Audit 367691

FY End
2024-12-31
Total Expended
$904,388
Findings
1
Programs
8
Year: 2024 Accepted: 2025-09-25
Auditor: Rae & CO CPA LLC

Organization Exclusion Status:

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Contacts

Name Title Type
W3TKHA6RZ446 Candace Payne Auditee
7193485562 James E. Rae Auditor
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Notes to SEFA

The accompanying schedule of expenditures of federal awards (the Schedule) presents the activity of all federal award programs of the East Central Council of Governments (ECCOG), for the year ended December 31, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance). Because the Schedule presents only a selected portion of the operations of ECCOG, it is not intended to and does not present the financial position, changes in net assets or cash flows of ECCOG. The Schedule includes federally funded projects received directly from federal agencies and the federal amount of pass-through awards received by ECCOG through the State of Colorado or other non-federal entities.
ECCOG’s summary of significant accounting policies is presented in Note 1 in ECCOG’s basic financial statements. Governmental funds account for ECCOG’s federal grant activity. Amounts reported in the Schedule are recognized on the modified accrual basis when they become a demand on current available federal resources and other program requirements are met. Available means collectible within the current period, or soon enough thereafter, to pay liabilities of the current period or when matured. ECCOG considers all grant revenue as available if it is anticipated to be collected within one year after the financial statement date. Such expenditures are recognized following, as applicable, the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements or reports to federal agencies.
ECCOG has not elected to use the 10% de minimis indirect cost rate as allowed in the Uniform Guidance, Section 414.
Although the Schedule of Expenditures of Federal Awards is prepared to the best of ECCOG's knowledge and belief, amounts received or receivable from grantor agencies are subject to audit and adjustment by the grantor agencies, principally the federal government. Any disallowed claims, including the amount already collected, may constitute a liability of the applicable funds. The amount of expenditures which may be disallowed by the grantor, if any, cannot be determined at this time.

Finding Details

REFERENCE NUMBER 2024-002 Subrecipient Monitoring FEDERAL AGENCY Department of Transportation FEDERAL PROGRAM Formula Grants for Rural Areas and Tribal Transit Program ALN 20.509 IDENTIFICATION AS A REPEAT FINDING No QUESTIONED COSTS None EVALUATION OF FINDING Audit finding disclosed that are required to be reported in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). CRITERIA The Uniform Guidance at 2 CFR section 200.332(c) requires ECCOG as the pass-through entity to assess the subrecipient's fraud risk and risk of noncompliance to determine the appropriate level of subrecipient monitoring. The Uniform Guidance at 2 CFR 332(e) requires the pass-through entity to review financial and performance reports and ensure the subrecipient takes appropriate corrective action. Finally, the Uniform Guidance at 2 CFR 332(f) requires the pass-through to perform additional monitoring based on its risk analysis. CONDITION ECCOG did not perform a formal risk assessment of its subrecipients. ECCOG did not document the required level of subrecipient monitoring. ECCOG did not review financial reports. One entity had a Single Audit for the year-ended December 31, 2023. ECCOG did input the subrecipient's statistics into the Colorado Department of Transportation's COTRAMS system. CONTEXT ECCOG had three subrecipients, two of which were material. This finding occurred for all three subrecipients. CAUSE ECCOG performed an informal analysis of the entities' risks. In addition, during the years-ended December 31, 2023 and 2024 reimbursement of subrecipient costs was being resolved with the Colorado Department of Transportation (CDOT). Certain 2023 costs were not reimbursed until 2024. CDOT did not agree to pay the subrecipient costs for the period March, 2024 to December 2024 until January 2025. In 2025, these entities are no longer subrecipients of ECCOG. The two significant subrecipients are now subrecipients of CDOT. EFFECT OR POTENTIAL EFFECT Failure to adequately perform and document the risk assessments on its subrecipients could result in the inadequate monitoring of the activities and performance of a subrecipient. Also, this could result in Federal awards being used by the subrecipient for unauthorized purposes. RECOMMENDATION As noted above, ECCOG no longer has any subrecipients. ECCOG should document the necessary processes for subrecipient monitoring in its grant management policies. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION See ECCOG’s corrective action plan on page 16.