Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to federal regulations, property records must be maintained to include a description of the property, a serial number or other identification number, the source of funding for the property, who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the program was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years. Condition/Context: A physical inventory of equipment was not performed during fiscal year 2022 or in the prior fiscal year. There are no controls in place to ensure the inventory records are agreed to the capital assets ledger, and the accuracy and completeness of property records supporting federally funded assets could not be verified. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Lack of sufficient internal controls over physical inventory and property management may have contributed to this finding, in addition to limited staffing and competing priorities. Effect: Without a physical inventory of capital assets that agree to the general ledger, it is possible that assets could be misappropriated without detection or disposed of improperly. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-007. Recommendation: We recommend that the entity establish and implement procedures to perform a physical inventory of all equipment at least once every two years, in accordance with 2 CFR 200.313(d)(2). The results of the inventory should be reconciled to the property records and capital assets ledger. Additionally, management should implement controls to ensure ongoing accuracy and completeness of equipment records, particularly for federally funded assets. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Proper internal controls related to compliance of Matching, Level of Effort and Earmarking for AL# 93.600 - Head Start, require that grantees must ensure that at least 10 percent of its total funded enrollment is filled by children eligible for service under the Individuals with Disabilities Education Act, unless a waiver has been approved in writing by OHS (42 USC 9835(d) and 45 CFR section 1302.14(b)). Condition/Context: The Head Start program was unable to provide documentation identifying the number of children served that qualified for the Individuals with Disabilities Education Act; thus, compliance with the 10 percent requirement could not be verified, and no waiver documentation was provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Lack of oversight, record retention, and the ability to locate information for prior years due to turnover. Effect: Failure to demonstrate compliance with targeted earmarking requirement could lead to additional oversight by the funding agency. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-008. Recommendation: We recommend management emphasizes all documentation is obtained, properly completed, and retained for all children counted toward the 10 percent requirement. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). AL #93.441 SF-425 – Federal Financial Quarterly – These reports are filed on an annual and quarterly basis. It requires recipients to provide comprehensive information to ensure compliance with budgetary terms, federal regulations, and agency guidelines. AL #93.600 SF-429 – Real Property Status Report and SF-429-A General Reporting (OMB No. 4040-0016) - These forms are filed annually based upon the end of the budget period. The annual SF-429 is required for all grantees and must indicate whether the grantee has reportable real property. If so, a separate SF-429-A must be completed for each parcel of real property reported and accompany the annual SF-429. SF-425 – Federal Financial Quarterly & Annual Reports – These reports are filed on an annual and quarterly basis. It requires recipients to provide comprehensive information to ensure compliance with budgetary terms, federal regulations, and agency guidelines. AL #21.027 Project and Expenditure Report – Report on financial data, projects funded, expenditures, and contracts and subawards over $50,000, and other information. Project and Expenditure Reports are due on a regular, recurring basis after the Interim Reports. The reporting frequency and deadlines vary by type of recipient and total allocation amount. Condition/Context: During testing, the following was noted: AL #93.441 The Department was unable to provide 2 of 2 Quarterly SF-425 reports selected for testing. AL #93.600 The Department was unable to provide 2 of 2 SF-425 Quarterly reports, the SF-429 Real Property Status Report and the SF-429-A General Report selected for testing. AL #21.027 The Department was unable to provide the Annual Project and Expenditure Report. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, lack of controls and record retention, the Department did not ensure timely submission and proper retention of required federal reports. Effect: The Department is out of compliance with federal reporting requirements and amounts reported to federal agencies may be inaccurate. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – AL#s 93.600 and 21.027, see finding 2021-009. No – AL# 93.441. Recommendation: The Department should improve the controls over the reporting function, which includes the documentation, review, and approval of all required reports, and effective controls over the preparation of reports, as well as a monitoring function to ensure that controls are in place and operating effectively for report submission and retention. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under 45 CFR Part 1303 Subpart E and Compliance Supplement, grantees using Head Start funds for facilities activities—such as the purchase, construction, major renovation, or disposition of property—are required to: • Submit Standard Form SF-429 (cover sheet) and Attachments B (Request to Acquire, Improve or Furnish) or C (Disposition or Encumbrance Request), as applicable. • Obtain prior written approval from the Administration for Children and Families (ACF) for applicable real property actions (e.g., purchase, construct, renovate, principal and interest on approved loans, purpose other than what was approved in application). • Record a Notice of Federal Interest in the official real property records and, for modular units, physically post notices on the unit. Condition/Context: The Department was unable to provide documentation demonstrating that required SF-429 forms were submitted in connection with facilities-related activities. In addition, no documentation of ACF approval, Notice of Federal Interest, or disposition forms was available to support compliance with facilities reporting and property management requirements. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: The Department did not have an effective control system in place to ensure compliance with real property and facilities reporting requirements under the Head Start program. Effect: Failure to document and submit required facilities reports, including SF-429 and related notices, places the federal interest in real property at risk. The Department is not following the grant guidelines and is operating the grant out of compliance. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-010. Recommendation: We recommend the Head Start program emphasizes all documentation is obtained, properly completed, and retained so it can be easily accessed and presented to ensure full compliance with Head Start facilities requirements. The necessary resources should be allocated to develop, implement, and monitor policies and procedures to achieve its objectives related to operations, reporting, and compliance. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The cost principles in 2 CFR part 200, subpart E (Cost Principles), prescribe the cost accounting requirements associated with the administration of Federal awards by: a. States, local governments, and Indian tribes b. Institutions of higher education (IHEs) c. Nonprofit organizations Except where otherwise authorized by statute, cost must meet the following general criteria in order to be allowable under Federal awards; 4. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. 7. Be adequately documented. AL #21.027 Recipients may use Fund payments for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021 (codified as 42 U.S.C. § 802 and 42 U.S.C. § 803 respectively), Treasury’s Interim Final Rule and Final Rule at 31 CFR §§ 35.7 and 35.8, and FAQs at (https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf). Condition/Context: During testing, the following was noted: AL #93.441 • 18 of 52 payroll samples did not have payrate support provided. • 2 of 52 payroll samples did not have a timesheet provided. • 8 of 52 payroll samples were missing a required signature on the payrate support provided. AL #93.600 • 1 of 4 Individually Important Items (IIIs) had no journal entry approval and no additional payroll support provided for testing. • 6 of 53 payroll samples had no support provided. • 47 of 53 payroll samples had no payrate support and timesheets provided. AL #21.027 • 1 of 1 IIIs had no documentation provided and the journal entry was not reviewed or approved prior to posting. • 11 of 60 samples did not have a check or enrollment information provided to support the Tribal member economic assistance payments. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: There were not sufficient controls implemented to appropriately ensure that disbursements are properly reviewed, supported, and approved prior to processing. A lack of centralized documentation, inconsistent procedures, and limited oversight contributed to the deficiencies noted. Effect: Disbursement transactions are being processed without proper documentation, which increases the risk of unallowable or unsupported costs being charged to federal programs. Questioned Costs: AL #93.441 – Known – $10,804 AL #93.600 – Known – $44,001 AL #21.027 – Known – $586,462 Repeat Finding: Yes – 2021-011. Recommendation: We recommend the Department update its policies to mention the retention aspect of disbursement processing and follow their written policies. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Indian Health Services, 42 CFR 136.61, requires the Department to bill third-party insurance for services provided and use the income for health care or health care related activities. Condition/Context: The Department was unable to provide support for program income to ensure they were spending third-party funds on allowable costs for the following: • 13 of 13 Individually Important Items (IIIs) did not have support provided. • 19 of 19 non-payroll samples did not have support provided. • 41 of 41 payroll samples did not have timesheets or PAN's provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: The Department did not implement adequate internal controls to track, review, and retain documentation for expenditures funded with program income. Effect: Without documentation we were unable to determine whether program income is being used for allowable activities. Additionally, lack of sufficient documentation may cause the funding agency to question costs. Questioned Costs: Known - $525,194 Repeat Finding: Yes – 2021-012. Recommendation: We recommend the Department continue to strengthen and reinforce its internal control policies and procedures and to ensure that monthly accounting reconciliations are performed and reviewed timely to produce accurate financial data related to third-party income and related expenses. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Tribe's procurement policies and procedures require at least three price quotations for purchases over $10,000. Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition/Context: During testing, the following was noted: Procurement: • 2 of 2 samples selected for testing did not have documentation that bids/quotes were obtained. Suspension and Debarment: • 2 of 2 samples selected for testing did not have documentation that suspension and debarment checks were performed. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: The Department has not implemented sufficient internal controls or documentation procedures to ensure compliance with federal procurement and suspension/debarment requirements. This could be due to lack of oversight and turnover. Effect: The Department could be subject to questioned costs or other sanctions from funding agencies if they determine that programs did not assure full and open competition for the procurements or that suspension and debarment searches are not occurring. Questioned Costs: Procurement: Known - $130,995. Suspension and Debarment: Not applicable due to no vendors in the sampling being identified as being suspended or debarred. Repeat Finding: Yes – 2021-013. Recommendation: Established procurement and suspension and debarment policies and procedures should be enforced requiring bid documentation and suspension and debarment documentation be retained. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Federal regulations require that grantees verify eligibility before providing services and maintain records documenting such eligibility. Condition/Context: The Department was unable to provide a listing of participants who received services during the year. Therefore, we were unable to select a sample or perform eligibility testing to determine whether services were provided only to eligible individuals in accordance with program regulations. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Lack of oversight, record retention, and the inability to locate information for prior years due to turnover. Effect: Failure to maintain eligibility documentation and participant listings creates a risk that services may be provided to ineligible individuals. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-014. Recommendation: All programs with eligibility requirements should reexamine processes and controls over participant eligibility to ensure all documentation is obtained and retained for all participants, regardless of whether the program staff are familiar with the program participant or not. We recommend management emphasizes all documentation is obtained, properly completed, and retained so they can be easily accessed and presented. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.