2025 – 003. Period of Performance Federal Agency: Department of Homeland Security Federal Program Title: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing: 97.036 Federal Grant ID Number: 4286-DR-SC Pass-Through Entity: Not applicable Award Period: October 11, 2016 through April 10, 2017 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires that all costs, excluding administrative costs, be incurred during the approved budget period. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Expenditures were incurred and charged to the grant after the authorized period of performance. Cause: Office controls failed to prevent costs incurred outside the applicable period of performance from being charged to the grant. Effect: Costs charged outside the period of performance may be unallowable. Questioned Costs: Questioned costs totaled $2,231 for expenditures improperly charged to the federal award in noncompliance of period of performance requirements. Context: One of thirty-four transactions selected for testing costs for which the obligation had not been paid as of the end of period of performance was incurred after the period of performance ended, totaling $2,231. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office strengthen its internal controls to ensure that expenditures charged to federal grants are incurred within the applicable period of performance. Views of responsible officials and planned corrective actions: See management’s response on page 181.
2025 – 004. Reporting Federal Agency: Department of Homeland Security Federal Program Title: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing: 97.036 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: FFATA reporting and timing errors were identified. Cause: Date entry errors and lack of retaining submitted reports led to the compliance errors identified during testing. Effect: The Office was not in compliance with FFATA reporting requirements. Questioned Costs: None, as this finding relates to reporting requirements, rather than unallowable expenditures. Context: Twelve subawards were selected for testing and the following compliance errors were identified during the testing: • For one of the subawards tested, incorrect information was reported in the FSRS regarding the subaward obligated amount. • For six of the subawards tested, the Office could not provide documentation of the original submission date in order to test the reports for timely submission. This is a repeat finding from the fiscal year 2024 Single Audit. The Office stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2025, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2024-003 Recommendation: We recommend that the Office update their current internal controls to include continuous monitoring and reviewing of project obligations and retaining all submitted FFATA reports. Views of responsible officials and planned corrective actions: See management’s response on page 182.
2025 – 005. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listings: 12.401 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.430 states that (a) Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the recipient or subrecipient consistently applied to both federal and non-federal activities; (2) Follows an appointment made in accordance with recipient’s or subrecipient’s laws, rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (g) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Personnel expenditures were charged to the federal award without documented approval as required by the Office’s internal control procedure. Cause: The Office did not document all required approvals of payroll changes for grant employees. Effect: Personnel costs could be incorrectly charged to the federal award. Questioned Costs: Questioned costs are undetermined because this finding relates to missing approvals, rather than a specifically identifiable unallowable amount. Context: Two out of sixty employees tested were missing one or more of the required management approvals on their State Personnel Action Form applicable to the pay received in the selected period. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office strengthen its efforts to consistently adhere to its procedures, including maintaining the approved State Personnel Action Form to support the personnel charges and allocations to applicable funding sources. Views of responsible officials and planned corrective actions: See management’s response on page 182.
2025 – 006. Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Matching Federal Agencies: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: W912QG-24-2-1001 Pass-Through Entity: Not applicable Award Period: October 1, 2023 through September 30, 2026 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 75.403 outlines factors affecting allowability of cost, including that costs should not be used to meet cost sharing or matching requirements of federally-financed programs. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Costs were improperly charged to the federal award. Cause: The Office’s controls failed to ensure that all costs were allowable and properly allocated. Effect: Improper allocation of costs resulted in the federal award being overcharged. Questioned Costs: Questioned costs totaled $1,969 for expenditures improperly allocated to the federal award in noncompliance of matching requirements. Context: For one out of sixty non-payroll transactions tested, the costs were not properly allocated in accordance with the federal award matching requirements. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office review and update its procedures to ensure proper allocation of costs according to matching requirements. Views of responsible officials and planned corrective actions: See management’s response on page 183.
2025 – 007. Cash Management Federal Agencies: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: NGR 5-1-11-5 (5) requires the grantee to minimize the time elapsing between the transfer of funds from the United States Treasury and their disbursement by the State. (no more than 45 days) 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Federal funds were received and held for more than 45 days before being paid out for allowable program expenditures, resulting in federal cash on hand in excess of immediate cash needs. Cause: Drawdowns were based on estimated expenditures of total contract amounts rather than actual or near-term payment activity. Effect: The Office did not comply with the awarding federal agency cash management requirements, increasing the risk of excess federal funds or interest liability. Questioned Costs: None, as this finding relates to the timing of federal cash drawdowns and the holding of funds in excess of 45 days needs, rather than unallowable expenditures. Context: One out of thirty-nine cash disbursements tested indicated that the Office retained a material amount of federal funds in excess of 45 days after the covered period identified on the cash advancement request. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office strengthen its cash management controls by aligning federal drawdowns with actual or near-term disbursement activity. Views of responsible officials and planned corrective actions: See management’s response on page 183. Auditor’s Conclusion: In response to the Office’s corrective action plan, GCAPL #20-02 references back to NGR 5-1 for applicable guidance including the 45 day requirement. Additionally, our testing methodology was performed in accordance with the OMB Compliance Supplement, which requires auditors to assess whether individual cash drawdowns align with immediate cash needs. We also did not identify documentation indicating that the federal awarding agency granted a waiver from federal cash management requirements for capital projects. Therefore, based on our review, the Office did not fully comply with federal cash management requirements.
2025 – 008. Period of Performance Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires that all costs, excluding administrative costs, be incurred during the approved budget period. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Expenditures were incurred and charged to the grant both before and after the authorized period of performance. Cause: Office controls failed to prevent costs incurred outside the applicable period of performance from being charged to the grant. Effect: Costs charged outside the period of performance may be unallowable. Questioned Costs: Questioned costs totaled $33,061 for expenditures incurred outside the authorized period of performance. Context: Two of twenty transactions selected for testing costs recorded during the first period of the grant were for costs incurred prior to the applicable period of performance, totaling $30,490. One of five transactions selected for testing costs for which the obligation had not been paid as of the end of period of performance was incurred after the period of performance ended, totaling $2,571. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office strengthen its internal controls to ensure that expenditures charged to federal grants are incurred within the applicable period of performance. Views of responsible officials and planned corrective actions: See management’s response on page 184.
2025 – 009. Matching Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.306 requires that matching contributions be allowable, properly allocated, and used in accordance with the terms and conditions of the federal award. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Office did not apply required matching contributions to federal expenditures by the applicable expenditure categories as required by the federal award. Cause: Office controls failed to ensure that matching costs were tracked and applied to federal expenditures at the expenditure-category level. Effect: Matching requirements were not met in accordance with federal regulations and award terms, and federal expenditures were not consistently supported by properly applied matching contributions. Questioned Costs: Questioned costs are undetermined because matching compliance was evaluated in total by category across multiple transactions, and the specific unsupported portion could not be reasonably isolated. Context: For all three grants that closed during the fiscal year, federal expenditures were not matched to the required amounts by expenditure category; testing identified one grant where the required match total was not met, one grant where the matching total was met, but was misapplied to multiple expenditure categories, and one grant where the required match total was not met and the requirement was misapplied to multiple expenditure categories. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office strengthen controls to ensure matching contributions are properly tracked, documented, and applied to federal expenditures as required by the federal award. Views of responsible officials and planned corrective actions: See management’s response on page 184.
