultimately responsible for subrecipient compliance on the use of payments from the Fund. CAUSE The Department of Commerce did perform application reviews before awarding funding and performed audits of randomly selected businesses during the program period. However, the beneficiary has not cooperated with the Department's requests. EFFECT The Department of Commerce is not in compliance with Federal regulations. Without proper support, there is no way to determine if the beneficiary used the payment from the Fund on necessary expenditures incurred due to the public health emergency with respect to COVID-19. CONTEXT The Department of Commerce utilized Coronavirus Relief Funds to provide approximately $81.7 million in grants beginning July 1, 2020, and ending December 31, 2021. Where sampling was performed, the audit used a non-statistical sampling method. In a non-statistical sample of 40 of the 6,139 grant payments processed as one-time payments in the state's Peoplesoft general ledger, we identified one business that was not cooperative with the Department's requests for additional support and/or refund. Eight other beneficiaries selected for testing refunded the Department upon request. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Commerce continue its efforts to: A) Obtain support from the beneficiary for allowable expenditures under the Fund; or B) Recoup the grant award from the beneficiary and refund the U.S. Department of the Treasury. DEPARTMENT OF COMMERCE RESPONSE The Department of Commerce agrees with this finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Office of Management and Budget underreported both current period and cumulative expenditures by at least $117,366,999 on the project and expenditure report to the Department of Treasury covering the period of January 2022-March 2022. These expenditures were subsequently reported in the period of April 2022-June 2022. CRITERIA The interim final rule, issued May 17, 2021, states "The quarterly Project and Expenditure reports will include financial data, information on contracts and subawards over $50,000, types of projects funded, and other information regarding a recipient?s utilization of the award funds..... Treasury will provide additional guidance and instructions on the reporting requirements outlined above for the Fiscal Recovery Funds at a later date." (Federal Register Vol. 96, No.93 pgs. 26814-26815). The final rule published January 27, 2022 which amended the interim rule also stated "Recipients are advised to also consult Treasury?s Reporting and Compliance Guidance for additional information on program administration processes and requirements, including applicability of the Uniform Guidance". Federal Register Vol. 87, No.18 pg. 4340). Per this guidance which was first published June 17, 2021, recipients were required to submit Project and Expenditure reports that included current period expenditures and cumulative expenditures for reporting periods covering March 2021-December 2021 and January 2022-March 2022. (Compliance and Reporting Guidance - State and Local Fiscal Recovery Funds, V5.0 pg.17-19). The FY 2022 compliance supplement also states that the SEFA should report all aggregate expenditures for all four eligible use categories, not just the results of the revenue loss calculation or standard allowance. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Individual agencies paid SLFRF expenditures through the state's accounting system. OMB transferred reimbursement of expenditures to the individual agencies upon request. OMB reported information on the Federal project and expenditure reports based on OMB's transfers out to agencies. OMB tracked these transfers and reported the amount tracked as current period and cumulative period expenditures for their Project and Expenditure report. Expenditures may be reported on a cash or accrual basis. Some agencies did not request a transfer for paid expenditures or provide information relating to incurred expenditures to OMB prior to the reporting period end. The State Treasurer paid approximately $92 million and the Department of Human Services paid approximately $25 million during the period that was not transferred to these agencies until after the reporting period and not reported in the period January 2022-March 2022. EFFECT The timing of expenditures made using State and Local Fiscal Recovery Funds (SLFRF) was reported inaccurately to the Department of Treasury. CONTEXT In March 2021, the Federal Department of Treasury obligated funds to all 50 states under the State Local and Fiscal Recovery Fund to help states mitigate negative economic impacts caused by the COVID-19 pandemic. In November 2021, the special session of the 67th legislature obligated use of these funds to various agencies across the state. As the state was able to show that the revenue lost in years 2020 and 2021 exceeded the amount of the obligation from the Department of Treasury, the state was able to claim use of these funds under revenue replacement which allowed the state to utilize them for 'government operations' in addition to other specific uses and also allowing the state to report use of these funds under a single 'revenue replacement' project. The agencies began using the funds for purposes after they were obligated by the state legislature and began recording expenditures against the grant throughout our audit period. When these funds were initially disbursed to the state in March 2021, the funds were received by OMB and OMB then transferred reimbursement to agencies on request. North Dakota's project description on the reports was consistent and based on legislative appropriation. As reported, "Due to its extraordinary revenue loss during the pandemic, North Dakota?s entire SFRF allocation is dedicated to project expenditure category group 6 ? Revenue Replacement. Consequently, all expenditures will fall under project expenditure category 6.1 ? Provision of Government Services. Government services, as defined by the North Dakota legislature, includes economic development and workforce development initiatives, infrastructure and deferred maintenance initiatives, state service delivery and information technology improvements, and healthcare and emergency response initiatives." Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget develop corrective action and properly report the state's SLFRF current period expenditures and cumulative expenditures to the Department of Treasury as accumulated from each agency's records within the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding. The expenditures referenced in this audit finding were incurred by agencies prior to the period in which the Federal funds were included in the quarterly expenditure reports for the State and Local Fiscal Recovery Fund. Because OMB is responsible for the state reporting under this program, it is necessary to maintain some level of control over these funds. Consequently, OMB manages the funds centrally and developed a process to reimburse agencies for their eligible expenditures once expenditures were incurred and agencies requested reimbursement. As a result, reimbursement from the state?s allocation of SLFRF moneys always occurs after the agency expenditure. Funds are included in the Federal report for the period in which reimbursement from the SLFRF occurs. In some cases, this results in the agency expenditure occurring in a period prior to the period covered under the quarterly SLFRF report in which the reimbursement is reported. However, until reimbursement occurs, the expenditure is charged to a funding source other than SLFRF. All expenditures reimbursed through SLFRF are included in Federal reports for the period in which the reimbursement occurred. See ?Management?s Response and Corrective Action? section of this report. AUDITOR?S CONCLUDING COMMENTS While the Office of Management and Budget agrees with the finding, continuing Federal reporting based on the timing of reimbursed expenditures will likely cause further inaccurate SLFRF reporting. In addition, amounts transferred to agencies are not confirmed to not exceed incurred expenditures to ensure a reimbursement process is in place.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION We identified Coronavirus Relief Fund (CRF) quarterly financial progress reports were incomplete, inaccurate and did not reconcile to the state's accounting system. CRITERIA Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Office of Management and Budget, 2 CFR Part 200, Appendix XI, 2021 and 2022 Compliance Supplements, for Assistance Listing 21.019 Coronavirus Relief Fund, states in part: Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the Grant Solutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Key Line Items ? The following line items from the reporting contain critical information: (1) The total amount of payments from the Fund received from Treasury. (2) The amount of funds received that were expended or obligated for each project or activity. (3) A detailed list of all projects or activities for which funds were expended or obligated, including: a. The name of the project or activity b. A description of the project or activity (4) Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the prime recipient that are greater than $50,000. For amounts less than $50,000, the prime recipient must report in the aggregate for these expenditure categories. For direct payments to individuals, aggregate reporting is required to be reported regardless of amount. Beginning September 21, 2020, prime recipients were required to submit via the Grant Solutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using Grant Solutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a Federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Department of the Treasury Office of Inspector General Coronavirus Relief Frequently Asked Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R), if an error is identified or a modification needs to be made after a report is already approved by the Treasury OIG, the prime recipient will need to make the modification or correction in the next quarterly reporting cycle. CAUSE There was a lack of understanding across state agencies of the detailed requirements of Coronavirus Relief Fund reporting. The North Dakota Office of Management and Budget (OMB) provided the CRF Report Template, Data Upload Service Data Dictionary, Coronavirus Relief Fund Frequently Asked Questions, and instructions to all state agencies. However, OMB?s procedures to review the information submitted by state agencies did not detect all material errors and omissions within the reporting cycle. In addition, the short turnaround time for reporting deadlines contributed to reporting errors and omissions. EFFECT Inaccurate Federal reporting reduces transparency and may impair the Federal oversight agency's ability to properly oversee the program. CONTEXT State agencies prepared and submitted CRF report templates to the ND Office of Management and Budget (OMB). OMB compiled the information into a master