Finding No.: 2024-010 Federal Agencies: U.S. Department of Agriculture U.S. Department of the Interior AL Programs: 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children 15.875 Economic, Social, and Political Development of the Territories Area: Cash Management Questioned Costs: $ Undeterminable Criteria: 2 CFR 200.305 states that payments for States are governed by Treasury-State Cash Management Improvement Act (CMIA) agreements and default procedures codified at 31 CFR 205. Subpart A of regulations at 31 CFR Part 205 requires state recipients to enter into Treasury-State Agreements (TSA) that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing that meet the funding threshold for a major federal assistance program under the CMIA. TSA also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a TSA are subject to procedures prescribed by U.S. Department of the Treasury in Subpart B of 31 CFR Part 205, which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. GovGuam entered into TSA effective October 1, 2023 through September 30, 2024. The funding technique indicated in the TSA Section 6.3.2 for the program is Payment Schedule – Weekly, wherein, GovGuam shall request funds such that they are deposited in a State account on the median business day of the week. The request shall be made in accordance with the appropriate Federal agency cut-off time. The amount of the request shall be a prorated share of the lesser of (1) the annual grant divided by 52, or (2) the total amount of Federal funds expected to be paid out for program purposes during the year divided by 52. This funding technique is interest neutral. Condition: For nine (or 100%) of nine items tested under ALN 10.557 and for eight (or 100%) of eight items tested under ALN 15.875, the Department of Administration (DOA) drew funds in a manner that was inconsistent with the funding technique indicated in TSA. Specifically, DOA requested funds after expenditures have been incurred or on “as needed” basis. Finding No.: 2024-010, continued Federal Agencies: U.S. Department of Agriculture U.S. Department of the Interior AL Programs: 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children 15.875 Economic, Social, and Political Development of the Territories Area: Cash Management Questioned Costs: $ Undeterminable Cause: DOA did not enforce compliance with the requirements of the TSA due to inefficiencies caused by data migration during the year. Effect: GovGuam is in noncompliance with the applicable cash management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: DOA should implement monitoring over compliance with the cash management requirements and enforce compliance with the TSA. Views of Responsible Officials: The Federal and Compliance section will establish a Standard Operating Procedure for draw downs. As well as, conducting drawdowns daily to minimize the time between the drawdowns of federal funds and the disbursement for federal program purposes.
Finding No.: 2024-011 Federal Agency: U.S. Department of Agriculture AL Program: 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children Area: Period of Performance Questioned Costs: $217,035 Criteria: In accordance with applicable period of performance (POP) requirements, a State may only charge allowable costs incurred during a federal award’s period of performance as specified in the terms and conditions of the federal award or in the approved extension. Conditions: Of fifty-five items, aggregating $1,471,726 of $4,046,837 of expenditures subjected to period of performance test, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. For item #s 1 through 10, compliance with period of performance could not be determined as supporting documents (e.g., invoices, receipts, or time logs, check payment, etc.) were not made available for examination. For item #s 11 through 17, compliance whether liquidation of the obligation occurs within the allowable time period could not be determined as supporting documents such as canceled check or payment document was not made available for examination. Finding No.: 2024-011, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children Area: Period of Performance Questioned Costs: $217,035 Cause: The Department of Public Health and Social Services (DPHSS) did not provide supporting documentation to ensure compliance with period of performance requirements. The Department of Administration (DOA) additionally had limited staffing and resources during the review period that may have hindered their ability to obtain and compile documentation from DPHSS, resulting in incomplete submissions. Effect: GovGuam is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $217,035 based on the items identified in Conditions above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements, specifically, ensuring all supporting documentation is on file. Views of Responsible Officials: The DPHSS WIC Program disagrees with the findings. All supporting documents related to the findings were provided promptly on March 3,2026 when request was received on February 26,2026. In accordance with WIC FY 2024 Closeout Guidance and the requirements under 2 CFR 200.344, the WIC Program is allowed 90 days after the end of the period of performance to submit all final financial reports, as well as 90 days to liquidate all obligations incurred during the period of performance. For FY 2024, the closeout timeline required that all obligations be liquidated no later than January 31, 2025. The program adhered to these federal requirements. All obligations were liquidated prior to the close of the fiscal year grant, and obligations were reported in the fiscal year in which they occurred, consistent with 7 CFR 246.17. Furthermore, the final closeout report was submitted within 120 days after the end of the fiscal year, fully complying with WIC closeout procedures. Based on the timely submission of all supporting documentation and adherence to federal closeout regulations, the DPHSS WIC Program maintains that the questioned costs were appropriately obligated, liquidated, and reported. Finding No.: 2024-011, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children Area: Period of Performance Questioned Costs: $217,035 Auditor’s Response: Our finding remains. Documents subsequently received by auditors on February 10, 2026 from the Department of Administration (DOA) are insufficient or incomplete to substantiate compliance with period of performance. There are no subsequent submissions or other documentations received to resolve remaining findings cited in the conditions above.