2025 – 010. Special Tests and Provisions (Provider Eligibility) Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing: 93.775, 93.777, and 93.778 Federal Grant ID Number: 05-2405-SC-5MAP and 05-2505-SC-5MAP Pass-Through Entity: Not Applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR § 455.412 (b), the State Medicaid agency must confirm that the provider's license has not expired and that there are no current limitations on the provider's license. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department’s monitoring process and provider eligibility system did not ensure that the provider's license was not expired or had imposed limitations. Cause: The Department did not revoke or subsequently update the Medicaid Management Information System and licensure and certification information for providers with expired or imposed licenses when updates were made within the enrollment process, nor did the Department complete the close out process to remove providers from the list of eligible providers. Effect: We were unable to verify that the State ensured providers met the prescribed health and safety standards and providers who were no longer qualified providers remained eligible to receive payment. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: We tested sixty eligible providers to ensure that the provider’s license was unexpired or have imposed limitations. We determined the Department did not confirm that the provider's license was not expired or limited for five providers. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure that providers do not have expired or imposed limitations on their licenses and that providers who have expired and imposed limitations on licenses have their enrollment terminated. Views of responsible officials and planned corrective actions: See management’s response on page 185.
2025 – 011. Special Tests and Provisions (Provider Eligibility) Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing: 93.775, 93.777, and 93.778 Federal Grant ID Number: 05-2405-SC-5MAP and 05-2505-SC-5MAP Pass-Through Entity: Not Applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR § 455.414, The State Medicaid agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Per 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department did not confirm that the provider's enrollment was revalidated at least every five years. Cause: Through the Department’s enrollment requests and updates process the Department did not detect to ensure that providers’ enrollments are being revalidated at least every five years. Effect: Providers who no longer meet the revalidation requirements remain eligible and receive payment. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: We tested sixty eligible providers to ensure the Department confirmed that the provider’s enrollment was revalidated at least every five years. We determined the Department did not confirm that the providers enrollment was revalidated at least every five years for one provider. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure that provider enrollment is being revalidated at least every five years in accordance with 42 CFR § 455.414. Views of responsible officials and planned corrective actions: See management’s response on page 186.
2025 – 012. Special Tests and Provisions (Provider Health and Safety Standards) Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing: 93.775, 93.777, and 93.778 Federal Grant ID Number: 05-2405-SC-5MAP and 05-2505-SC-5MAP Pass-Through Entity: Not Applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Per Section 4 of the South Carolina Department of Health and Human Services State Plan (h) the State assures that each facility shall have a standard survey which includes (for a case-mix stratified sample of residents) a survey of the quality of care furnished, as measured by indicators of medical, nursing and rehabilitative care, dietary and nutritional services, activities and social participation, and sanitation, infection control, and the physical environment, written plans of care and audit of resident’s assessments, and a review of compliance with resident’s rights not later than 15 months after the date of the previous standard survey. Additionally, Section 4 (i) states that the State assures that the Statewide average interval between standard surveys of nursing facilities does not exceed 12 months. Condition: The Department was unable to provide documentation to verify that annual health and safety surveys were performed during the fiscal year. Cause: The Department did not maintain a record of completed annual health and safety surveys. Effect: We were unable to verify that the State ensured providers met the prescribed health and safety standards. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: The Department could not provide annual health and safety surveys in accordance with the State Plan. Therefore, we were unable to perform audit procedures. Prior Year Single Audit Finding Number: 2024-006 Recommendation: We recommend that the Department ensure that provider health and safety surveys are conducted in accordance with the State Plan and documentation is adequately maintained and monitored. Views of responsible officials and planned corrective actions: See management’s response on page 186.
2025 – 013. Special Tests and Provisions (Managed Care Financial Audit) Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing: 93.775, 93.777, and 93.778 Federal Grant ID Number: 05-2405-SC-5MAP and 05-2505-SC-5MAP Pass-Through Entity: Not Applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 2 CFR § 438.602 (e), The State must periodically, but no less frequently than once every three years, conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO, PIHP or PAHP. Per 2 CFR § 438.602 (g), The State must post on its Web site, as required in § 438.10(c)(3), the following documents and reports: (1) The MCO, PIHP, PAHP, or PCCM entity contract; (2) The data at § 438.604(a)(5); (3) The name and title of individuals included in § 438.604(a)(6); (4) The results of any audits under paragraph (e) of this section; (5) Enrollee handbooks, provider directories, and formularies required at § 438.10(g) through (i); (6) The information on rate ranges required at § 438.4(c)(2)(iv), if applicable; (7) The reports required at §§ 438.66(e) and 438.207(d); (8) The network adequacy standards required at § 438.68(b)(1) through (2) and (e); (9) The results of secret shopper surveys required at § 438.68(f); (10) State directed payment evaluation reports required in § 438.6(c)(2)(v)(C); (11) Information on all required Application Programming Interfaces including as specified in § 431.60(d) and (f); (12) Quality related information as required in §§ 438.332(c)(1), 438.340(d), 438.362(c) and 438.364(c)(2)(i); (13) Documentation of compliance with requirements in subpart K—Parity in Mental Health and Substance Use Disorder Benefits. Per 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department has not completed or maintained a record of the completed periodic audits of the five contracted Managed Care Organizations (MCOs) within the most recent three-year period nor did they post the information on their website. Cause: The Department did not ensure that the MCOs were receiving periodic audits or that the information was posted on the Department's website. Effect: We are unable to determine the accuracy, truthfulness, and completeness of the financial data submitted by each MCO. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: The Department did not complete any periodic audits in the most recent three-year period or post the required information to the Department's website. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department ensure that MCOs are fulfilling the requirement of receiving periodic audits within the most recent three-year period as well as posting the required information to their website in accordance with 2 CFR § 438.602 (e) and (g). Views of responsible officials and planned corrective actions: See management’s response on page 187.
2025 – 014. Reporting Federal Agency: Department of Health and Human Agencies Federal Program Title: Aging Cluster Assistance Listing: 93.044, 93.045, and 93.053 Federal Grant ID Number: None Pass-Through Entity: Not applicable Award Period: July 1, 2023, through June 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the recipient or subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies were identified in the reported amounts on SF-425 reports. Cause: Department’s review of semi-annual SF-425 reports submitted during fiscal year 2025 failed to detect discrepancies in reported amounts. Effect: Without proper supervisory review, there is an increased risk of inaccurate reporting. Questioned Costs: None, as this finding relates to reporting requirements, rather than unallowable expenditures. Context: In all seven of the SF-425 reports tested, reporting discrepancies in financial data were identified related to federal share of expenditures, and recipient share of expenditures. Additionally, in all seven of the SF-425 reports tested, they lacked sufficient support of proper review and approval prior to submission. This is a repeat finding from the fiscal year 2024 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2025, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2024-008 Recommendation: We recommend the Department strengthen procedures to ensure an adequate review is completed prior to report submission and records are maintained of adjustments made within the period. Views of responsible officials and planned corrective actions: See management’s response on page 189.
