Audit 370431

Grant No(s): 06HE000754-01, 06CH011990-02, 06CH011990-03, 06HP000184-01, 06HP000184-02, 06HP000184-03, 06HP000184-04, 06HP000184-05 Criteria: DHHS regulations and grant awards set the criteria for DHHS Financial Reports. These reports are due quarterly, semi-annually, and annually from Head Start grantees. Financial Reports must be submitted and reviewed within a certain timeframe based upon the end of the budget period. DHHS regulations and grant awards set the criteria for DHHS Annual Special Reports (OMB No. 4040-0016). This report is due annually from Head Start grantees. Annual Special Reports must be submitted and reviewed within a certain timeframe based upon the end of the budget period. Reports should be supported by applicable accounting and performance records. Condition: Of the reports selected for testing, the Parish did not submit the one SF-425 Semi-Annual Financial Report by the grantee submission deadlines. The SF- 425 Semi-Annual Financial Report had a submission deadline of January 30, 2024 and was submitted on January 31, 2024. The SF-425 Annual Financial Report had a submission deadline of July 30, 2023 and was submitted on October 30, 2023. The Parish also did not submit the one Annual Special Report by the grantee submission deadline. The SF-429 Real Property Status Report and SF-429A General Reporting had a submission deadline of July 30, 2023 and was submitted on September 20, 2023. In addition, some amounts in the SF-425 Semi-Annual Financial Report and SF-425 Annual Financial Report selected for testing did not agree to applicable accounting and performance records. Universe/Population: The universe/population for Financial Reporting is two SF-425 Semi-Annual Financial Reports and two SF-425 Annual Financial Reports. EA selected one out of the two SF-425 Semi-Annual Financial Reports and one out of the two SF-425 Annual Financial Reports for testing of reporting compliance requirements applicable to the program. The universe/population for Special Reporting is three annual SF-429 Real Property Status Reports and SF-429A General Reporting (OMB No. 4040-0016). EA selected one out of the three Annual Special Reports for testing of reporting compliance requirements. Cause: Jefferson Parish lacks an established control monitoring timely submission of Financial and Special Reports. Effect: Failure to comply with the reporting requirements may result in sanctions, including: temporary withholding of cash payments, whole or partial suspension of the Federal award, suspension, debarment or limited denial of participation in Department of Health and Human Services programs pursuant to 45 CFR 75.971. Questioned Costs: None determined. Identification of a repeat finding: This is a repeat finding from the previous audit, 2022-003. Recommendation: Jefferson Parish should establish a formalized control to monitor timely submission of Financial and Special Reports. View of Responsible Officials: With the support of a new leadership team, Jefferson Parish is committed to strengthening grants and financial management and enhancing the reliability of grants reporting. The Parish has engaged Deloitte & Touche LLP as a consultant to assist in establishing regular review practices, policies, procedures, and internal controls with the goal of improving audit readiness, refine documentation procedures, and strengthen internal controls to support accurate and complete financial data going forward. As part of this effort Jefferson Parish and Deloitte are working across Departments to re-define organizational structure, to establish governance and oversight between finance, accounting, and programmatic departments. Jefferson Parish and Deloitte are also working to implement data quality improvement measures, including the establishment of quarterly grants reconciliation and review processes. Jefferson Parish has also engaged Infor in the implementation of new financial and reporting technology to support improved financial processing and controls.