Finding No.: 2024-012 Federal Agency: U.S. Department of Agriculture AL Program: 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children Area: Procurement and Suspension and Debarment Questioned Costs: $1,433 Criteria: 2 CFR 200.302 states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient and subrecipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Moreover, the recipient’s and subrecipient’s financial management system must provide for 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. Conditions: 1. For 2 (or 50%) of four items, aggregating $4,618 of $223,728 expenditures subjected to procurement and suspension and debarment test, no procurement file was provided to substantiate whether the Department of Administration (DOA) complied with applicable procurement requirements for the following: See the Notes to the SEFA for chart/table. 2. Seven initially tested samples were later determined to be procured in prior years and are not procurements during fiscal year 2024. Consequently, remaining samples tested were insufficient to satisfy the minimum number of items to test. Finding No.: 2024-012, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children Area: Procurement and Suspension and Debarment Questioned Costs: $1,433 Cause: DOA’s new financial management system implemented during the fiscal year has no capability to generate a report of all expenditures procured during the fiscal year and expenditure information from the old financial management system are not completely evident from the migrated expenditure information in the new financial management system, hence, there was difficulty in establishing population that will be subjected to procurement and suspension and debarment test. As there was no efficient alternative way of identifying whether or not costs charged to the program were procured during the fiscal year, and due to the timing of the audit and lack of staffing resources, DOA was unable to provide the procurement files of selected transactions by the agreed audit timeline. Effect: GovGuam is in noncompliance with applicable procurement and suspension and debarment requirements. The reportable questioned cost is $1,433 based on the items identified in Condition #1 above. Recommendation: DOA management should ensure that financial management system in place permits the preparation of reports of all expenditures procured during the fiscal year. Responsible personnel should ensure that documentation is adequate to comply with the applicable procurement requirements. Specifically, documentation should indicate the history of procurement, including the solicitation process and rationale for contractors or vendor selection. Views of Responsible Officials: GSA will continue to verify vendor eligibility through SAM.gov prior to contract award. Documentation of the verification will be retained in the procurement file for each transaction. GSA has revised IFB templates to include the required debarment and suspension certification language in accordance with 2 CFR 200.214. Effective immediately, all new contracts will include this clause prior to execution. For local vendors that may not appear in federal systems, GSA will require a debarment and suspension certification as part of the contracting process and maintain this documentation within the procurement record.