2025 – 015. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of Transportation Federal Program Title: Highway Safety Cluster Assistance Listing: 20.600 and 20.616 Federal Grant ID Number: M5TR-2024-HS-26-24 Pass-Through Entity: Not applicable Award Period: October 1, 2023, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the recipient or subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Academy failed to provide documentation to prove the existence of an internal control. Cause: There was an absence of documented evidence to support the internal control process. Effect: Without adequate controls in place, unallowable expenditures may be charged to the grant. Questioned Costs: None, as this finding relates to missing approvals, rather than a specifically identifiable unallowable amount. Context: For one of ten transactions tested, no documentation was available to prove the existence of an internal control. This is a repeat finding from the fiscal year 2024 Single Audit. The Departments stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2025, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2024-015 Recommendation: We recommend that the Academy strengthen controls to ensure that documentation is maintained to support that costs charged to the grant were properly reviewed and approved for allowability. Views of responsible officials and planned corrective actions: See management’s response on page 190.
2025 – 016. Period of Performance Federal Agency: Department of Transportation Federal Program Title: Highway Safety Cluster Assistance Listing: 20.600 and 20.616 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: October 1, 2023, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the recipient or subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Academy failed to provide documentation to prove the existence of an internal control. Cause: There was an absence of documented evidence to support the internal control process. Effect: The costs charged outside the period of performance may not be allowable. Questioned Costs: None, as this finding relates to missing approvals, rather than a specifically identifiable unallowable amount. Context: For one of ten expenditures tested, the CFO was unable to provide sufficient documentation of a review and approval. This is a repeat finding from the fiscal year 2024 Single Audit. The Departments stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2025, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2024-016 Recommendation: We recommend that the Academy strengthen controls to ensure that documentation is maintained to support that period of performance requirements are reviewed and approved. Views of responsible officials and planned corrective actions: See management’s response on page 190.
2025 – 017. Activities Allowed or Unallowed & Allowable Costs/Costs Principles Federal Agency: Environmental Protection Agency Federal Program Title: Drinking Water State Revolving Fund Assistance Listing: 66.468 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.430(g)(1)(vi) requires charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department did not accurately calculate time and effort costs associated with the grant. Cause: The Department’s internal control did not ensure that time and effort was allocated appropriately. Effect: The Department could improperly allocate additional labor cost to the grant. Questioned Costs: $678 was the amount overcharged to program after evaluation of time and effort documentation. Context: We tested eleven individuals to ensure time and effort requirements were being properly met. We determined the Department did not properly allocate time and effort for ten of the eleven individuals tested. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommended the Department strengthen its controls to ensure that time and effort is tracked and allocated accurately. Views of responsible officials and planned corrective actions: See management’s response on page 192.
2025 – 018. Cash Management Federal Agency: Environmental Protection Agency Federal Program Title: Drinking Water State Revolving Fund Assistance Listing: 66.468 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Supporting documentation was not adequate to determine if federal reimbursement requests had a separate preparer and reviewer prior to requesting a drawdown request as required by the Department's policies and procedures. Cause: The documentation that was provided was inadequate to support that the employee who completed the drawdown request was a different individual than the employee who reviewed and approved the drawdown request prior to the reimbursement request. Effect: The Department may request improper drawdowns due to a lack of segregation of duties. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: We tested ten drawdowns for set-asides to ensure there were two different signatures approving the draw. We determined the Department did not appropriately approve any of the ten drawdowns. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommended the Department strengthen its controls to ensure proper documentation of supervisory review is maintained and that there is a segregation of duties between the individual completing the drawdown request and the individual approving the drawdown request. Views of responsible officials and planned corrective actions: See management’s response on page 193.
2025 – 019. Cash Management Federal Agency: Environmental Protection Agency Federal Program Title: Drinking Water State Revolving Fund Assistance Listing: 66.468 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 40 CFR § 35.3560(e) a State may draw cash through the Automated Clearing House for the full amount of costs incurred for set-aside expenditures based on Environmental Protection Agency approved workplans. A State may draw cash in advance to ensure funds are available to meet State payroll expenses. However, cash should be drawn no sooner than necessary to meet immediate payroll disbursement needs. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department overdrew federal funds. Cause: The Department's internal control did not ensure that drawdown requests were supported by adequate supporting documentation prior to the reimbursement request. Effect: The Department may request and drawdown inappropriate federal funds. Questioned Costs: None, as this finding relates to the timing of federal cash drawdowns and the holding of funds in excess of 45 days needs, rather than unallowable expenditures. Context: We tested ten drawdowns for set-asides to ensure compliance requirements were being met. We determined the Department overdrew federal funds for one of ten drawdowns for a total of $8,252. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its controls to ensure that policies and procedures are followed to ensure expenditures are incurred prior to submitting drawdown requests. Views of responsible officials and planned corrective actions: See management’s response on page 193.
2025 – 020. Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Payroll and Indirect Costs Federal Agency: Environmental Protection Agency Federal Program Title: Performance Partnership Grants Assistance Listing: 66.605 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR §200.404 states that a cost is reasonable when the charge is consistent with the recipient’s or subrecipient’s established written personnel policies. 2 CFR § 200.430 requires that charges to federal awards for salaries and wages must be supported by accurate time and effort records that reflect the actual work performed. The records must: be supported by a system of internal controls that provides reasonable assurance payroll costs are accurate, allowable, and properly allocated; be incorporated into the recipient’s official accounting records; reasonably reflect the employee’s total compensated activity, not exceeding 100 percent of compensated time; properly allocate payroll costs when employees work on multiple cost objectives, including federal and non-federal activities; comply with the recipient’s established accounting policies and procedures. Charges should not rely solely on budget estimates unless: the estimates reasonably approximate actual work performed; significant changes in work activity are promptly identified and recorded and periodic after-the-fact reviews and adjustments are performed to ensure final charges are accurate, allowable, and properly allocated. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Department did not maintain adequate time and effort documentation to support salaries and wages charged to federal awards. Specifically, payroll charges were not consistently supported by records that accurately reflected actual work performed and/or did not properly document the allocation of time between federal and non-federal activities. Indirect costs are directly correlated to the payroll expenditures thus if the payroll expenditures are inaccurate then the indirect cost will also be inaccurate. Cause: The Department lacked sufficient internal controls and/or written procedures to ensure time and effort was allocated among payroll accurately. Effect: As a result, there is an increased risk that salaries and wages charged to federal awards were inaccurate, unallowable, or improperly allocated, which could result in questioned costs and noncompliance with federal grant requirements. Questioned Costs: $17,445 for payroll testing. The overall variance between hours worked and amounts paid represents the questioned costs for payroll. Unknown for journal entry testing. Indirect costs were allocated based on budgeted personnel amounts rather than actual time and effort recorded in the Personnel Cost Account System (PCAS) and discrepancies were identified during our testing of time and effort requirements. Context: We selected thirty-six individuals to ensure time and effort requirements were properly met. Eleven out of thirty-six employees tested were paid more from the grant funds than they actually worked during the pay period. Twenty-three out of thirty-six employees tested, were paid less from the grant funds than they worked during the pay period. We selected seven indirect cost transactions to ensure time and effort requirements were being met properly. Because the journal entries related to indirect cost were made based on the budget for the grant and not the actual time and effort contributed by the individual employees per the PCAS, we were unable to provide reasonable assurance that time and effort was calculated accurately. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend the Department develop and/or strengthen written policies and procedures for time and effort reporting; Ensure time and effort recordings accurately reflect actual work performed and total compensated activity; Implement supervisory review of time and effort documentation; and perform periodic after-the-fact reviews and adjustments to payroll charges to ensure compliance with federal requirements. Views of responsible officials and planned corrective actions: See management’s response on page 194.