CRF report template for submission. We randomly selected the quarters ending December 30, 2020, and December 31, 2021, to test across 11 state agencies. One agency did not have expenditures in the quarter ending December 31, 2021; therefore, we judgmentally selected the quarter ending March 31, 2021, to test. Another agency did not have expenditures in either of the quarters randomly selected; therefore, we judgmentally selected the quarters ending September 30, 2021, and March 31, 2022, to test. In total, we attempted to reconcile the 22 agency prepared CRF report templates to data in the state?s accounting system. We also attempted to reconcile the agency prepared CRF report template information to OMB?s master CRF report template and/or final submission. Lastly, we randomly sampled CRF expenditures from the agency prepared CRF report templates to test the categorical breakdown. Based on our testing, we identified: ? Approximately $61.1 million of CRF expenditures were not reported by various agencies to OMB in the proper quarter. Because material errors and omissions impacted total expenditures reported, the amounts reported by category will also be misstated. Lastly, if an error was identified or a modification needed to be made after a report was already approved by the Treasury OIG, the prime recipient was allowed to make the modification or correction in the next quarterly reporting cycle. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget strengthen procedures to ensure Federal reports are complete, accurate and reconcile to the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding and the auditor?s recommendation. We agree with the auditor?s finding that certain agency expenditures were not reported in the proper quarter and that quarterly reports did not reconcile to the state accounting system. However, the Federal report was required to be submitted ten days after the close of the period. The state accounting system was not closed by the time the Federal reports were required to be submitted. The U.S. Department of Treasury recognized this and directed reporting agencies to correct and revise prior submissions when each subsequent report was submitted. OMB made these revisions as required and all expenditures were reported appropriately as the final Coronavirus Relief Funds reports were submitted. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The State Treasurer's Office did not ensure all required information was provided to subrecipients of Coronavirus Relief Funds (CRF). In addition, the Office's internal controls were insufficient to ensure that subrecipients received communication regarding the necessary items. Required information not communicated included: ? Subrecipient's unique entity identifier, ? Federal award identification number, ? Federal award date, ? Subaward budget period start and end date, ? Total amount of Federal funds obligated to the subrecipient by the pass-through entity including the current financial obligation, ? Total amount of Federal award committed to the subrecipient by the pass-through entity, ? Name of awarding agency, ? Assistance listing number; and, ? Indirect cost rate for Federal award including if the de minimis rate is charged. CRITERIA Federal regulation, 2 CFR 200.332(a), requires pass-through entities to communicate specific required information to subrecipients. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The documents used to communicate award information to subrecipients did not contain all required items. EFFECT These required communications are intended to help subrecipients meet all their reporting requirements, and to meet all award terms. Subrecipients subject to Single Audits also need this information for their audits. CONTEXT The State Treasurer's Office was appropriated approximately $123.3 million of funds from the Coronavirus Relief Fund (CRF) to be distributed to local governments. Almost all the funding was allocated to cities and counties based on salary and benefit expenses for licensed law enforcement officers since Federal guidance allowed for CRF funding to be used to reimburse law enforcement payroll costs. The Director of the Office of Management and Budget sent out an email to the North Dakota Association of Counties and to the North Dakota League of Cities to be forwarded to city and county leaders that indicated such funding was available. A Certification Law Enforcement Payroll Reimbursement Form was attached to the email. The combined information provided in the body of the email and the certification form did not contain all required items. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the State Treasurer's Office: A) Communicate all required information of 2 CFR 200.332(a) to subrecipients. B) Develop procedures to ensure that all Coronavirus Relief Fund award information is communicated to subrecipients. OFFICE OF STATE TREASURER RESPONSE The Office of State Treasurer does agree with finding that we were not in compliance with Federal regulations related to providing required information to subrecipients of Coronavirus Relief Funds (CRF). See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Office of State Treasurer over-reimbursed a county for law enforcement payroll by $4,000. The amount of the overpayment is considered the total known questioned cost. This overpayment error, projected to the entire population, results in an additional possible error of $29,603. CRITERIA According to the Federal Register dated January 15, 2021, The CARES Act provides that