Finding No.: 2024-013 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Allowable Costs/Cost Principles Area: Procurement and Suspension and Debarment Questioned Costs: $4,594,214 Criteria: 2 CFR 200.403(a) states that federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and 2 CFR 200.403(g) states that costs should be adequately documented. 2 CFR 200.439(b) states that: (1) Capital expenditures for general purpose equipment, buildings, and land are allowable as direct costs, but only with the prior written approval of the Federal agency or pass-through entity. (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $10,000 or more have the prior written approval of the Federal agency or pass-through entity. (3) Capital expenditures for improvements to land, buildings, or equipment that materially increase their value or useful life are allowable as a direct cost, but only with the prior written approval of the Federal agency or pass-through entity. 2 CFR 180.300 requires entities entering into a covered transaction with another person at the next lower tier to verify that the person with whom they intend to do business is not excluded or disqualified. Such verification can be made by (a) checking SAM.gov Exclusions, or (b) collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. 2 CFR 180.220 (b) (1) states that a contract for goods and services is a covered transaction if the contract is awarded by a participant in a nonprocurement transaction covered under 2 CFR 180.210, and the contract amount is expected to equal or exceed $25,000. Finding No.: 2024-013, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Allowable Costs/Cost Principles Area: Procurement and Suspension and Debarment Questioned Costs: $4,594,214 Criteria, continued: 2 CFR 200.302 states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient and subrecipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Moreover, the recipient’s and subrecipient’s financial management system must provide for 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. Conditions: 1. For four (or 11%) of thirty-eight items, aggregating $7,792,207 of $11,505,805 in total non-payroll expenditures subjected to allowable costs/cost principles compliance test, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. For item #s 1 through 4, there is no Authorization to Proceed (ATP) document on file to support that expense was approved prior to being incurred. Finding No.: 2024-013, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Allowable Costs/Cost Principles Area: Procurement and Suspension and Debarment Questioned Costs: $4,594,214 Conditions, continued: 2. For seven (or 88%) of eight items, aggregating $4,061,890 of $4,681,768 of expenditures subjected to procurement and suspension and debarment compliance test, we noted the following: See the Notes to the SEFA for chart/table. For item #s 1 through 3, the General Services Agency (GSA) represented that it performed verification of suspension or debarment from SAM.gov. However, no formal documentation is kept on file to demonstrate compliance at the time of procurement. For item #s 4 through 7, no procurement file was provided to substantiate whether the Department of Administration (DOA) complied with applicable procurement and suspension and debarment requirements. 3. Schedule of Expenditures of Federal Awards (SEFA) was revised subsequently after expenditures were initially determined and tested for suspension and debarment. Based on the revised SEFA, the number of items tested were insufficient to satisfy the minimum required number of items to test. Cause: The Department of Administration (DOA) did not obtain ATP documentation from federal grantor agency as they represented that it is not required since the requirement to obtain such is not explicitly indicated in the grant award. Finding No.: 2024-013, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Allowable Costs/Cost Principles Area: Procurement and Suspension and Debarment Questioned Costs: $4,594,214 Cause, continued: DOA’s new financial management system implemented during the fiscal year has no capability to generate a report of all expenditures procured during the fiscal year and expenditure information from the old financial management system are not completely evident from the migrated expenditure information in the new financial management system, hence, there was difficulty in establishing population that will be subjected to procurement and suspension and debarment test. As there was no efficient alternative way of identifying whether or not costs charged to the program were procured during the fiscal year, and due to the timing of the audit and lack of staffing resources, DOA was unable to provide the procurement files of selected transactions by the agreed audit timeline. This limitation resulted to repeated replacement of sample selections to meet the minimum sample size required for testing. DOA also does not have a formal policy requiring documentation of procedures performed to verify that the person in a covered transaction with whom they intend to do business is not excluded or disqualified. Effect: GovGuam is in noncompliance with applicable allowable costs/cost principles and procurement and suspension and debarment requirements. The reportable questioned cost related to allowable costs/cost principles requirements based on the items identified in Condition #1 above is $3,850,177. The reportable questioned cost related to procurement and suspension and debarment requirements based on the items identified in Condition #2 above is $4,054,514. Only $4,594,214 total questioned cost is reported at this finding as $3,310,477 is reported and included in both Condition #s 1 and 2 above. Identification as a Repeat Finding: 2023-012 Recommendation: DOA management should obtain clarification from federal grantor agency regarding ATP requirement and/or exemption of capital expenditures of the program. Finding No.: 2024-013, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Allowable Costs/Cost Principles Area: Procurement and Suspension and Debarment Questioned Costs: $4,594,214 