2025 – 021. Cash Management Federal Agency: Environmental Protection Agency Federal Program Title: Performance Partnership Grants Assistance Listing: 66.605 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department provided documentation that does not show a separate preparer and reviewer signature. Cause: The Department lacked sufficient internal controls to ensure that the drawdowns had separate preparers and reviewers. Effect: The Department may request improper drawdowns due to a lack of segregation of duties. Questioned Costs: None: The finding is related to insufficient documentation due to lack of approval signatures and thus we do not question any of the drawdown amounts. Context: We tested six drawdowns to ensure there were two different signatures approving the draw. We determined the Department did not appropriately approve for all six drawdowns. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend that the Department strengthen its controls to ensure that drawdowns are reviewed appropriately. Views of responsible officials and planned corrective actions: See management’s response on page 195.
2025 – 022. Period of Performance Federal Agency: Environmental Protection Agency Federal Program Title: Performance Partnership Grants Assistance Listing: 66.605 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires costs must be incurred during the approved budget period. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department charged costs to a grant after the grant period ended. Cause: The Department lacked sufficient internal controls to ensure all costs to grants occurred during the grant period. Effect: Costs charged outside the period of performance may not be allowable. Questioned Costs: $2,771. The six transactions that occurred outside of the Period of Performance totaled this amount. Context: We tested the one journal entry transaction that occurred during the liquidation period for a grant that ended 9/30/2024. We determined that six of the transactions involved with the journal entry occurred after the grant period ended. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend that the Department strengthen its controls to ensure that costs are incurred within the grant period. Views of responsible officials and planned corrective actions: See management’s response on page 195.
2025 – 023. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agencies: Department of Health and Human Services Federal Program Titles: Adoption Assistance Assistance Listings: 93.659 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: The Department did not document approved payments in the accounting system. Cause: The documentation that was provided was inadequate to support that the subsidy payments were appropriately approved in the accounting system. Effect: The Department could allocate incorrect payments to the grant. Questioned Costs: None, as this finding relates to missing approvals, rather than a specifically identifiable unallowable amount. Context: For four of sixty individual payments tested, the Department did not properly document approval. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend the Department strengthen internal controls to ensure that batch payments are reviewed and approved prior to submission. Views of responsible officials and planned corrective actions: See management’s response on page 196.
2025 – 024. Eligibility Federal Agencies: Department of Health and Human Services Federal Program Titles: Adoption Assistance Assistance Listings: 93.659 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 42 USC § 673(A)(4)(a)(iii) requires a payment may not be made pursuant to this section to parents or relative guardians with respect to a child if the State determines that the child is no longer receiving any support from the parents or relative guardians, as the case may be. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: The Department did not ensure benefits were properly terminated. Cause: The Department's controls did not ensure that the child was still the legal responsibility of the parents. Effect: The Department could continue providing benefits to ineligible individuals. Questioned Costs: $532. We determined that the Department overpaid federal expenditures associated with this area of compliance requirements. Context: We tested sixty individuals to ensure they were eligible for adoption assistance. We determined the Department did not terminate benefits timely for one of the sixty individuals. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend the Department strengthen internal controls to ensure that individuals are removed from the program when deemed ineligible. Views of responsible officials and planned corrective actions: See management’s response on page 196.
2025 – 025. Eligibility Federal Agencies: Department of Health and Human Services Federal Program Titles: Adoption Assistance Assistance Listings: 93.659 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: The Department approved inappropriate eligibility criteria documentation. Cause: The Department reviewed and approved inappropriate documentation that determines program eligibility. Effect: The Department could inappropriately deem individuals eligible. Questioned Costs: None. There were no federal expenditures associated with this area of compliance. Context: We tested sixty individuals against program eligibility requirements. We determined the Department approved inappropriate eligibility determination checklists for three of sixty individuals Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend the Department strengthen its internal control procedures to ensure individuals are deemed eligible using appropriate eligibility criteria. Views of responsible officials and planned corrective actions: See management’s response on page 197.
2025 – 026. Reporting Federal Agencies: Department of Health and Human Services Federal Program Titles: Refugee and Entrant Assistance-State/Replacement Designee Administered Programs Assistance Listings: 93.566 Federal Grant ID Numbers: 2201SCRSSS & 2401SCRSSS Pass-Through Entity: Not applicable Award Period: October 1, 2022 through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition: The Department did not report accurate financial information to the federal reporting agency. Cause: The Department did not fully implement the corrective action associated with this finding from the prior year. Effect: The Department reported inaccurate financial information to the federal reporting agency. Questioned Costs: None. We did not question any costs, the costs were only reported incorrectly. Context: In two of the six SF-425 reports (FFR) tested, the Department failed to report the accurate amount of expenditures either through not matching cash receipts and disbursements, not drawing upon the appropriate information from the general ledger, or failing to provide the general ledger detail to substantiate reported costs. In one of the five ORR-2 reports tested, the Department failed to report the accurate amount of expenses for administrative costs (Refugee Cash Assistance (RCA) and Refugee Medical Assistance (RMA) Administration). This took place because the underlying general ledger had an error that caused RCA and RMA administrative costs to have a credit balance. The Department appeared to make an adjustment to take from overall expenditures to eliminate the credit balances, resulting in a second layer of errors. In two of the six FFATA reports submitted, the report was not submitted by the designated deadline. Prior Year Single Audit Finding Numbers: 2024-019 and 2024-020 Recommendation: We recommend the Department strengthen its internal controls to ensure all reports are accurately prepared and submitted by the appropriate deadline. Views of responsible officials and planned corrective actions: See management’s response on page 197.