Grant No(s): 1505-0266 Criteria: Per the U.S. Department of the Treasury’s reporting guidelines for ALN 21.023, recipients are required to submit timely and complete quarterly reports and SF- 425 financial reports to ensure transparency and accountability in the use of federal funds. Condition: Of the reports selected for testing, Jefferson Parish did not submit the two SF- 425 Federal Financial Reports by the grantee submission deadlines. The SF- 425 Federal Financial Reports had submission deadlines of October 16, 2023 and January 15, 2024 and were submitted on November 16, 2023 and February 8, 2024, respectively. Of the reports selected for testing, Jefferson Parish did not submit the two quarterly reports by the grantee submission deadlines. The quarterly reports had submission deadlines of April 17, 2023 and July 17, 2023 and were submitted on May 17, 2023 and August 16, 2023, respectively. Universe/Population: The universe/population for Financial Reporting is four SF-425 Federal Financial Reports and four quarterly reports. EA selected two out of the four SF-425 Federal Financial Reports and two out of the four quarterly reports for testing of reporting compliance requirements applicable to the program. Cause: Jefferson Parish lacks an established control monitoring timely submission of Financial and Special Reports. Effect: Late and incomplete reporting may hinder the Treasury’s ability to monitor program performance and financial integrity, potentially impacting future funding decisions and compliance evaluations. Questioned Costs: None determined. Identification of a repeat finding: This is not a repeat finding. Recommendation: Jefferson Parish should establish a formalized control to monitor timely submission of Financial and Special Reports. View of Responsible Officials: With the support of a new leadership team, Jefferson Parish is committed to strengthening grants and financial management and enhancing the reliability of grants reporting. The Parish has engaged Deloitte & Touche LLP as a consultant to assist in establishing regular review practices, policies, procedures, and internal controls with the goal of improving audit readiness, refine documentation procedures, and strengthen internal controls to support accurate and complete financial data going forward. As part of this effort Jefferson Parish and Deloitte are working across Departments to re-define organizational structure, to establish governance and oversight between finance, accounting, and programmatic departments. Jefferson Parish and Deloitte are also working to implement data quality improvement measures, including the establishment of quarterly grants reconciliation and review processes. Jefferson Parish has also engaged Infor in the implementation of new financial and reporting technology to support improved financial processing and controls.

Grant No(s): 1505-0266 Criteria: Louisiana Revised Statute §24:523 requires public agencies to report any misappropriation, theft, or loss of public funds or assets to the Louisiana Legislative Auditor’s Office (LLA) immediately upon discovery. Additionally, 2 CFR §200.113 mandates that non-federal entities disclose in writing any violations of federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the federal award. 2 CFR §200.331 and Treasury Emergency Rental Assistance (ERA) Program Guidance require that entities establish and maintain effective controls to ensure that assistance is provided only to eligible recipients. This includes verifying income, housing status, and risk of homelessness or housing instability. Condition: ERA personnel at Jefferson Parish identified instances of what appears to be externally caused fraudulent activity that occurred in 2022 that were found and reported to the Parish’s internal auditor, local law enforcement (Jefferson Parish Sheriff’s Office) and the Federal Bureau of Investigation (FBI). The misappropriation of public funds was not reported to the LLA and the Jefferson Parish District Attorney’s Office in a timely manner. In addition, the Parish was not insured over these types of misappropriations. See Attachment A for additional information required by the LLA regarding each instance of fraud. Universe/Population: The universe/population for Eligibility testing is 4,214 Participants receiving a total of $12,070,966 in assistance through rental and utility assistance in 2023. We selected 60 participants for testing of eligibility compliance requirements applicable to the program, noting no exceptions in our 2023 testing. Cause: In 2022, Jefferson Parish did not have adequate policies and procedures over the application and monitoring of eligibility requirements on all potential awardees of rental and utility assistance. The Parish’s internal controls did identify that the fraud occurred. Also, the Parish did not have adequate procedures in place to ensure that instances of fraud were reported to the LLA and the District Attorney’s Office timely. Effect: The failure to report the fraudulent activity and ensure proper eligibility review resulted in noncompliance with both state and federal requirements, delayed corrective actions, and increased the risk of continued misuse of federal funds. Questioned Costs: The questioned costs of $424,515 represent payments made in 2022 to ineligible recipients due to fraudulent activity. We did not have any exceptions in our eligibility testing for 2023. Identification of a repeat finding: This is not a repeat finding. Recommendation: Jefferson Parish should continue to monitor eligibility of award requirements and application of those requirements. View of Responsible Officials: With the support of a new leadership team, Jefferson Parish is committed to strengthening grants and financial management and enhancing the reliability of grants reporting. The Parish has engaged Deloitte & Touche LLP as a consultant to assist in establishing regular review practices, policies, procedures, and internal controls with the goal of improving audit readiness, refine documentation procedures, and strengthen internal controls to support accurate and complete financial data going forward. As part of this effort Jefferson Parish and Deloitte are working across Departments to re-define organizational structure, to establish governance and oversight between finance, accounting, and programmatic departments. Jefferson Parish and Deloitte are also working to implement data quality improvement measures, including the establishment of quarterly grants reconciliation and review processes. Jefferson Parish has also engaged Infor in the implementation of new financial and reporting technology to support improved financial processing and controls.