payments from the Fund may only be used to cover costs that: 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID?19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021. In addition, Federal Register indicates the Treasury has provided, as an administrative accommodation, that a State, local, or tribal government may presume that public health and safety employees meet the substantially dedicated test unless the relevant government determines that specific circumstances indicate otherwise. All costs of such employees may be covered using payments for services provided during the period that begins on March 1, 2020, and ends on December 31, 2021. CAUSE A county overstated its payroll costs by $4,000 on the CARES Act Coronavirus Relief Fund Eligibility Certification Law Enforcement Payroll Reimbursement form submitted to the ND Office of Management and Budget. In addition, subrecipient monitoring procedures did not identify this subrecipient as high risk (steady monthly payroll and immaterial amount provided in total to the subrecipient). EFFECT The Office of State Treasurer was not in compliance with Federal regulations as an overpayment is not an allowable use of Federal funds. CONTEXT The Office of State Treasurer was appropriated Coronavirus Relief Fund monies to provide payments to cities, counties, and other political subdivisions. Such payments were primarily related to reimbursing cities and counties for law enforcement payroll costs incurred between March 1, 2020 to December 31, 2020. Our testing of Coronavirus Relief Fund program expenditures, identified one error from a sample size of 40 out of a possible 461 payments. The error was an overpayment to a county of $4,000 for law enforcement payroll costs. This overpayment, projected to the entire population of $123,322,297, resulted in an additional possible error of $29,603. However, since the State's program ended December 31, 2020, the cities and counties with known or projected likely questioned costs would have until December 31, 2021, to incur allowable program expenditures to offset any questions costs. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of State Treasurer: A) Request support from the county for allowable expenditures incurred during the period beginning March 1, 2020, and ending on December 31, 2021, to offset the overpayment; or B) Recoup the overpayment from the county and refund the Department of the Treasury. OFFICE OF STATE TREASURER RESPONSE The Office of State Treasurer does agree with finding that we were not in compliance with Federal regulations as an overpayment to the county for reimbursement for law enforcement payroll is not an allowable use of Federal funds. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Office of Management and Budget underreported both current period and cumulative expenditures by at least $117,366,999 on the project and expenditure report to the Department of Treasury covering the period of January 2022-March 2022. These expenditures were subsequently reported in the period of April 2022-June 2022. CRITERIA The interim final rule, issued May 17, 2021, states "The quarterly Project and Expenditure reports will include financial data, information on contracts and subawards over $50,000, types of projects funded, and other information regarding a recipient?s utilization of the award funds..... Treasury will provide additional guidance and instructions on the reporting requirements outlined above for the Fiscal Recovery Funds at a later date." (Federal Register Vol. 96, No.93 pgs. 26814-26815). The final rule published January 27, 2022 which amended the interim rule also stated "Recipients are advised to also consult Treasury?s Reporting and Compliance Guidance for additional information on program administration processes and requirements, including applicability of the Uniform Guidance". Federal Register Vol. 87, No.18 pg. 4340). Per this guidance which was first published June 17, 2021, recipients were required to submit Project and Expenditure reports that included current period expenditures and cumulative expenditures for reporting periods covering March 2021-December 2021 and January 2022-March 2022. (Compliance and Reporting Guidance - State and Local Fiscal Recovery Funds, V5.0 pg.17-19). The FY 2022 compliance supplement also states that the SEFA should report all aggregate expenditures for all four eligible use categories, not just the results of the revenue loss calculation or standard allowance. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Individual agencies paid SLFRF expenditures through the state's accounting system. OMB transferred reimbursement of expenditures to the individual agencies upon request. OMB reported information on the Federal project and expenditure reports based on OMB's transfers out to agencies. OMB tracked these transfers and reported the amount tracked as current period and cumulative period expenditures for their Project and Expenditure report. Expenditures may be reported on a cash or accrual basis. Some agencies did not request a transfer for paid expenditures or provide information relating to incurred expenditures to OMB prior to the reporting period end. The State Treasurer paid approximately $92 million and the Department of Human Services paid approximately $25 million during the period that was not transferred to these agencies until after the reporting period and not reported in the period January 2022-March 2022. EFFECT The timing of expenditures made using State and Local Fiscal Recovery Funds (SLFRF) was reported inaccurately to the Department of Treasury. CONTEXT In March 2021, the Federal Department of Treasury obligated funds to all 50 states under the State Local and Fiscal Recovery Fund to help states mitigate negative economic impacts caused by the COVID-19 pandemic. In November 2021, the special session of the 67th legislature obligated use of these funds to various agencies across the state. As the state was able to show that the revenue lost in years 2020 and 2021 exceeded the amount of the obligation from the Department of Treasury, the state was able to claim use of these funds under revenue replacement which allowed the state to utilize them for 'government operations' in addition to other specific uses and also allowing the state to report use of these funds under a single 'revenue replacement' project. The agencies began using the funds for purposes after they were obligated by the state legislature and began recording expenditures against the grant throughout our audit period. When these funds were initially disbursed to the state in March 2021, the funds were received by OMB and OMB then transferred reimbursement to agencies on request. North Dakota's project description on the reports was consistent and based on legislative appropriation. As reported, "Due to its extraordinary revenue loss during the pandemic, North Dakota?s entire SFRF allocation is dedicated to project expenditure category group 6 ? Revenue Replacement. Consequently, all expenditures will fall under project expenditure category 6.1 ? Provision of Government Services. Government services, as defined by the North Dakota legislature, includes economic development and workforce development initiatives, infrastructure and deferred maintenance initiatives, state service delivery and information technology improvements, and healthcare and emergency response initiatives." Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Office of Management and Budget develop corrective action and properly report the state's SLFRF current period expenditures and cumulative expenditures to the Department of Treasury as accumulated from each agency's records within the state's accounting system. OFFICE OF MANAGEMENT AND BUDGET RESPONSE The Office of Management and Budget agrees with this finding. The expenditures referenced in this audit finding were incurred by agencies prior to the period in which the Federal funds were included in the quarterly expenditure reports for the State and Local Fiscal Recovery Fund. Because OMB is responsible for the state reporting under this program, it is necessary to maintain some level of control over these funds. Consequently, OMB manages the funds centrally and developed a process to reimburse agencies for their eligible expenditures once expenditures were incurred and agencies requested reimbursement. As a result, reimbursement from the state?s allocation of SLFRF moneys always occurs after the agency expenditure. Funds are included in the Federal report for the period in which reimbursement from the SLFRF occurs. In some cases, this results in the agency expenditure occurring in a period prior to the period covered under the quarterly SLFRF report in which the reimbursement is reported. However, until reimbursement occurs, the expenditure is charged to a funding source other than SLFRF. All expenditures reimbursed through SLFRF are included in Federal reports for the period in which the reimbursement occurred. See ?Management?s Response and Corrective Action? section of this report. AUDITOR?S CONCLUDING COMMENTS While the Office of Management and Budget agrees with the finding, continuing Federal reporting based on the timing of reimbursed expenditures will likely cause further inaccurate SLFRF reporting. In addition, amounts transferred to agencies are not confirmed to not exceed incurred expenditures to ensure a reimbursement process is in place.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not report Child Nutrition Cluster subawards to the Federal Funding Accountability and Transparency Act (FFATA) correctly. After testing FFATA reporting for the Child Nutrition Cluster, it was discovered that there were FFATA errors in the following three areas: 1. The Department of Public Instruction did not report the subaward information for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2021 grant year which runs from October 2020-September 2021. After an analysis of grant awards for that grant year, it was discovered that 14 subawards should have been reported to FFATA, totaling $1,593,654. ?See Schedule of Findings and Questioned Costs for chart/table? 2. The Department of Public Instruction did not report the subaward information timely for the Fresh Fruit and Vegetable program (Assistance Listing number 10.582) for the 2022 grant year awards (October 2021-September 2022) awarded in October 2021. After an analysis of grant awards awarded in October 2021, we tested 5 of 13 awards and found all 5 were not submitted timely to FFATA. Four (4) of the tested awards should have been reported to FFATA by 1/31/2022. The fifth award should have been reported to FFATA by 2/28/2022. They were all reported to FFATA on 7/28/2022. Those grant awards totaled $623,000. ?See Schedule of Findings and Questioned Costs for chart/table? 