Audit 395199

2025-003: U.S. Department of the Interior Direct and Pass-through Tahoe Resource Conservation District Southern Nevada Public Land Management, 15.235 Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 15.235 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 of U.S. Code of Federal Regulation (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides that a non-federal entity may charge only allowable costs that are adequately documented and are necessary and reasonable for performance of the federal award under the principles of 2 CFR Part 200, Subpart E. Uniform Guidance section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Expenditures for equipment usage were charged to the grant using an incorrect billing rate and billing rates for burn mix were not originally documented and supported. Cause: North Lake Tahoe Fire Protection District (the District) did not have adequate internal controls to ensure accurate billing rates for equipment charges were used and to ensure that internally generated fees, such as burn mix, were documented to support the amount billed to the grant. Effect: Unallowable costs were charged to the program. Questioned Costs: None reported as known and projected questioned costs were less than $25,000. Context/Sampling: A nonstatistical sample of 60 ($15,434) out of a population of 708 ($112,987) equipment usage expenditures was selected for testing. Two transactions were for burn mix, which was billed at an internally generated rate. The documentation for developing the rate was not originally maintained. However, it was generated during the audit to assist in determining the reasonableness of what was charged. In addition, 11 transactions were for a Chipper Trailer, which were charged to the program at $72.38 per hour of usage rather than the published rate of $72.28 per hour. Repeat Finding from Prior Year: No Recommendation: We recommend the District enhance internal controls to ensure accurate billing rates for equipment charges are used and that charges for internally generated fees, such as burn mix, are documented prior to charging the fees to the program. Views of Responsible Officials: North Lake Tahoe Fire Protection District agrees with this finding.

2025-004: U.S. Department of the Interior Direct and Pass-through Tahoe Resource Conservation District Southern Nevada Public Land Management, 15.235 Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 15.235 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that a recipient use its own documented procurement procedures which reflect applicable state and local laws and regulations, provided that the policies conform to applicable federal law. In addition, recipients are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Procurement policies were consistent with state laws under Nevada Revised Statutes but did not consider or conform to all applicable federal procurement laws. In addition, procedures were not followed to verify if an entity was suspended or debarred before entering into a covered transaction. Cause: North Lake Tahoe Fire Protection District (the District) did not have adequate internal controls to ensure procurement policies complied with applicable federal laws or to ensure procedures were followed to verify an entity was not suspended or debarred prior to entering into a covered transaction. Effect: An inappropriate procurement method may be used. A covered transaction may be entered into with an entity that is suspended or debarred. Questioned Costs: None Context/Sampling: All procurements were tested as a population of one was noted. Suspension and debarment verification procedures were not performed for the vendor. Lastly, as noted the procurement policies were reviewed and were absent consideration of federal criteria regarding: • Avoidance of acquisition of duplicative items • Awarding to responsible parties and contract oversight • Federal solicitation provisions • Disadvantaged Business Enterprise programs • Contract price and types • Bonding requirements • Contract provisions and recovered materials Repeat Finding from Prior Year: No Recommendation: We recommend the District update its written procurement policy to include federal laws and implement internal controls to ensure procedures are followed to verify an entity is not suspended or debarred prior to entering into a covered transaction. Views of Responsible Officials: North Lake Tahoe Fire Protection District agrees with this finding.