2025-027. Subrecipient Monitoring Federal Agencies: Department of Health and Human Services Federal Program Titles: Refugee and Entrant Assistance-State/Replacement Designee Administered Programs Assistance Listings: 93.566 Federal Grant ID Numbers: 2201SCRSSS & 2401SCRSSS Pass-Through Entity: Not applicable Award Period: October 1, 2022 through September 30, 2025 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR § 200.332(c) requires that all pass-through entities evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring. 2 CFR § 200.332(e) requires that all pass-through entities monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. Condition: The Department did not maintain the subrecipient monitoring and did not comply with federal subrecipient monitoring requirements. Cause: The Department has not fully implemented the corrective action associated with this finding from the prior year. Effect: The Department is not in compliance with federal subrecipient monitoring requirements. Questioned Costs: None, as the finding relates to monitoring and not unallowable expenditures. Context: The checklists were not maintained, and the Department could not provide the completed checklist to demonstrate monitoring of any subrecipients during FY 2025. For one subrecipient, the Department did not provide documentation to demonstrate that a verification was performed to confirm the subrecipient was not excluded or disqualified. Additionally, the Department failed to evaluate subrecipients for risks, create a monitoring plan that considered those risks, or sufficiently monitor and address the audit findings of the subrecipient. Prior Year Single Audit Finding Number: 2024-021 Recommendation: We recommend the Department continue its efforts to strengthen their current policies and procedures and to ensure that the subrecipient monitoring checklist is being completed and maintained. Views of responsible officials and planned corrective actions: See management’s response on page 198.
2025 – 028. Eligibility – Refugee Cash Assistance (RCA) Federal Agencies: Department of Health and Human Services Federal Program Titles: Refugee and Entrant Assistance-State/Replacement Designee Administered Programs Assistance Listings: 93.566 Federal Grant ID Numbers: 2201SCRCMA & 2401SCRCMA Pass-Through Entity: Not applicable Award Period: October 1, 2021 through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Standards for Internal Control in the Federal Government (the Green Book) as issued by the Comptroller General of the United States emphasize that "The effectiveness of a detective control activity depends on timeliness" (10.10) and when detective controls are employed "management strengthens and expedites detective control activities and may also expedite monitoring activities to enable the entity to effectively mitigate the risk to acceptable levels" (10.13). Condition: The Department did not maintain controls over eligibility for this program, forms necessary for determining eligibility were not appropriately completed, forms completed were not completed in a timely fashion. Cause: The Department did not develop a control with a 100% implementation target and is utilizing un-auditable stop-gap measures such as live documents to facilitate processing of program participant applications. Effect: The Department’s system can fail to catch errors in each applicant’s application or payments and has resulted in overcharging grants. Questioned Costs: $15,126. Payments to program participants with control findings. Context: The following discrepancies were encountered during our testing of forty-nine case files. • The Department did not have a preventive control to ensure all RCA eligibility criteria were reviewed, as the existing Quality Assurance Checklist was not designated to check all cases or be timely. • In the files of thirty-eight, the Authorization of Refugee Cash Assistance Payment (Form 1325) was not signed until after it had been approved and payments had already been issued, and for six cases, the form was either not dated or had no sign-offs at all. • We noted that applicant reviews and aid amount authorizations for the Refugee Employment Services Registration/Participation Status form and the Notification of Eligibility Determination for Refugee Resettlement Program form (Forms 1324 and 1326, respectively) were completed after applicants had already begun receiving aid, resulting in grant overcharges. • In forty-one cases, the employment service provider did not return Part II of the Form 1324, which, according to the form instructions, must be submitted prior to approval of RCA benefits. • In one case, Form 1326 did not specify the date on which participant payments would end, which is needed to evaluate compliance with the eligibility period. Prior Year Single Audit Finding Number: 2024-018 Recommendation: We recommend the Department continue its efforts to strengthen their current policies and procedures and to ensure that all RCA applicants are reviewed with the quality assurance audit checklist and that all appropriate forms are signed, dated, and reviewed in a timely manner. Views of responsible officials and planned corrective actions: See management’s response on page 198.
2025 – 029. Eligibility – Refugee Medical Assistance (RMA) Federal Agencies: Department of Health and Human Services Federal Program Titles: Refugee and Entrant Assistance-State/Replacement Designee Administered Programs Assistance Listings: 93.566 Federal Grant ID Numbers: 2201SCRCMA & 2401SCRCMA Pass-Through Entity: Not applicable Award Period: October 1, 2021 through September 30, 2025 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 45 CFR § 400.100 requires that recipients of RMA payments are not full-time students in institutions of higher education, as defined by the Director, except where such enrollment is approved by the State, or its designee, as part of an individual employability plan for a refugee under § 400.79 of this part or a plan for an unaccompanied minor in accordance with § 400.112. 45 CFR § 400.100 also requires that the RMA eligibility only applies during a period of time to be determined by the Director in accordance with § 400.112. Condition: The South Carolina Department of Health and Human Services (SCDHHS), a partnering state agency contracted by the Department to perform eligibility determinations, did not remove higher education students from the RMA system or terminate benefits after the one-year eligibility period expired. Cause: SCDHHS did not collect the information noted and the Department lacked sufficient oversight of SCDHHS’s eligibility determinations and removal of ineligible participants. Effect: Overcharging federal grants can occur through either payments past their eligible period or payments to individuals who never were eligible. Questioned Costs: $1,923 based upon the total amount of ineligible payments identified in testing. It is known that these participants received additional amounts inappropriately in other months and periods but the scope of these could not be determined. Context: Out of the eleven cases selected for testing, we noted the following: • One individual was a child eligible for another federal funded cash assistance program but was assigned to RMA. • There is no current process to identify and disallow applicants enrolled in higher education. • Four program participants were given assistance beyond the twelve-month eligibility period. Prior Year Single Audit Finding Number: 2024-018 Recommendation: We recommend the Department ensure that partnering Departments are checking for the appropriate information to exclude ineligible program participants and to take participants off the program when their eligible period has ended. Views of responsible officials and planned corrective actions: See management’s response on page 199.
2025 – 030. Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agencies: Department of Health and Human Services Federal Program Titles: Refugee and Entrant Assistance-State/Replacement Designee Administered Programs Assistance Listings: 93.566 Federal Grant ID Numbers: 2201SCRCMA, 2401SCRCMA, 2201SCRSSS & 2401SCRSSS Pass-Through Entity: Not applicable Award Period: October 1, 2021 through September 30, 2025 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Expenditures charged to the program were not adequately supported or were inappropriate. Cause: The Department did not maintain appropriate review and approval controls over program participant payments to RCA and RMA participants nor over invoice payments to subrecipients. Effect: The federal grants were overcharged through payments for unallowable costs or reimbursing ineligible program participants. Questioned Costs: $876,636. Payments for insufficiently reviewed invoices or to ineligible program participants Context: We identified several payments made to subrecipients that the Department did not review nor did the Department retain documentation at the appropriate level of detail to support the allowability of the costs. We noted that the Department did not have the details on RMA program participants (determined and paid via the South Carolina Department of Health and Human Services) sufficient to verify that the payments were allowable. Multiple ineligible payments were made (see finding 2025-029). Prior Year Single Audit Finding Number: 2024-017 Recommendation: We recommend that the Department ensure appropriate controls over subrecipient payments and payments to program participants. Views of responsible officials and planned corrective actions: See management’s response on page 200.
