Audit 392418

Criteria: Nonfederal entities in receipt of federal funds must comply with the requirements of 2 CFR200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. This includes properly identifying all federal awards subject to the Uniform Guidance and fairly presenting the required information in the schedule of expenditures of federal awards (SEFA). Condition: The SEFA for the year ended June 30, 2024 was not prepared in a timely manner. Cause: The District's internal controls did not properly identify the federal funding to be reported on the SEFA. Effect: The Schedule of Expenditures of Federal Awards of was not prepared in a timely manner which resulted in an untimely audit of compliance with the types of compliance requirements described in the OMB Compliance Supplement in accordance with the Uniform Guidance. Recommendation: Management should implement effective controls to identify federal grant moneys and ensure timely reporting. Views of Responsible Officials: Management agrees with the finding.

Criteria: Under Uniform Guidance, costs charged to federal awards must be incurred within the award's period of performance and supported by documentation evidencing the date(s) incurred. For Single Audits, Requirement H - Period of Performance applies to ALN 97.036 and is addressed in the OMB Compliance Supplement (Part 3) and the agency's program guidance in Part 4. Condition: For 1 of 25 expenditure items tested during the first two weeks of the period, the auditee could not provide a timecard or system time entry for a daily time charge for one employee to evidence the date the cost was incurred. As a result, we could not determine whether the cost was incurred within the program's period of performance. Cause: Controls over timekeeping documentation retention and retrieval did not ensure that supporting records for all days charged to the program were available for audit. Effect: The auditee could not substantiate that the payroll cost for one employee for 1/6/2023 was incurred within the period of performance, resulting in noncompliance with Requirement H and an unsupported cost for that day. This also gives rise to an internal control deficiency over compliance. Context:  Population: $1,818,122 total expenditures  Sample tested: $67,720 (25 items)  Exceptions: 1  Sample was not statistically valid Known Questioned Costs: $554.18 (22 hours × $25.19/hour) for the unsupported 1/6/2023 payroll charge. Recommendation: Implement and document a timekeeping record‑retention control that:  Reconciles payroll charges to system time entries for each day prior to reimbursement;  Flags missing daily time records for corrective action before costs are submitted; and  Requires a secondary review to verify documentation supports the period of performance for each charge. Views of Responsible Officials: Management agrees with the finding.

Criteria: Under the OMB Compliance Supplement Matrix, Requirement N - Special Tests & Provisions applies to ALN 97.036. Entities must maintain records that accurately track disaster-related expenditures in appropriate accounts to ensure proper reporting, transparency, and auditability. Tracking expenditures in the designated GL account is part of the auditee's internal control system for FEMA Public Assistance documentation. Condition: For 2 of 25 items tested (8%), disaster‑related expenditures were not recorded in the designated general ledger (GL) account used to track FEMA Public Assistance costs. Instead, they were recorded in other GL accounts. Cause: Expenditures were miscoded to incorrect GL accounts due to breakdowns in account‑coding controls during processing. Effect: Disaster‑related expenditures may not be fully or accurately captured in the account used for grant tracking, reducing the effectiveness of internal controls supporting reporting, project reconciliation, and documentation completeness. The financial impact is unknown, but the condition increases the risk of incomplete tracking of project expenditures. Context:  Population: 1,443 expenditures  Sample: 25  Exceptions: 2 (8%)  Sample was not statistically valid Questioned Costs: None. Recommendation: We recommend management:  Strengthen GL coding controls for disaster‑related activity  Implement a secondary review over expenditure coding  Periodically reconcile disaster expenditures across all GL accounts to ensure completeness and proper classification in the FEMA‑designated tracking account Views of Responsible Officials: Management agrees with the finding.