Recommendation, continued: DOA management should ensure that financial management system in place permits the preparation of report of all expenditures procured during the fiscal year. Responsible personnel should ensure that documentation is adequate to comply with the applicable procurement requirements. Specifically, documentation should indicate the history of procurement, including the solicitation process and rationale for contractors or vendor selection. DOA management should establish formal policy requiring retaining documentation of procedures performed to verify that the person in a covered transaction with whom they intend to do business is not excluded or disqualified. Views of Responsible Officials: Agency disagrees with 2 out of the 3 findings. • Condition 1 regarding the Authorization To Proceed (ATP), as per the Grant and Cooperative Agreement and the Grant Terms and Conditions, it did not state that an ATP is required to begin work on the grant for D20AP00048 and D21AP10145.The Government complies with ATP requirements for grants which mandate such compliance. If the grant is silent, no ATP is required.. • Condition 2 GSA will continue to verify vendor eligibility through SAM.gov prior to contract award. Documentation of the verification will be retained in the procurement file for each transaction. • Condition 3 The necessary controls will be strengthened when the updated Federal Grant module is fully implemented. Auditor’s Response: Our finding remains. Although no ATP may be required, the selected samples did not demonstrate compliance related to obtaining the required written pre-approval as mentioned in the criteria above.
Finding No.: 2024-014 Federal Agency: U.S. Department of Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $ Undeterminable Criteria: In accordance with 2 CFR 200.313(b), a State must use, manage and dispose of equipment acquired under a Federal award in accordance with State laws and procedures. 2 CFR 200.313(d) states that regardless of whether equipment is acquired in part or its entirety under the Federal award, the recipient must manage equipment (including replacement equipment) utilizing procedures that meet the following requirements: (1) Property records must include a description of the property, a serial number or another identification number, the source of funding for the property (including the 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. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property. (2) A physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years. (3) A control system must be in place to ensure safeguards for preventing property loss, damage, or theft. Any loss, damage, or theft of equipment must be investigated. The recipient or subrecipient must notify the Federal agency or pass-through entity of any loss, damage, or theft of equipment that will have an impact on the program. (4) Regular maintenance procedures must be in place to ensure the property is in proper working condition. (5) If the recipient or subrecipient is authorized or required to sell the property, proper sales procedures must be in place to ensure the highest possible return. Furthermore, 2 CFR 200.303(a) states that the recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the COSO. Finding No.: 2024-014, continued Federal Agency: U.S. Department of Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $ Undeterminable Conditions: 1. Bureau of Budget and Management Research (BBMR) lacks adequate internal policies and procedures over compliance with the applicable federal property rules and regulations. 2. BBMR’s capital asset records do not meet the criteria above and lacks certain information such as: a. Serial number or asset tag number b. Funding source, including the FAIN c. Title holder d. Percentage of Federal participation in the project costs for the Federal award under which the property was acquired e. Location f. Use and condition g. Date of disposal, if any h. Sale price of the property 3. BBMR’s most recent comprehensive physical inventory of its property was in January 2016; however, the required reconciliation was not completed. As of September 30, 2024, the required biannual physical inventory and reconciliation were not performed. 4. As capital asset records are not effectively maintained, it does not appear that BBMR has effectively developed means to adequately safeguard capital assets from loss, damage, or theft, or to reasonably investigate such occurrences. We are unable to assess the overall cumulative monetary value of these deficiencies. However, the table below summarizes total capital outlays over the past five years. See the Notes to the SEFA for chart/table. Finding No.: 2024-014, continued Federal Agency: U.S. Department of Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $ Undeterminable Cause: The processes over inventory, maintenance and reconciliation of capital assets are not routine. BBMR requires additional funding and human resources to fully implement and develop a useful capital asset management system. Effect: GovGuam is in noncompliance with applicable equipment and real property management requirements. The underlying capital outlays are not considered questioned costs, as we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: 2023-011 Recommendation: BBMR should complete the required biannual physical inventory and reconciliations and should consider developing a more detailed corrective action plan with timetables for completing planned actions, such as processing required reconciliations and reports, training personnel and coordinating with other governmental units on property management requirements. Views of Responsible Officials: Implementation of a Fixed Assets Module as part of the new FMIS system that will help automate the tracking and reporting of Capital assets, is near completion with final testing in progress. DOA will update the SOP for the Fixed Assets for capital asset reporting accordingly. Review of Assets acquired in FY2024 was completed, with FY2025 in progress. As noted previously, the process is hampered by difficulties in recruiting personnel.