2025 – 031. Period of Performance Federal Agency: Department of Health and Human Services Federal Program Title: CCDF Cluster Assistance Listing: 93.575, 93.596, and 93.489 Federal Grant ID Number: 2201SCCCDD Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 98.60(d)(1) requires that discretionary funds (Assistance Listing 93.575) be obligated in the fiscal year in which funds are awarded or in the succeeding fiscal year. Unliquidated obligations as of the end of the succeeding fiscal year shall be liquidated within one year. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR § 200.403(h) requires costs be incurred during the approved budget period. Condition: Expenditures were incurred after the end of the grant’s period of performance. Cause: The Department’s internal controls failed to identify and prevent charging costs incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Questioned Costs: $11 is based on the sum of the three transactions that incurred program expenditures that were outside of the period of performance Context: Three of sixty expenditure transactions tested had incurred program expenditures at the end of the obligation period that were not obligated and expended in accordance with program requirements. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department review and update internal controls to ensure all expenditures charged to federal awards are incurred within the grant's period of performance. Views of responsible officials and planned corrective actions: See management’s response on page 200.
2025 – 032. Reporting Federal Agencies: Department of Health and Human Services Federal Program Titles: CCDF Cluster Assistance Listings: 93.575 Federal Grant ID Numbers: 2302SCCCDD & 2402SCCCDD Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. 2 CFR § 200.303(a) requires that the recipient and subrecipient must establish and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: The Department did not report accurate financial information to the federal reporting agency. Cause: The Department's internal control failed to ensure retention of documentation. Effect: The Department could fail to appropriately report the FFATA. Questioned Costs: None. There were no federal expenditures associated with this area of compliance. Context: In our testing of the four subrecipients, it was determined that the department could not provide the FFATA submission documentation for one of them. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend that the Department strengthen its internal controls to ensure that FFATA reports are submitted and documented appropriately. Views of responsible officials and planned corrective actions: See management’s response on page 201.
2025 – 033. Reporting and Earmarking Federal Agencies: Department of Health and Human Services Federal Program Titles: CCDF Cluster Assistance Listings: 93.575 and 93.596 Federal Grant ID Numbers: 2201SCCCDD and 2201SCCCDF Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. 45 CFR § 98.50(f) requires that the Lead Agency shall: (1) Reserve the minimum amount required under paragraph (b) of section 45 CFR § 98.50 for quality activities, and the funds for administrative costs described at paragraph (d) of section 45 CFR § 98.50; and (2) From the remainder, use not less than 70 percent to fund direct services (provided by the Lead Agency). Condition: The Department did not ensure four key line-items were accurately reported on the financial report. Cause: The Department's internal controls failed to prevent inaccurate reporting of expenditures. Effect: The accuracy of the financial report could not be validated. Questioned Costs: None. We did not question any costs, the costs were only reported incorrectly. Context: In our testing of four key line-items, it was determined that the department miscategorized transactions when grouping the line-item totals on the report. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend the Department strengthen its internal controls to ensure all reports are accurately prepared and submitted. Views of responsible officials and planned corrective actions: See management’s response on page 201.
2025 – 034. Eligibility Federal Agency: Department of Agriculture Federal Program Title: Child and Adult Care Food Program Assistance Listing: 10.558 Federal Grant ID Number: 5SC300329 Pass-Through Entity: Not Applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 7 CFR 226.6(b)(3), any new or renewing institution applying for participation in the Program must be notified in writing of approval or disapproval by the State agency, within thirty calendar days of the State agency's receipt of a complete application. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Department was unable to provide documentation to verify seven institutions were notified of approval or disapproval within thirty calendar days of the State agency's receipt of a completed application. Cause: Internal controls failed to ensure that subrecipients were notified of approval/disapproval. Effect: Without adequate controls in place, the Department will not be in compliance with eligibility requirements. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: The Department could not provide supporting documentation that seven out of sixty subrecipients tested received notification of approval/disapproval within thirty calendar days of completion of application. Prior Year Single Audit Finding Number: Not Applicable Recommendation: We recommend the Department strengthen controls to ensure that documentation exists that subrecipients were notified of approval/disapproval. Views of responsible officials and planned corrective actions: See management’s response on page 201.
2025 – 035. Reporting Federal Agency: Department of Health and Human Services Federal Program Title: Temporary Assistance for Needy Families Assistance Listing: 93.558 Federal Grant ID Numbers: 2201SCTANF and 2501SCTANF Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 265.7(a) requires that each state's quarterly reports, including the TANF Data Report, be complete and accurate. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Discrepancies existed between the ACF-199 (TANF Data Report) and the Department’s records. The agency did not comply with their approved corrective action plan for formal documentation of report review. Cause: The incorrect source data was utilized when completing the referenced data element on the performance report. Effect: Some of the data fields reported on the ACF-199 report are inconsistent with the supporting case records. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: Key data elements for ten families were tested from one quarterly ACF-199 report. A discrepancy was noted for one data element related to recording the number of months countable towards the federal time limit for assistance. This is a repeat finding from the fiscal year 2024 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Correction Action Implemented”. Due to this issue repeating for fiscal year 2025, this issue has not been fully corrected. Prior Year Single Audit Finding Number: 2024-024 Recommendation: We recommend that the Department strengthen its processes to ensure that federal reports are free from error prior to submission. We also recommend that the Department update and review processes to ensure proper documentation of supervisory review is maintained. Views of responsible officials and planned corrective actions: See management’s response on page 202.
2025 – 036. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of Housing and Urban Development Federal Program Title: Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii Assistance Listing: 14.228 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.405(a) states that a cost is allocable to a Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Costs charged to the program were not adequately allocated. Cause: The Office failed to ensure costs were properly allocated based upon the approved cost allocation plan for FY25. Effect: The potential for overcharging the grant exists when costs charged to the federal award are not properly allocated. Questioned Costs: $12,949. The Disaster Relief and Mitigation grants were overcharged by $4,316 and $8,633, respectively. Context: One of twenty-two expenditures tested had costs improperly charged to the federal award. The transaction involved allowable charges that benefited multiple grant programs and activities but were not properly allocated to match the Office’s cost allocation plan for FY25. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend the Office review and update its procedures to ensure all costs charged to the grant are properly allocated to applicable grants and funding sources based upon their yearly cost allocation plan. Views of responsible officials and planned corrective actions: See management’s response on page 203.
2025 – 037. Reporting Federal Agency: Department of Housing and Urban Development Federal Program Title: Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii Assistance Listing: 14.228 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department did not submit FFATA reports on time for FY25. Cause: The Department lacked sufficient internal controls and/or written procedures to ensure FFATA reports were submitted on time. Effect: The Department was not in compliance with FFATA reporting requirements. Questioned Costs: None, as it relates to timely reporting, rather than unallowable expenditures Context: Eight of the forty FFATA reports tested were submitted after the reporting deadline. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department implement procedures to ensure reports are submitted in compliance with FFATA reporting requirements. Views of responsible officials and planned corrective actions: See management’s response on page 204.
