Finding 2023-003 – Late Filing – Significant Deficiency and Noncompliance Federal Program: All Federal Agency: All Award Number: All ALN Number: All Federal Award Year: N/A Compliance Requirement: Reporting Criteria: The Office of Management and Budget (OMB) Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), requires the Commission to submit its Single Audit Reporting Package to the federal audit clearinghouse no later than nine months after fiscal year end. Condition: The federal reporting deadline for the Commission’s Single Audit Reporting Package was June 30, 2024; however, the Commission did not issue its Single Audit Reporting Package until March 6, 2026. Cause: Reporting issues arose from the limitations of the grant management software, which was replaced during the fiscal year. Effect: The late submission affects all federal programs the Commission administered. Repeat Finding: This is a repeat finding. Questioned Costs: None noted. Recommendation: The Commission should strive to submit their Single Audit Reporting Package to the Federal Audit Clearinghouse no later than nine months after fiscal year end. View of Responsible Officials: See Corrective Action Plan at the end of the report.
Finding 2023-004 – Subrecipient Monitoring– Material Weakness and Noncompliance Federal Program: Aging Cluster Federal Agency: U.S. Department of Health and Human Services ALN: 93.044, 93.045, 93.053 (Aging Cluster) Federal Award Number: 2301ALOASS, 2101ALSSC6, 2301ALOACM/2301ALOAHD, 2101ALCMC6/2101ALHDC6 Compliance Requirement: Subrecipient Monitoring Criteria: 2 CFR 200.332 provides various requirements for subrecipient monitoring including the following: • 2 CFR 200.332(d) requires pass-through entities to “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”. • 2 CFR 200.332(f) requires pass-through entities to “verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition: Warren Averett tested eight subrecipients in the Aging Cluster and noted that two were not monitored adequately during the award period and the Commission did not obtain single audit reports for any of the subrecipients tested. Cause: Although the Commission performed certain procedures required by 2 CFR 200.332, the policies and procedures do not contain adequate guidance to fully address the requirements. Effect: The lack of adequate policies and procedures can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements which could ultimately lead to disallowed costs for the major federal program. Repeat Finding: This is a repeat finding. Questioned Costs: None noted. Recommendation: Warren Averett recommends that the Commission strengthen its documented policies and procedures regarding subrecipient monitoring. View of Responsible Officials: See Corrective Action Plan at the end of the report.
Finding 2023-005 – SEFA Preparation – Material Weakness and Noncompliance Federal Program: Aging Cluster Federal Agency: U.S. Department of Health and Human Services ALN: 93.044, 93.045, 93.053 (Aging Cluster) Federal Award Number: 2301ALOASS, 2101ALSSC6, 2301ALOACM/2301ALOAHD, 2101ALCMC6/2101ALHDC6 Compliance Requirement: Reporting Criteria: 2 CFR 200.510(b) requires nonfederal entities to prepare a Schedule of Expenditures of Federal Awards (SEFA) that accurately reflects total federal expenditures for each federal program for the fiscal year. In addition, entities are required to maintain effective internal control over financial reporting and compliance to ensure that federal program expenditures are properly recorded, accumulated, and reported in accordance with federal requirements. Condition: During matching testing of the Aging Cluster, we identified errors in the preparation of the SEFA. Specifically, the expenditures reported on the initial SEFA for the Aging Cluster did not agree to the amounts reported on supporting reports submitted to the federal awarding agency for 4 out of the 8 reports selected for testing. The initial SEFA understated federal expenditures by approximately $502,000. Management indicated that the discrepancy resulted from errors in recording meals certificate revenue and complications arising from changes in accounting software during the fiscal year. The SEFA was subsequently corrected during the audit. Cause: Internal controls were not adequately designed or implemented to ensure that meals certificate revenue was properly recorded and that data migrated from the old accounting system into the new accounting system was complete and accurate for SEFA reporting purposes. Effect: This misstatement increased the risk that federal expenditures were not reported in accordance with Uniform Guidance. Repeat Finding: This is not a repeat finding. Questioned Costs: None noted. Recommendation: Warren Averett recommends that the Commission strengthen its documented policies and procedures regarding the recording and reporting of federal expenditures, particularly related to meals certificate revenue. This should include establishing formal reconciliation procedures between the trial balance, SEFA, and reports submitted to federal awarding agencies. View of Responsible Officials: See Corrective Action Plan at the end of the report.