3. FFATA isn't being submitted for the following Assistance Listing numbers: 10.553, 10.555, 10.556 and 10.559. Because these Assistance Listing numbers are all included in one grant award, therefore, one FAIN number, they would all be reported in one FFATA report. The Department of Public Instruction did not report the subaward information for FAIN 223ND309N1099. After an analysis of these grant awards, 206 sponsors receiving total Federal grant payments over $30,000 should have been reported. Those grant payments totaled $168,897,721. The $169 million is based on payments made from 7/1/2020 - 6/30/2022. ?See Schedule of Findings and Questioned Costs for chart/table? CRITERIA Federal regulation 2 CFR 170, Appendix A requires a Federal Financial Assistance Transparency Act (FFATA) report for each subaward that equals or exceeds $30,000 no later than the end of the month following the month in which the obligation was made. The subaward information is then available to the public on the USA Spending website for transparency. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE Based on discussion with staff, a lack of understanding of FFATA reporting requirements resulted in the FFATA reporting errors. The Department of Public Instruction is only reporting FFATA for the Fresh Fruit and Vegetable program because the amounts given to sponsors is predetermined and not reimbursement based. For the other programs in the Child Nutrition Cluster, DPI does not report FFATA because they are meal count grants and amounts are not predetermined. There is no waiver or statement in the grant terms and conditions for the meal count grants saying that FFATA doesn?t need to be completed for these programs. The Department also couldn?t find a waiver or any information from their USDA contact saying that FFATA doesn?t need to be completed. Therefore, the FFATA should have been completed for all programs in the Child Nutrition Cluster. Because the awards to sponsors are not predetermined, the auditor is reporting grant payments during the audit period instead of award amounts. EFFECT Not meeting the FFATA requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of Federal awards. Additionally, Federal regulations address actions that Federal agencies may impose if a state entity does not comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. According to 2 CFR 200.208(c), ?Specific conditions,? these actions may include ? requiring reimbursement instead of advance payments; ? not allowing the agency to proceed to the next phase until it submits evidence of acceptable performance; ? requiring additional, more detailed financial reports or additional project monitoring; ? requiring the agency to obtain technical or management assistance; or ? establishing other prior approvals. If the Federal agency determines the state agency cannot remedy its noncompliance through the above actions, 2 CFR 200.339, ?Remedies for noncompliance,? outlines additional actions the Federal agency may take. Depending on the circumstances, these actions may include ? temporarily withholding payments until the noncompliance has been corrected, ? denying the use of funds, ? partly or fully suspending or terminating the Federal award, ? suspending or debarring the agency, ? withholding further awards for the project or program, or ? pursuing other available legal remedies. CONTEXT There were 539 sponsors receiving Federal grant awards during our audit period totaling $174,653,181. Of those 539 sponsors, 233 (43%) were over the $30,000 threshold and should have been reported to FFATA, for a total of $172,004,887 (98%). Of the 233 sponsors over the $30,000 threshold, only 13 sponsors (6%) were reported to FFATA, totaling $1,513,512 (1%). This results in 220 sponsors receiving Federal grant awards (94%) not reported to FFATA, totaling $170,491,375 (99%). Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Department of Public Instruction ensures timely and accurate submission of FFATA reports in accordance with Federal regulations and retain further instructions or waiver from the Federal agency. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE We agree with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Child Nutrition Cluster program prior to February of 2021. CRITERIA 31 U.S.C. 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient, any additional requirements, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The prior audit finding corrective action wasn't implemented until February of 2021. Therefore, the grant templates were still missing information as was documented during the 2019-2020 single audit. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT During our audit period, there were 412 subrecipients receiving Federal grant agreements for the Child Nutrition Cluster program. During 2021, there were 215 subrecipients and 197 in 2022. As there was a similar finding in our prior audit that was not implemented until February of 2021, only grants obligated after this date and before the end of our audit period of 6/30/2022 were considered in our testing. Grants made prior to February 2021 were considered to have missing information. During our testing, no missing information was noted in grants made after February 2021. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-022 was reported in the immediate prior year. Finding 2018-042 and 2016-068 were made in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction continue the corrective action that was implemented in February of 2021 to ensure subrecipients are made aware of all required grant award information for the Child Nutrition Cluster program. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the recommendation See ?Management?s Response and Corrective Action? section of this report.