2025 – 038. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 21.027 Federal Grant ID Number: None Provided Pass-Through Entity: Not applicable Award Period: March 3, 2021, through December 31, 2026 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 75.403 (a) costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. 2 CFR § 200.302 (b)(3) states each recipient’s and subrecipient’s financial management system must provide maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Amounts charged to the program did not agree to the supporting invoices. Cause: The Department’s review process and internal controls did not detect discrepancies between the invoiced amounts and the amounts recorded and charged to the grant. Effect: Program expenditures were not accurately recorded in the Department’s financial records. Questioned Costs: None, as this finding relates to an underpayment. Context: One out of four transactions tested, the amount charged to the Federal program did not agree to the amount reflected on the supporting invoice. The Department recorded and reimbursed an amount that was less than the invoiced amount, resulting in an underpayment totaling $313. This is a repeat finding from the fiscal year 2024 Single Audit. The Office stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2024, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2024-026 Recommendation: We recommend that the Department strengthen controls to ensure the review process includes verification that amounts charged to the grant agree to the supporting invoices prior to reimbursement. Views of responsible officials and planned corrective actions: See management’s response on page 206.
2025 – 039. Reporting and Matching Federal Agency: Department of Health and Human Services Federal Program Title: Maternal and Child Health Services Block Grant to the States Assistance Listing: 93.994 Federal Grant ID Number: B04MC47445 Pass-Through Entity: Not Applicable Award Period: October 1, 2022, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies existed between the Federal Financial Report (FFR) and the accounting system. In addition, although the Department met their matching requirement, the Department’s calculation did not align with expenditures from the accounting system. Cause: For the recipient share of expenditures reported on the FFR, the Department reported the matching amount included on the grant award document instead of the calculated match prepared by the Budget Analyst. For indirect costs, the base expenditures were not reported with the correct applicable rate for each applicable period. Finally, the internal database the Department used to make the matching calculation contained incomplete expenditure data causing an incorrect calculation. The Department’s internal controls failed to detect that the expenditures in the internal database did not reconcile with the actual expenditures from the accounting system. Effect: The Department’s control procedures did not detect the calculation errors identified in our testing. Questioned Costs: None, as the finding relates to reporting requirements, and the Department met their matching requirement. Context: We tested the sole FFR report submitted during fiscal year 2025 and identified reporting discrepancies in financial data related to the recipient share of expenditures and indirect expenditures. In addition, we noted that the Department’s calculation of the state match differed from the recipient share of expenditures reported on the FFR and was based on inaccurate data. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its internal controls and processes to ensure that federal reports are free from error prior to submission and that matching calculations are based on accurate accounting records. Views of responsible officials and planned corrective actions: See management’s response on page 207.
2025 – 040. Earmarking and Level of Effort Federal Agency: Department of Health and Human Services Federal Program Title: Maternal and Child Health Services Block Grant to the States Assistance Listing: 93.994 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 42 USC 704(d) requires that a state may not use more than ten percent of allotted funds for administrative expenses. 42 USC 705(a)(4) requires that the state must maintain the level of funds provided solely by the state for maternal and child health programs at a level at least equal to the level provided in fiscal year 1989. 2 CFR § 200.303(a) requires that the recipient and subrecipient establish and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Department was not in compliance with the ten percent administrative expenses requirement. In addition, although the Department exceeded the level of effort requirement threshold, the calculated amount was less than what was actually expended. Cause: The internal database the Department used to calculate the earmarking and level of effort requirements contained incomplete expenditure data causing incorrect calculations. The Department’s internal controls failed to detect that the expenditures in the internal database did not reconcile with the actual expenditures from the accounting system. Effect: The Department’s control procedures did not detect the calculation errors identified in our testing, which leads to an increased risk of not meeting earmarking or level of effort requirements. Questioned Costs: Questioned costs totaled $142,775 as this was the amount expended over the allotted ten percent earmarking threshold for administrative expenses. There were no questioned costs related to the level of effort requirement. Context: The Department reviews the earmarking and level of effort calculations and reports these amounts as part of the annual Maternal and Child Health Services Block Grant Application/Annual Report. We selected for testing the most recently submitted 2025 report which contain expenditure details related to fiscal year 2024 and noted discrepancies between Department support and the accounting system. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its controls to ensure that earmarking and level of effort calculations are based on accurate data from the accounting system. Views of responsible officials and planned corrective actions: See management’s response on page 208.
2025 – 041. Period of Performance Federal Agency: Department of Health and Human Services Federal Program Title: Maternal and Child Health Services Block Grant to the States Assistance Listing: 93.994 Federal Grant ID Numbers: B04MC47445 and B04MC54575 Pass-Through Entity: Not Applicable Award Period: October 1, 2022, through September 30, 2026 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires costs to be incurred during the approved budget period. Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Expenditures were incurred and charged outside of the period of performance. Cause: The Department’s internal controls failed to identify and prevent charging costs incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Questioned Costs: $1,338. The amount is based on the sum of the five transactions that had incurred program expenditures outside of the applicable period of performance date. Context: For a total of sixty expenditure transactions tested, one transaction had costs that were incurred before the start of the period of performance date and four transactions had incurred program expenditures that were not obligated and expended in accordance with program requirements. Recommendation: We recommend the Department review and update its internal controls to ensure that all expenditures charged to federal awards are incurred within the grant's period of performance. Prior Year Single Audit Finding Number: Not applicable Views of responsible officials and planned corrective actions: See management’s response on page 209.
2025 – 042. Reporting Federal Agency: Department of Health and Human Services Federal Program Title: Maternal and Child Health Services Block Grant to the States Assistance Listing: 93.994 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies existed between the Maternal and Child Health Services Block Grant Application/Annual Report and the accounting system. Cause: The internal database the Department used to compile the report contained incomplete expenditure data causing incorrect calculations. The Department’s internal controls failed to detect that the expenditures in the internal database did not reconcile with the actual expenditures from the accounting system. Effect: Although the Department still met matching and earmarking requirements, several reported amounts of 2023 expenditures were not accurately stated within the report. Questioned Costs: None, as this finding relates to reporting requirements, rather than unallowable expenditures. Context: For the sole Maternal and Child Health Services Block Grant Application/Annual Report submitted during fiscal year 2025, the Department reported inaccurate expended fiscal year 2023 data on Form 2 including amounts related to state matching and earmarking requirements. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure accurate filing of the Maternal and Child Health Services Block Grant Application/Annual Report. Views of responsible officials and planned corrective actions: See management’s response on page 209.
2025 – 043. Cash Management Federal Agency: Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements and Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health Assistance Listing: 93.268 and 93.967 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR § 205.11(a) requires a State and a Federal Program Agency must minimize the time elapsing between the transfer of funds from the United States Treasury and the State's payout of funds for Federal assistance program purposes, whether the transfer occurs before or after the payout of funds. Condition: Supporting documentation was not adequate to determine if federal reimbursements were properly reviewed and approved by a programmatic supervisor prior to requesting a drawdown as required by the Department’s policies and procedures. In addition, some draws were made in excess of allowable incurred expenditures. Cause: The Department failed to retain documentation demonstrating performance of a programmatic supervisory review and approval. In addition, Department controls failed to detect potential overcharging of the grant. Effect: The Department may drawdown funds in excess of eligible reimbursable expenditures. Questioned Costs: Total questioned costs could not be determined due to the Department’s methodology of calculating grant draws. Context: The following discrepancies were encountered during testing of cash management: • Five of seven Immunization Cooperative Agreements drawdowns and six of eight Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health drawdowns selected for testing lacked sufficient documentation to confirm whether the federal reimbursement requests had a separate and appropriate preparer and reviewer prior to requesting a drawdown. • In addition, each respective program had one tested drawdown where the requested grant reimbursement amount was greater than the eligible costs recorded in the accounting system. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its controls to ensure that drawdowns are reviewed appropriately and that drawdowns are reconciled to grant expenditures prior to the submission of the reimbursement request to prevent overdrawing the grant. Views of responsible officials and planned corrective actions: See management’s response on page 210.
