Federal Agency: Department of Transportation Federal Program: 20.106 Airport Improvement Program, COVID-19 Airports Programs, and Infrastructure Investment and Jobs Act Programs Identification Number: 3-24-0017-049-2021 Requirement: Reporting Type of Finding: Significant deficiency in internal control over major program Criteria: Federal revenue, federal expenditures and the recipient share are to be reported for the period Form SF-425 is being filed. Condition: Forms SF-425, Federal Financial Report (FFR), were completed using amounts from a varying reporting period. Cause: There was no management oversight of the preparation of Form SF-425. Effect: The Department of Transportation will not have accurate information to assess the status of each project. Context: FFR for Grant 49 was filed with period-end date September 30, 2022 noting $1,488,124 of expenditures when actual expenditures were $1,802,530. The difference was due to a request which was marked as paid on June 30, 2022 and was included in the June 30, 2022 FFR. The request was payable as of June 30, 2022 and was paid in July 2022. Repeat Finding: This finding was reported for the year ended June 30, 2022 as 2022-002 as a significant deficiency in internal control. For the years ended June 30, 2021 and 2020 the finding was reported as 2021-002 and 2020-004, respectively, as a material weakness and noncompliance. Recommendation: The finance department should provide accounting records to the airport that are for the reporting period the Form SF-425 is being prepared. Also, since reports are filed on the cash basis of accounting, any accruals should be reversed so reporting is consistent from period to period. This will provide the Department of Transportation with an accurate accounting of where the project stands. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.224 Health Center Program Identification Numbers: H80CS29007 H8DCS36329 H8ECS38904 H8FCS41132-01-00 Requirement: Reporting Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Supporting documentation should match the amounts reported on all reports required to be filed for federal programs. Condition: Supporting documentation for key line items on the Uniform Data System (UDS) report and Federal Financial Report (FFR) did not match the reported amounts. Cause: Review and approval of grant reporting did not take place at the level needed to support accurate federal reporting. Also, the Health Center experienced a high volume of employee turnover. Effect: Misinformation presented to the federal government may lead to federal inquiries of those charged with governance. Context: The supporting documentation for the reports selected for testing (six FFRs and one UDS report) did not tie into the amounts reported on the FFRs and UDS. The information used to prepare the reports could not be recreated by Health Center staff. For two key line items in the UDS, Health Center staff could not provide supporting information to support the amounts reported. Amounts in the general ledger did not support the financial data for the varying reporting periods utilized in preparation of the reports. Repeat Finding: This finding was reported for the year ended June 30, 2022 as 2022-003. Recommendation: The Health Center should maintain any and all support utilized in the preparation of federal reports. We also recommend that Health Center staff receive proper training on the patient data software so that they are able to run reports that are necessary for the UDS reports. Documentation of the methods utilized to extract activity from the general ledger for financial reporting should also be maintained. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.224 Health Center Program Identification Numbers: H80CS29007 H8DCS36329 H8ECS38904 H8FCS41132-01-00 Requirement: Special Tests and Provisions Type of Finding: Significant deficiency in internal control over major program; Noncompliance Criteria: Patient charges are adjusted based on income and family size by applying the Health Center’s sliding fee discount schedule. Condition: Sliding fee discounts are not applied appropriately for all patients. Cause: There is no management oversight in this area. Also, employees have not been properly trained and are not consistently utilizing the software that maintains patient data. Effect: The Health Center is not compliant with federal regulations which could result in the federal government imposing additional requirements or withholding, disallowing or suspending grant funds. Context: Out of the 60 patients selected for testing, 11 were charged less than they should have been, 4 patients were charged more than they should have been and 1 patient was unable to be tested due to a lack of documentation. The Health Center’s sliding fee policy calculates fees based on gross monthly pay. For 2 patients selected for testing, the calculation was based on their monthly net pay. Repeat Finding: This finding was reported for the years ended June 30, 2022 and 2021 as 2022-004 and 2021-006, respectively. Recommendation: All elements required for the sliding fee discount should be properly maintained in Allscripts, including documentation of zero household income. Employees should be properly trained on the software, and a user manual should be created related to patient intake so patient records are consistent and documented appropriately. The sliding fee discount noted in the patient data software should correspond to the co-pay amount listed on patient billings. Health Center staff in charge of billing should review the patient data to ensure the correct adjustment was made and patients were charged the correct co-pay amount. Any discrepancies should be brought to the attention of Health Center management before bills are processed. