Audit 390502

Federal Agency: US Department of Agriculture and US Department of Interior Federal Program Name: Abandoned Mine Land Reclamation Program Cooperative Forestry Assistance Program Assistance Listing Number: 15.252, 10.664 Federal Award Identification Number and Year: SF21AR10064-08, 2022 23-DG-11030000-005, 2023 Award Period: 7/1/2021-6/30/2025 5/8/2023-12/31/2026 Type of Finding:  Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per 2 CFR §200.430 Compensation-Personal Services, charges to Federal awards for salaries and wages must be based on records that comply with the established accounting policies and procedures of the non-Federal entity; be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; and reasonably reflect the total activity for which the employee is compensated by the non_x0002_Federal entity. Condition: During single audit testwork over payroll, the following issues were noted which are detailed by ALN: ALN 15.252  During our single audit testing over payroll, we identified 1 out of 16 employees tested in which the employee wages charged to the grant did not reflect the hours worked on the grant. This error totaled approximately $1,238.60. ALN 10.664:  For 1 out of 11 samples tested, the Department incorrectly calculated gross wages, resulting in an overpayment of $98.81 related to overtime hazard pay. Questioned costs: $1,337.41 Context: This was identified as we tested payroll. The sample described above were statistically valid samples. Cause: The Department did not maintain internal controls sufficient to reasonably ensure compliance with applicable Federal laws, regulations, program requirements, and internal policies. During the year, the program requested a reclassification of certain payroll expenditures to the general fund; however, the entry was not processed, resulting in noncompliance. Effect: Noncompliance with applicable regulations and Department policy, possible overcharges to the Federal grants. Recommendation: We recommend that the Department conduct a review of personnel costs charged to the grant to verify that only positions listed in the Administrative Staff Allocation section of the grant budget narrative have been appropriately charged. For any costs that may be questioned, we further recommend that the Department engage with the federal awarding agency to determine the appropriate resolution.

Federal Agency: US Department of Agriculture Federal Program Name: Infrastructure Investment and Jobs Act Community Wildfire Defense Grants Cooperative Forestry Assistance Assistance Listing Number: 10.720, 10.664 Federal Award Identification Number, Year and Award Period: ALN 10.720: 23DG11030000019: 7/1/2023 – 12/31/2028 23DG11030000057: 7/1/2023 – 12/31/2026 24DG11030000035: 8/1/2024 – 6/30/2029 ALN 10.664: 20DG11030000007: 7/1/2020 – 12/31/2025 21DG11030000013: 7/1/2021 – 12/31/2025 22DG11030000007: 7/1/2022 – 12/31/2025 23DG11030000008: 7/1/2023 – 12/31/2026 24DG11030000023: 7/1/2024 – 12/31/2027 Type of Finding:  Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per 2 CFR §200.332 Requirements for pass-through entities, a non-federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass_x0002_through entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity. Additionally, §200.332 includes required elements that are to be included in the subawards for pass-through entities. Condition: During single audit testwork over subrecipient monitoring, the following issues were noted which are detailed by ALN: ALN 10.720:  5 out of 5 subrecipient samples tested did not have adequate subaward agreements that include the points listed in 2 CFR §200.332 Requirements for pass-through entities.  5 out of 5 subrecipient samples tested listed the incorrect assistance listing number on either the subaward, notice to proceed, or both. ALN 10.664:  9 of 9 subrecipient samples tested did not have adequate subaward agreements that include the points listed in 2 CFR §200.332 Requirements for pass-through entities.  3 of 9 subrecipient samples tested listed the incorrect assistance listing number on either the subaward, notice to proceed, or both.  1 of 9 subrecipient samples were not initially identified as subrecipients for the program due to mapping issues. As result, the Department did not perform any monitoring related to the subrecipient. Questioned costs: None Context: This was identified during Subrecipient Monitoring Testing. The samples described above were statistically valid samples. Cause: The Department has not maintained internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effect: Noncompliance with portions of the applicable regulations. Programmatic monitoring was being performed for the ALNs. Recommendation: We recommend the Department create an agreement template that contains the required elements of a subaward to distribute to its subrecipients. We recommend that the Department conduct training with program staff on required elements of subawards and proper mapping of subrecipients within SHARE.

Federal Agency: US Department of Agriculture Federal Program Name: Infrastructure Investment and Jobs Act Community Wildfire Defense Grants Assistance Listing Number: 10.720 Federal Award Identification Number, Year and Award Period: 23DG11030000019: 7/1/2023 – 12/31/2028 Type of Finding:  Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). For subaward information, report no later than the end of the month following the month in which the obligation was made. Additionally, according to 2 CFR 170, Appendix A, the recipient must also report a subaward if a modification increases the Federal funding to an amount that equals or exceeds $30,000. All reported subawards should reflect the total amount of the subaward. Condition: During our single audit testing over reported, we noted 1 of 2 grant awards tested had a modification for an amount that exceeded $30,000 and the Department did not report the subaward modification to the FFATA Subaward Reporting System (FSRS). Questioned costs: None Context: This was identified during reporting testing. The samples described above were statistically valid samples. Cause: The Department lacks established internal controls and procedures over FFATA subaward management to ensure reports are submitted timely and complete. Effect: The Department is in violation of federal regulations. Recommendation: We recommend the Department review the instructions for completion of the FFATA reports with training provided to the program staff who are preparing and reviewing the FFATA reports to ensure submitted reports are timely and complete. We recommend the Department implement effective processes and procedures to maintain the submitted reports and the documentation used to prepare the reports in the files of the Department.