2025 – 044. Special Tests and Provisions Federal Agency: Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements Assistance Listing: 93.268 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance Criteria: The Office of Management and Budget’s (OMB) 2025 Compliance Supplement states that effective control and accountability must be maintained for all vaccines under the Vaccines for Children (VFC) program. Vaccines must be adequately safeguarded and used solely for authorized purposes in accordance with guidance set forth in 42 USC 1396s. To comply with this requirement, the Department’s Vaccines for Children Operation Guide requires that all completed VFC compliance site visits be reviewed by the VFC coordinator, immunization program manager, or a designee. 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Department did not perform a review and approval of a VFC compliance site visit in accordance with its policies. Cause: Due to staffing turnover, there were delays in reviewing compliance visits. Effect: In the absence of a compliance visit review, providers could have unresolved issues that could affect the quality and quantity of vaccines provided to VFC recipients. Questioned Costs: None, as this finding relates to an untimely approval of a compliance site visit, rather than unallowable expenditures. Context: For sixty providers selected for testing, one compliance site visit did not have approval completed by the VFC Coordinator, Immunization Program Manager, or a designee. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department ensure compliance visits are reviewed in accordance with Department policy. Views of responsible officials and planned corrective actions: See management’s response on page 211. Auditor’s Conclusion: The compliance site visit where we noted the untimely review was performed on June 6, 2025. Although the Department had been tracking and monitoring the site visit, it was not reviewed or approved by the VFC-Coordinator or their designee as of our audit fieldwork in early February of 2026. Based on our audit inquiries, the documentation relating to the provider’s compliance site visit was updated, which enabled the site visit to be approved a few days later. We understand there were difficulties with staffing turnover, but in instances of prolonged vacancies, there should be policies to help reduce the timing between when site visits are conducted and when they can be reviewed.
2025 – 045. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of Health and Human Services Federal Program Title: Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health Assistance Listing: 93.967 Federal Grant ID Number: NE11OE000041 Pass-Through Entity: Not Applicable Award Period: December 1, 2023, through November 30, 2025 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: The Department did not maintain appropriate documentation supporting the review and approval over one journal entry. Cause: The Department failed to retain documentation demonstrating performance of a supervisory review and approval. Effect: Without a proper supervisory review, there is an increased risk that the Department could allocate unallowable costs to the grant. Questioned Costs: None, as the issue is only related to the review of the entry and not unallowable expenditures. Context: For one of seventy transactions selected for testing, supporting documentation was not adequate to demonstrate that a proper review and approval by a programmatic supervisor occurred on the journal entry form. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen controls to ensure that documentation is maintained to support that costs charged to the grant were properly reviewed and approved for allowability. Views of responsible officials and planned corrective actions: See management’s response on page 212.
2025 – 046. Suspension and Debarment Federal Agency: Department of Health and Human Services Federal Program Titles: Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health and Epidemiology and Laboratory Capacity for Infectious Disease (ELC) Assistance Listings: 93.967 and 93.323 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various. Type of Finding: Significant deficiency in internal control over compliance, other matters. Criteria: 2 CFR § 180.300 requires that when a non-federal entity enters into a covered transaction (contracts for goods and services that are expected to equal or exceed $25,000, as well as all subawards to subrecipients, irrespective of award amount) with an entity at a lower tier, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. The regulation lists several permitted methods for verification, including checking the System for Award Management (SAM.gov) Exclusions maintained by the United States General Services Administration. Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: Compliance with suspension and debarment regulations could not be confirmed for one vendor contract. Cause: The Department was unable to locate the documentation demonstrating that they checked the SAM.gov Exclusions for that vendor. Effect: The Department’s compliance with federal suspension and debarment requirements was not supported by adequate documentation. Questioned Costs: None, as the finding is related to insufficient verification documentation rather than unallowable expenditures. Context: The Department verifies suspension and debarment through checking SAM.gov Exclusions. For one out of six vendors tested, the Department was unable to provide support that they checked the SAM.gov Exclusions. Suspension and debarment is performed on an agencywide basis for all grant programs. In the fiscal year 2024 Single Audit, there was a similar finding for the Epidemiology and Laboratory Capacity for Infectious Disease (Assistance Listing Number 93.323) program. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected” with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2025, the issue has not been fully corrected. Prior Year Single Audit Finding Number: 2024-032 for Epidemiology and Laboratory Capacity for Infectious Disease (ELC) (Assistance Listing Number 93.323). Recommendation: We recommend the Department consistently adhere to its procedures including maintaining the SAM.gov Exclusions check for all applicable vendors. Views of responsible officials and planned corrective actions: See management’s response on page 212.
2025 – 047. Equipment and Real Property Management Federal Agency: Department of Health and Human Services Federal Program Title: Public Health Emergency Preparedness and Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Assistance Listing: 93.069 and 93.354 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR § 200.313(d)(1) requires property records include a description of the property, a serial number or another identification number, the source of funding for the property (including the Federal Award Identification Number (FAIN)), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use, and condition of the property, and any disposition data including the date of disposal and sale price of the property. Condition: The Department was not in compliance with several equipment and real property requirements. Cause: The Department’s processes did not ensure that assets transferred during the transition from the Department of Health and Environmental Control (DHEC) to the Department of Public Health (DPH) were properly associated with the applicable federal funding source or grant information within the asset management system. Effect: Incomplete property records increase the risk that equipment purchased with federal funds may not be properly tracked, monitored, or reported in accordance with federal regulations. Questioned Costs: None, as this finding relates to equipment record keeping, rather than unallowable expenditures. Context: During follow-up procedures related to equipment and real property management, the Department provided an asset history listing for review. However, the listing did not clearly identify assets purchased with federal funds. Additionally, assets transferred from DHEC to DPH in the South Carolina Enterprise Information System (SCEIS) were not associated with a federal funding source or specific grant. As a result, the Department was unable to demonstrate that equipment purchased with federal funds was being tracked in accordance with federal requirements. In addition, since assets were not listed under federal grants, we were unable to obtain a population to test whether assets bought with federal grants were accounted for in the Department’s annual physical inventory. This is a repeat finding from the fiscal year 2023 Single Audit. The Office stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2023, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2023-026 Recommendation: We recommend the Department strengthen procedures to ensure equipment purchased with federal funds is properly tracked and associated with the applicable federal funding source within the asset management system and property records should include all elements required by federal regulations. Views of responsible officials and planned corrective actions: See management’s response on page 213.