Finding No.: 2024-015 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Reporting Questioned Costs: $0 Criteria: 2 CFR 200.302(a) states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 300.302(b) states that recipient’s financial management system must provide for the following: 1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. 2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in 2 CFR 200.328 and 200.329. 3) 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 200.328(c) states that recipient must submit financial reports as required by the Federal award. Condition: Bureau of Budget and Management Research (BBMR) was unable to provide a complete listing of financial reports required to be submitted for each of grant awards effective during the fiscal year. Finding No.: 2024-015, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Reporting Questioned Costs: $0 Cause: BBMR did not maintain an internal monitoring of financial reports required to be submitted for each of grant awards effective during the fiscal year and did not ensure compliance with applicable reporting requirements. Effect: We are unable to determine compliance with applicable reporting requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: 2023-013 Recommendation: BBMR management should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain a monitoring of financial reports required to be submitted for each of grant awards effective during the fiscal year. Views of Responsible Officials: BBMR will work with DOA to keep soft copies of submitted and approved Federal Financial Reports (FFR) on hand.
Finding No.: 2024-016 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Subrecipient Monitoring Questioned Costs: $ Undeterminable Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity (PTE) must: a) Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). b) Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). c) Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition: Schedule of subrecipients were received past the deadline, and copies of related subaward documents including the terms and conditions of the subawards were not provided during the audit. Total amount passed through to subrecipients during the fiscal year is $713,822. Finding No.: 2024-016, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Area: Subrecipient Monitoring Questioned Costs: $ Undeterminable Cause: Bureau of Budget and Management Research (BBMR) management did not respond to audit requests in a timely manner. Effect: We are unable to verify compliance with the requirements for subrecipient monitoring. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: BBMR management should establish internal policies and procedures over timely response to audit-related matters. Views of Responsible Officials: BBMR will create Standard Operating Procedures as well as a checklist, to assist in the monitoring of subrecipient compliance.
Finding No.: 2024-017 Federal Agency: U.S. Department of Labor AL Program: 17.277 Workforce Investment Act (WIA) National Emergency Grants Federal Award No: 23A60DW000007 Area: Eligibility Questioned Costs: $23,715 Criteria: Section 189(h) of the Workforce Innovation and Opportunity Act (WIOA) requires individuals receiving any assistance or benefit under WIOA, that they not violate section 3 of the Military Selective Service Act (50U.S.C. app. 451) by not presenting and submitting to registration as required in (686.420) and TEGL 11-11, Chg. 2. Condition: For one (or 3%) of forty items, aggregating $784,344 of $4,820,337 in total participant benefits, no supporting document was provided to substantiate that the participant (employee # 62966) was compliant with WIOA Section 189(h) and was registered on the Selective Service System. Cause: Department of Labor (DOL) did not have adequate procedures to ensure that the participant was registered under the Selective Service System as required for men who were born on or after January 1, 1960 (i.e. 30 days before or 30 days after their birthday.) Effect: GovGuam is in noncompliance with applicable eligibility requirements. The reportable questioned cost is $23,715 based on the item identified in Condition above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable eligibility requirements, specifically, retaining sufficient documentation to support eligibility determination. Views of Responsible Officials: In June 2024, GDOL established a policy workgroup to modernize internal procedures. Consequently, the AJC-024-Selective Service Registration policy was updated and formally approved on August 12, 2024. This updated guidance was distributed to all American Job Center (AJC) staff and case managers on August 15, 2024, to ensure future consistency in documentation and eligibility overrides.