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.224 Health Center Program Identification Numbers: H80CS29007 H8DCS36329 H8ECS38904 H8FCS41132-01-00 Requirement: Reporting Type of Finding: Significant deficiency in internal control over major program Criteria: Annual and final FFRs should be submitted 90 days after the report period quarter-end date. The annual UDS should be submitted by February 15th. Condition: Annual and final FFRs and the UDS report filed for reporting periods for the year ended June 30, 2023 were not submitted timely. Cause: Proper monitoring of grant report submissions was not performed. Effect: Failure to comply with reporting requirements can result in deferral or restrictions of future funding decisions by the funding agency. Context: Of the four annual and final FFRs tested, all reports were submitted between 6 and 12 business days late. The annual UDS tested was submitted 7 business days late. Repeat Finding: This finding was reported for the year ended June 30, 2022 as 2022-005. Recommendation: The Health Center and Finance Department should maintain a schedule of required reporting with corresponding due dates. A designated employee should be assigned to monitor the report submissions with the goal that reports should be submitted timely, in compliance with the grant agreements. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.137 Community Programs to Improve Minority Health Grant Program Identification Number: 1 CPIMP211296-01-00 Requirement: Subrecipient Monitoring Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: A pass-through entity’s subrecipient monitoring policies and procedures should provide information about the entity’s process to identify subawards, evaluate risk of noncompliance and perform monitoring procedures based upon identified risks. Condition: Program management does not have knowledge of the process used to select subrecipients. Monitoring procedures performed were not documented and reports submitted by the subrecipients were not reviewed. Cause: The program has had significant employee turnover and there was a lack of documentation of these policies and procedures. Effect: Selecting subrecipients without a formal evaluation process and performing minimal monitoring procedures increases the risk of noncompliance for the City and could lead to a loss of funding if the subrecipients are deemed noncompliant. Context: The City has two subrecipients to which they pass on the federal funding. There was no knowledge or documentation as to how the subrecipients were chosen or how the subaward agreements were developed. The City did hold progress meetings with subrecipients, but there were no minutes taken or any documentation maintained related to these meetings. Financial reports submitted by the subrecipients to program management were not reviewed to ensure grant funds were utilized for allowable activities and costs. Repeat Finding: This finding was reported for the year ended June 30, 2022 as 2022-007. Recommendation: Program management should develop standardized procedures for selecting and granting subawards. These procedures should be formalized and maintained for future reference. Brief minutes of progress meetings should be taken to show that monitoring is taking place. All reporting by the subrecipient should be reviewed by management of the program. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.137 Community Programs to Improve Minority Health Grant Program Identification Number: 1 CPIMP211296-01-00 Requirement: Subrecipient Monitoring Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Subaward agreements should include terms and conditions of the subaward, making the subrecipient aware of the award information required by Uniform Guidance Section 200.331(a) sufficient for the pass-through entity to comply with federal statutes, regulations and the terms and conditions of the award. Condition: Subaward agreements do not make Uniform Guidance requirements and regulations clear. They also do not contain language that supports subrecipient classification. Cause: Program management does not possess adequate knowledge of subrecipient monitoring requirements and did not prepare an adequate subrecipient agreement. Effect: Failure to explicitly state federally-imposed requirements and regulations may result in noncompliance by the subrecipient and lead to federal inquiries of those charged with governance. Context: Subrecipient agreements are titled “Memorandums of Understanding” instead of subaward agreements. The agreement with the one subrecipient does not state a dollar amount that is being passed-through over the course of the agreement. The terms and conditions do not explicitly mention the Uniform Guidance. The agreement makes references to both subcontractors and subrecipients, and never explicitly identifies the subrecipient as such. The other subrecipient agreement refers to the City of Frederick, Maryland as “the Sponsor”, not a pass-through entity and does not explicitly name the subrecipient as such. The agreement does not mention the Uniform Guidance. Repeat Finding: This finding was reported for the year ended June 30, 2022 as 2022-008. Recommendation: Program management should revise subaward agreements to specifically note the requirements and regulations of the Uniform Guidance, as noted in Section 200.331(a). Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.137 Community Programs to Improve Minority Health Grant Program Identification Number: 1 CPIMP211296-01-00 Requirement: Subrecipient Monitoring Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: A pass-through entity must verify that subrecipients expected to be audited as required by 2 CFR Part 200, Subpart F, met this requirement. This verification ensures that the subrecipients take timely and appropriate action on deficiencies identified through single audits. Condition: Program management did not perform this verification. Cause: Program management does not possess adequate knowledge of subrecipient monitoring requirements. Effect: Failure to verify the single audit status of subrecipients may lead to unresolved subrecipient noncompliance and lead to federal inquiries of those charged with governance. Context: Program management stated that the subrecipients did not undergo single audits. The Federal Audit Clearinghouse website noted that both subrecipients had filed single audits for the subaward period which included program 93.137. Repeat Finding: This finding was reported for the year ended June 30, 2022 as 2022-009. Recommendation: Program management should obtain the single audits performed for the subrecipients and review for program deficiencies. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.137 Community Programs to Improve Minority Health Grant Program Identification Number: 1 CPIMP211296-01-00 Requirement: Reporting Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Supporting documentation must be maintained for all reports required to be filed for federal programs. Amounts reported on financial reports should be supported by the accounting records that support the audited financial statements and the schedule of expenditures of federal awards. Reports should be filed by the due date required in the grant agreement. Condition: Supporting documentation for key line items on the quarterly progress reports was not maintained. Amounts reported as cash receipts and cash disbursements did not match the underlying support. Brown Plus could not verify the submittal dates of reports. Cause: Review and approval of grant reporting did not take place at the level needed to support accurate federal reporting. Also, the Minority Health Program experienced a high volume of employee turnover. Effect: Misinformation presented to the federal government may lead to federal inquiries of those charged with governance. Context: The reports selected for testing (two quarterly financial and performance progress reports) did not have documentation maintained that supported the program data stated in the reports. As noted in the directions for the quarterly FFR, cash receipts and cash disbursements are only actual cash received. Brown Plus could not trace the cash disbursements and cash receipts to the general ledger detail. Out of the two quarterly financial reports tested, one was submitted a day late. The two performance reports tested did not include submittal dates. Staff at the Minority Health Center were unable to locate documentation of the submittal dates for the quarterly progress reports, which prevented us from verifying whether the reports were submitted on time. Repeat Finding: This finding was reported for the year ended June 30, 2022 as 2022-010. Recommendation: Program management should maintain any and all support utilized in the preparation of federal reports. Documentation of the methods utilized to extract activity from the general ledger for financial reporting should also be maintained. Minority Health Program staff preparing reports should carefully review reporting instructions to ensure the correct amounts are reported and that reports are submitted timely. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.137 Community Programs to Improve Minority Health Grant Program Identification Number: 1 CPIMP211296-01-00 Requirement: Activities Allowed or Unallowed; Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major program Criteria: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases or an unallowable activity and a direct or indirect cost activity. Condition: An employee of the program did not have any pay allocated to the program in the general ledger. Cause: The City believes an override occurred in the accounting system excluding the employee from the program. There is no support for this conclusion. Effect: Failure to allocate employee pay in accordance with federal requirements could result in a loss of funding. Also, payroll amounts charged to another program may be overstated. Context: For all five pay periods tested, an employee whom was allocated to the Minority Health Program in the payroll system was excluded from the Minority Health Program in the accounting software. Support could not be provided showing that this allocation was appropriate. Recommendation: The Minority Health Program staff should maintain support and rationale for all allocations of payroll costs for employees charged to federal awards. Additionally, employees should earmark their timesheets with the number of hours worked on each program. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.568 Low-Income Home Energy Assistance Pass-Through Entity: Maryland Department of Human Services Identification Number: FIA/OHEP/22-001 Requirement: Cash Management Type of Finding: Significant deficiency in internal control over major program Criteria: Interest earned in excess of $500 on federal cash draws should be remitted annually to the Department of Health and Human Services, Payment Management System (Uniform Guidance Section 200.305(9)). Condition: The amount of interest on federal cash draws could not be determined. Cause: Management does not have any support for the interest earned specific to federal cash draws for this program. Effect: If interest in excess of $500 was earned, the City would owe the Department of Health and Human Services. Context: During inquiries with program management and the finance department, it was noted that the City does not believe they have earned interest in excess of $500. The City had total draw downs for the program of $2,393,735 which are subject to earning interest. The City was ultimately not able to provide any evidence to support the fact that the draw downs did not earn less than $500 and, as such, their claim could not be corroborated. Repeat Finding: This finding was reported for the year ended June 30, 2022 as 2022-013. Recommendation: The City should track interest earned on each applicable federal program to ensure they are in compliance with federal regulations. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.568 Low-Income Home Energy Assistance Pass-Through Entity: Maryland Department of Human Services Identification Number: FIA/OHEP/22-001 Requirement: Reporting Type of Finding: Significant deficiency in internal control over major program Criteria: Financial reports should be submitted to the awarding agency by the 15th of the subsequent month. Condition: Financial reports filed for reporting periods within the year ended June 30, 2023 were not submitted timely. Cause: Review and approval of grant reporting did not take place at the level needed to support accurate federal reporting. Also, the Low-Income Home Energy Assistance program experienced a high volume of employee turnover. Effect: Failure to comply with reporting requirements can result in deferral or restrictions of future funding decisions by the funding agency. Context: Of the four financial reports tested, three reports were submitted between 1 and 39 business days late. Repeat Finding: This finding was reported for the year ended June 30, 2022 as 2022-014. Recommendation: Low-Income Home Energy Assistance program management and the finance department should maintain a schedule of required reporting with corresponding due dates. A designated employee should be assigned to monitor the report submissions with the goal that reports should be submitted timely, in compliance with the grant agreements. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.568 Low-Income Home Energy Assistance Pass-Through Entity: Maryland Department of Human Services Identification Number: FIA/OHEP/22-001 Requirement: Eligibility Type of Finding: Significant deficiency in internal control over major program Criteria: Client benefit amounts are calculated based on household size, level of income and heating type. Weatherization benefit amounts are paid out based on income and eligibility of the building. Condition: Benefit amounts paid directly to landlords on behalf of clients were unable to be recalculated. Weatherization crisis status was unable to be verified based on client documentation. Cause: Management did not implement and enforce procedures to ensure documentation was maintained for landlord direct payments and crisis status of heating and cooling equipment. Effect: Failure to comply with reporting requirements can result in deferral or restrictions of future funding decisions by the funding agency. Context: Of the 25 Maryland Energy Assistance Program (MEAP) client files tested, 2 involved payments made directly to landlords. For these cases, we were unable to recalculate or verify the benefit amounts. Discussions with program management indicated that documentation supporting these payments is not retained, as the benefit amounts are automatically calculated by the State's system. Additionally, of the 5 Weatherization Assistance Program (WAP) client files tested, 4 were designated as crisis clients. However, their profiles lacked documentation to support their crisis status. Program staff indicated that the Hancock software does not require supporting documentation for crisis status, and as a result, some energy auditors include a narrative summary of the crisis condition, while others omit it entirely. Recommendation: Program management should obtain a thorough understanding of the calculation methodology used by the State’s software for payments made directly to landlords and implement procedures to independently verify or recalculate benefit amounts, where feasible, to identify any potential errors. Additionally, program management should establish standardized procedures for documenting crisis status in client profiles to ensure consistent and sufficient support for eligibility determination. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: 93.568 Low-Income Home Energy Assistance Pass-Through Entity: Maryland Department of Human Services Identification Number: FIA/OHEP/22-001 Requirement: Period of Performance Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: In accordance with the terms and conditions of the grant agreement, administrative costs charged to the grant must relate to allowable activities incurred during the grant period of July 1, 2021 through June 30, 2023. Condition: Administrative costs were charged to the grant outside the grant period. Cause: Management has not established or implemented sufficient internal controls to ensure that expenditures charged to the grant are limited to those incurred within the allowable grant period. Effect: Inclusion of costs outside the allowable grant period in reports to the federal government may lead to federal inquiries of those charged with governance. Known Questioned Costs: Known questioned costs related to our identified error total $43,878. Context: Common area maintenance (CAM) fees related to the rent of the program building for the period August 2017 through June 2021 were charged to the grant during the year ended June 30, 2023. Recommendation: Before using federal grant funds to pay for expenditures, program staff should ensure that costs are within the period of performance of the grant. We recommend notifying the pass-through entity of this error and returning the funds received for ineligible expenses. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of the Treasury Federal Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Identification Number: SLT-8854 Requirement: Reporting Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Amounts reported on financial reports should be supported by the accounting records that support the audited financial statements and the schedule of expenditures of federal awards. Condition: Amounts reported as obligations and expenditures on the Project and Expenditure Reports did not match the supporting documentation. Cause: Review and approval of grant reporting did not take place at the level needed to support accurate federal reporting. Also, the program has had significant employee turnover. Effect: Misinformation presented to the federal government may lead to federal inquiries of those charged with governance. Context: The supporting documentation for one out of the two Project and Expenditure Reports did not tie to the amounts reported on the report. The information used to prepare the reports did not take into consideration accruals or judgments made by the finance department for the use of federal funds. Recommendation: We recommend that management implement a standardized reconciliation process to ensure that all Project and Expenditure Reports align with supporting documentation. This process should involve coordination between the reporting team and finance to validate that all amounts reported accurately reflect the use of federal funds. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program: 14.231 Emergency Solutions Grant Program Pass-Through Entity: Maryland Department of Housing and Community Development Identification Number: E-20-DW-24-0001 Requirement: Activities Allowed or Unallowed Type of Finding: Significant deficiency in internal control over major program Criteria: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases or an unallowable activity and a direct or indirect cost activity. Condition: Support for payroll costs claimed under the program was not maintained for all pay periods. Cause: Supporting documentation is not maintained for payroll allocations. Effect: Failure to allocate employee pay in accordance with federal requirements could result in a loss of funding. Context: Out of five pay periods tested, two pay periods excluded an allocation of a program employee’s time. For the remaining three pay periods, the aforementioned program employee was allocated to the program but no documentation was maintained supporting the allocation. Recommendation: The Emergency Solutions program staff should maintain support and rationale for all allocations of payroll costs for employees charged to federal awards. Additionally, employees should earmark their timesheets with the number of hours worked on each program. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program: 14.231 Emergency Solutions Grant Program Pass-Through Entity: Maryland Department of Housing and Community Development Identification Number: E-20-DW-24-0001 Requirement: Special Tests and Provisions Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: The grant recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient’s complete payment request. Condition: Payments were not made to subrecipients within 30 days of the request date. Cause: Program management does not possess adequate knowledge or monitoring procedures to ensure timely processing and payment of subrecipient invoices. Effect: Failure to make timely payments to subrecipients in accordance with federal requirements could result in a loss of funding. Context: Of the 32 subrecipient payments reviewed, 13 were not made within the required 30-day period. The delays ranged from a minimum of 5 business days to a maximum of 84 days. Recommendation: The Emergency Solutions program staff should carefully monitor subrecipient request dates and communicate regularly with the finance department to ensure timely payment of the requests. Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.