Audit 378003

FINDING REFERENCE NUMBER 2024-003 (See FINDING REFERENCE NUMBER 2024-001) FEDERAL PROGRAMS ALL FEDERAL PROGRAMS ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AWARD NUMBER ALL AWARDS COMPLIANCE REQUIREMENT REPORTING – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TYPE OF FINDING MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE 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 Federal programs revenues, we identified significant cash receipts for the Disaster Grants – Public Assistance related to reimbursements of payroll and overtime payments previously paid by Bureau state funds. However, we could not identify any expenditures register under the Federal program on Schedule of Expenditures of Federal Awards (SEFA) during the current fiscal year or any prior fiscal year related to the reimbursements received. To include the expenditures as Federal program expenditures, the Bureau staff must recognize fund transfers from the Federal program accounts to state funds accounts by preparing the related journal entries which effectively records the expenditure amounts on the SEFA. As discussed with management, the fund transfers were not made during the fiscal year 2024-2025 nor have any adjustment been registered to recognize the Federal expenditures incurred. The total amount received and expended was $10,017,388. We requested the fund transfers and related entries information if those were performed after the fiscal year end, but as of the date of our audit, no transfers or adjustments had been made. After the condition was identified and discussed with the Bureau management, the corresponding adjustments to correct record the transfers and related expenditures on the Federal program were performed and provided to us to correct the amounts related to the program reported in the SEFA and financial statement as of June 30, 2024. QUESTIONED COSTS None PERSPECTIVE INFORMATION The Bureau failed to identify properly in its records and/or accounting records Federal grants funds that they received and expended during the fiscal year. This cause that when Bureau prepared the SEFA and financial statement for audit purposes the SEFA was incomplete and misstated. Also, this condition has limited the use of the reimburse funds on other operating activities of the Bureau. STATEMENT OF CAUSE The Bureau budget and finance staff failed to identify the Federal program receipts and performed the fund transfers and related journal entries on a timely manner to be included on the correct fiscal year, causing the preparation of an incomplete and misstated financial statement and SEFA initially submitted for audit purposes. POSSIBLE ASSERTED EFFECT The Bureau fail to include all Federal programs expenditures in the SEFA causing misstatements in the SEFA, which may lead to errors in the determination if a Uniform Guidance audit is required to the Bureau and could provoke an incorrect Major Program Determination by the auditors, resulting in the most likely exclusion of a Major Program for audit purpose. Also, since the original expenditures were paid with state funds and the funds received shall be reimbursed to the Bureau state funds accounts, the funds have been idle for a long period of time, limiting the potential use of the funds by the Bureau on operating needs for more than two years. IDENTIFICATION OF REPEAT FINDING Not applicable. RECOMMENDATIONS We recommend the Bureau budget and finance staff to maintain adequate records and controls 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 the SEFA preparation to provide assurance that all require program activities / expenditures are included on the SEFA. In addition, the Bureau 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 in the SEFA and if any reimbursements to state funds are applicable, that those reimbursements are made on a timely basis.

FINDING REFERENCE NUMBER 2024-004 (See FINDING REFERENCE NUMBER 2024-002) FEDERAL PROGRAM ALL FEDERAL PROGRAMS ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AWARD NUMBER ALL AWARDS COMPLIANCE REQUIREMENT REPORTING – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TYPE OF FINDING MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE 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 Bureau, we identified misstatements related to the programs reported in the schedule. One Federal program, ALN 21.027, Coronavirus State and Local Fiscal Recovery Fund, was not included in the SEFA, and material adjustments were made to properly present the Federal program expenditures for the fiscal year on the SEFA and financial statement. QUESTIONED COSTS None PERSPECTIVE INFORMATION The Bureau failed to identify properly in its records and/or accounting records of Federal grants funds that they received and expended during the fiscal year. This cause that when the Bureau prepared the SEFA and financial statement for audit purposes, the SEFA was incomplete and misstated. STATEMENT OF CAUSE The Bureau staff failed to identify the Federal grants expended during the fiscal year and to keep appropriate 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 initially submitted for audit purposes. POSSIBLE ASSERTED EFFECT The Bureau staff fail to include all Federal programs and total expenditures in the SEFA causing misstatements in the schedule, may lead to errors in the determination if a Uniform Guidance audit is required to the Bureau and could provoke an incorrect Major Program Determination by the auditors, resulting in the most likely exclusion of a Major Program for audit purpose. IDENTIFICATION OF REPEAT FINDING Not applicable. RECOMMENDATIONS We recommend the Bureau to maintain adequate records related to the Federal programs 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 Bureau must perform regular fiscal monitoring over the Federal programs transactions to provide reasonable assurance that all Federal programs/transactions are properly recorded and included in the SEFA.

FINDING REFERENCE NUMBER 2024-005 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 BPRP 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 BPRP was unable to provide timely the financial statement and related supporting documentation in order to apply required audit procedures. STATEMENT OF CAUSE The BPRP accounting and budget staff did not have an effective accounting system controls and procedures to assure that the required financial statements and supporting documentation was made available for audit purposes within the required period established to comply with the Federal regulations. POSSIBLE ASSERTED EFFECT The BPRP 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 BPRP cannot be considered by the auditor as a low risk auditee. IDENTIFICATION OF REPEAT FINDING Not previously reported. RECOMMENDATIONS We recommend the BPRP 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 BPRP needs to implement adequate internal controls procedures in order to ensure that the supporting documentation is available in a timely manner.