Finding No.: 2024-018 Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Eligibility Questioned Costs: $20,769 Criteria: Pursuant to section 501(k)(3)(B) of Division N of the Consolidated Appropriations Act, 2021, and 2 CFR 200.403, when providing ERA1 assistance, the grantee must review the household’s income and sources of assistance to confirm that the ERA1 assistance does not duplicate any other assistance, including federal, state, or local assistance provided for the same costs. Per Emergency Rental Assistance Frequently Asked Questions Revised July 27, 2022, in all cases, grantees must document their policies and procedures for determining household eligibility to include policies and procedures for determining the prioritization of households in compliance with the statute and maintain records of their determinations. Condition: For twelve (or 30%) of forty participants tested, aggregating $53,639 of $7,141,800 in total participant benefits, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. For item #s 1 through 2, no documentation was on file to support eligibility determination. For item #s 3 through 10, no documentation (e.g. check stubs and/or 1040 forms) was on file to support whether the participant met the income eligibility requirement. Furthermore, for items #s 3 through 8, documentation that determines the eligibility period (e.g. Approved Financial Assistance Form or Continuance of Assistance Approval Form) was not on file. Finding No.: 2024-018, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Eligibility Questioned Costs: $20,769 Condition, continued: For item # 11, supporting documentation on file to support whether all members in the household of the participant met the citizenship requirement (e.g. government issued identification card) was incomplete. For item # 12, inconsistent information was identified in the supporting documents such as the date of birth and familial relationships. Cause: The Department of Administration (DOA) could not locate records while physical files are currently being scanned and saved electronically due to the closure of the program. Effect: GovGuam is in noncompliance with applicable eligibility requirements. The reportable questioned cost is $20,769 based on the items identified in Condition above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable eligibility requirements, specifically, retaining sufficient documentation to support eligibility determination. Views of Responsible Officials: The Agency is reviewing the management of Federal Grants to ensure robust handover and succession plans are in place for future programs. The sudden passing of the ERA Program Coordinator directly impacted overall management of the program.
Finding No.: 2024-019 Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Matching, Level of Effort, Earmarking Questioned Costs: $ Undeterminable Criteria: In accordance with applicable matching, level of effort, earmarking requirements, under Emergency Rental Assistance (ERA) 1, a grantee may use up to 10 percent of the total award amount for direct and indirect administrative costs. Under ERA 2, a grantee may use up to 15% percent of the total award amount for direct and indirect administrative costs and 10 percent of the total award amount for housing stability purposes. Furthermore, 2 CFR 200.303(a) states that the recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the COSO. Condition: The Department of Administration (DOA) was unable to demonstrate and provide evidence of compliance with the applicable earmarking requirement due to closure of the program during the fiscal year and expiration of employment contract of personnel responsible for compliance. Cause: DOA lacks established internal control policies and procedures relating to proper turn-over of documents. Remaining DOA personnel managing the program did not have access to internal files of the Program Coordinator whose employment contract expired. Effect: GovGuam is in noncompliance with applicable matching, level of effort, earmarking requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2024-019, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Matching, Level of Effort, Earmarking Questioned Costs: $ Undeterminable Recommendation: DOA management should establish internal control policies and procedures relating to turnover of documents to ensure that all required and supporting documentation are properly maintained and retained for purposes of demonstrating compliance over applicable matching, level of effort, and earmarking requirements. Views of Responsible Officials: The Agency is reviewing the management of Federal Grants to ensure robust handover and succession plans are in place for future programs. The sudden passing of the ERA Program Coordinator directly impacted overall management of the program.
