Audit 368119

2024-001 – Coronavirus Capital Projects Fund - Assistance Listing No. 21.029; Grant Period - For the year ended December 31, 2024 Condition: The Organization did not comply with the approved procurement policy for expenses that were claimed under the federal program. Criteria: The Organization’s procurement policy states that the Organization will follow 2 CFR 200.320 for federal procurement methods. Cause: The Organization did not have the necessary procedures in place to comply with the federal procurement methods for 2 of 8 invoices selected for testing. Effect of Condition: The Organization was unable to provide documentation that the federal procurement methods were followed for 2 of 8 invoices selected for testing. Questioned Cost: None. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Organization's should adopt procedures to ensure federal procurement methods are followed for all purchases under a federal contract. Views of Responsible Officials and Planned Corrective Actions: At the time of the transactions in question, the Organization operated under the understanding that multiple bids were required only for costs exceeding $50,000. The Organization was then provided updated guidance from our audit firm indicating that the correct threshold was $10,000. This shift demonstrates the complexity of interpreting and applying procurement rules. Since the beginning of the grant, the Organization has actively researched and sought clarification on the applicable purchasing and contracting requirements. Unfortunately, different sources provided conflicting thresholds and requirements. Based on the information available at the time, the Organization made a deliberate and well-reasoned decision not to seek multiple bids for certain expenditures. The grant funding source received full documentation for these costs, did not raise concerns, and reimbursed the expenses without issue. The Organization acted in good faith and in alignment with the guidance it had at the time of these purchases. To address this finding the Organization has implemented a revised procurement policy requiring multiple bids or sole source rationale for any purchases exceeding $10,000. Staff have been made aware of this threshold, and procedures are in place to ensure compliance moving forward.

2024-002 – Coronavirus Capital Projects Fund - Assistance Listing No. 21.029; Grant Period - For the year ended December 31, 2024 Condition: The Organization did not report an accurate total of federal expenditures for the fourth quarter report which covered the period October 1, 2024 through December 31, 2024. Criteria: The Organization is required to provide quarterly reporting on the Coronavirus Capital Project Fund grant to Empire State Development. Cause: The Organization did not have the necessary procedures in place to provide an accurate total of fourth quarter project expenditures in the quarterly reporting request. Effect of Condition: The Organization did not provide an accurate total of fourth quarter project expenditures. Questioned Cost: None. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Organization's should adopt procedures to provide an accurate total of expenditures on all quarterly reporting requests. Views of Responsible Officials and Planned Corrective Actions: At the time of the Q4 2024 submission, management prepared and submitted the quarterly report prior to the completion of the quarter, resulting in interim financial data being included. This occurred because both weekly and quarterly reports were being produced concurrently, with overlapping information. While the reported numbers were estimates, they had no impact on project outcomes, payments, or work performed, and the granting agency did not raise any concerns following submission. To address this issue, management streamlined the reporting process beginning with Q1 2025 by aligning the quarterly reporting with finalized weekly reports to ensure accuracy and consistency. Additionally, the Organization has instituted a formal control requiring that all reporting submissions be routed through the CFO for review and approval rather than operations personnel. This process will ensure compliance with reporting requirements, prevent premature submission of interim data, and strengthen internal oversight of grant reporting.

2024-003 – Coronavirus Capital Projects Fund - Assistance Listing No. 21.029; Grant Period - For the year ended December 31, 2024 Condition: The Organization did not prepare timely reports to provide supporting documentation for the allocation of program payroll costs to the grant. Criteria: The Organization is required to prepare time studies to support the amount of program payroll costs charged to the grant. In addition, these time studies should include documented review and approval of management. Cause: The Organization did not have the necessary procedures in place to prepare, review and approve timely reports to support the allocation of program payroll costs. Effect of Condition: The Organization did not prepare or review and approve time studies in a timely manner to support the program payroll costs charged to the grant. Questioned Cost: None. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Organization's should adopt procedures to prepare time studies for all program payroll costs allocated to the grant. These time studies should be completed on a timely and periodic basis and should include a documented review and approval by management. Views of Responsible Officials and Planned Corrective Actions: The Organization had an established process in place to substantiate payroll costs and provided documentation to the funding source as requested. The funding source accepted the documentation and processed payments without raising any compliance concerns. Management has now implemented a new, more detailed time tracking procedure which will enhance documentation and is in line with the recommended process.