Audit 370818

FEDERAL PROGRAM ALL FEDERAL PROGRAMS ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AWARD NUMBER ALL AWARDS COMPLIANCE REQUIREMENT REPORTING TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS CRITERIA 2 CFR §200.510 Financial Statements, (b) states that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended. At a minimum, the schedule must: (1) list individual Federal Programs by Federal agency, (2) for Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included, (3) provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available, (4) Include the total amount provided to subrecipients from each Federal program, (5) for loan or loan guarantee programs identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. STATEMENT OF CONDITION During our audit procedures of the Schedule of Expenditures of Federal Awards (SEFA) prepared by the Department, we identified misstatements related to the programs reported in the SEFA. One Federal program was not included in the SEFA, and adjustments were proposed in order to reconcile the information included in the SEFA with the financial statement.PERSPECTIVE INFORMATION The Department failed to identify properly in its records and/or accounting records the Federal grants that they received and expended during the fiscal year, this cause that when the Department prepared the SEFA with the financial statement and for audit purposes the SEFA was incomplete and misstated. STATEMENT OF CAUSE The Department failed to identify the Federal grants expended during the fiscal year and to keep records of the transactions related to the Federal programs in order to properly identify the Federal programs and transactions when the SEFA is prepared causing the preparation of an incomplete and misstated SEFA. POSSIBLE ASSERTED EFFECT The Department may fail to include all Federal programs and total expenditures in the SEFA causing misstatements in the SEFA, errors in the determination if a Uniform Guidance audit is required to the Department and could provoke an incorrect Major Program Determination performed by the auditor, resulting in the most likely exclusion of a Major Program for audit purpose. IDENTIFICATION OF REPEAT FINDING Not applicable. RECOMMENDATIONS We recommend the Department to maintain adequate records related to the Federal programs in order to properly identify the Federal programs/transactions when the SEFA is prepared. Once a Federal award is granted or received, the information must be shared with all personnel involved in the financial statement and SEFA preparation to provide assurance that all required program activities / expenditures are included on the SEFA. In addition, the Department must perform a regular fiscal monitoring over the Federal programs transactions in order to provide reasonable assurance that all Federal programs/transactions are properly recorded and included on the SEFA

FEDERAL PROGRAM ALL FEDERAL PROGRAMS ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AWARD NUMBER ALL AWARDS COMPLIANCE REQUIREMENT REPORTING TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS CRITERIA 2 CFR § 200.512 Report Submission, (a) (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. STATEMENT OF CONDITION The Department did not submit the Data Collection Form and Reporting Package to the Federal Audit Clearinghouse of fiscal year ended June 30, 2024 during the required period. QUESTIONED COSTS None PERSPECTIVE INFORMATION The Financial Statement Audit and Single Audit Contract for the fiscal year ended on June 30, 2024 was signed on March 26, 2025. Accordingly, the Department was unable to provide timely the financial statement, SEFA and related supporting documentation in order to apply required audit procedures. STATEMENT OF CAUSE The Department did not have an effective accounting system and procedures to assure that the required financial statement and supporting documentation was made available for audit purposes within the required period established to comply with the Federal regulations. POSSIBLE ASSERTED EFFECT The Department did not comply with the submission date required for the Data Collection Form and Reporting Package, this could affect the continuance and new approvals of Federal funds. In addition, for the next two (2) fiscal years the Department cannot be considered by the auditor as a low risk auditee. IDENTIFICATION OF REPEAT FINDING Not applicable. RECOMMENDATIONS We recommend the Department maintain adequate accounting records related to the non-Federal and Federal funds in order to properly prepare the financial statement accurately and in a timely manner. In addition, the Department needs to implement adequate internal controls procedures in order to ensure that the supporting documentation is available in a timely manner. Also, request for proposals for the audit contract should be initiated with sufficient time in advance to permit the completion of the audit and submission of the Reporting Package.