Finding No.: 2024-020 Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, GovGuam is required to submit quarterly performance report, specifically, ERA Compliance Report (PRA 1505-0270 (ERA 2)). 2 CFR 200.329(a) states that recipient is responsible for the oversight of the Federal award. The recipient must monitor its activities under Federal awards to ensure it is compliant with all requirements and meeting performance expectations. Monitoring by the recipient must cover each program, function, or activity. 2 CFR 329(c)(1) states that recipient must submit performance reports as required by the Federal award. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Grant award terms and conditions state that records shall be maintained by recipient for a period of five years after the period of performance. Condition: For four (or 100%) of four reports tested, records that accumulate and summarize reported data/ key line items such as 1) Administrative Costs Ratio; and 2) Housing Stability Services Ratio were not provided for the following: See the Notes to the SEFA for chart/table. Cause: The Department of Administration (DOA) lacks established internal control policies and procedures relating to proper turn-over of documents. DOA was unable to provide sufficient supporting records to substantiate the reported data/ key line items due to closure of the program during the fiscal year and expiration of employment contract of personnel responsible for compliance with reporting requirements. Additionally, DOA did not maintain records for a period of five years after the period of performance. Finding No.: 2024-020, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.023 Emergency Rental Assistance Federal Award No.: COVID-19 Section 501 of the Consolidated Appropriations Act, 2021 Federal Award No.: COVID-19 Section 3201 of the American Rescue Plan Act, 2021 Area: Reporting Questioned Costs: $0 Effect: We are unable to verify accuracy of reported data/ key line items. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: 2023-014 Recommendation: DOA management should establish internal control policies and procedures over retention of grant-related documents after period of performance for a period specified by the grant terms and conditions. Views of Responsible Officials: The Agency disagrees with this finding. Please refer to a letter dated March 31, 2026, regarding Reports on Compliance September 30, 2024. Auditor’s Response: Our finding remains because we were unable to determine compliance with applicable requirements.
Finding No.: 2024-021 Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Activities Allowed or Unallowed Area: Allowable Cost/Cost Principles Questioned Costs: $7,874 Criteria: In accordance with the applicable activities allowed or unallowed requirements, institutions must demonstrate that costs incurred are allowable under the relevant program legislation, federal awarding agency regulations, and the terms and conditions of the award and consistent with the purpose of the grant. 2 CFR 200.403(a) states that federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and 2 CFR 200.403(g) states that costs should be adequately documented. Conditions: 1. For one (or 3%) of twenty-nine items, aggregating $24,864 of $554,280 in total non-payroll expenditures, vendor invoice was not on file: See the Notes to the SEFA for chart/table. 2. For six (or 55%) of eleven items, aggregating $11,179 of $200,650 in total payroll expenditures, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. For item #s 1 through 4, there were no supporting documents (e.g. timesheet, payroll register, personnel action file) on file to substantiate whether such expenditures were allowable cost of the underlying grant. Finding No.: 2024-021, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Activities Allowed or Unallowed Area: Allowable Cost/Cost Principles Questioned Costs: $7,874 Conditions, continued: For item # 5, there was no labor cost distribution report on file to substantiate whether such expenditure was allowable costs of the underlying grant. For item # 6, payroll register was not on file. Cause: The Department of Administration (DOA) did not enforce monitoring controls over compliance with applicable activities allowed or unallowed and allowable costs/cost principles requirements, specifically, retaining sufficient documentation to support transactions and ensuring expenditures are necessary and reasonable for the performance of the Federal award. Effect: GovGuam is in noncompliance with activities allowed or unallowed and allowable costs/cost principles requirements. The reportable questioned cost is $7,874 based on the items identified in Conditions above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable activities allowed or unallowed and allowable costs/cost principles requirements, specifically, retaining sufficient documentation to support transactions. Views of Responsible Officials: The Agency disagrees with this finding. Please refer to a letter dated March 31, 2026, regarding Reports on Compliance September 30, 2024. Auditor’s Response: Our finding remains because we were unable to determine compliance with applicable requirements.
Finding No.: 2024-022 Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Eligibility Questioned Costs: $2,142 Criteria: In accordance with U.S. Department of the Treasury Homeowner Assistance Fund (HAF): Guidance on Participant Compliance and Reporting Responsibilities dated May 9, 2022, HAF participants are responsible for ensuring funds are used for eligible purposes. Generally, HAF participants must develop and implement policies and procedures, and record retention, to determine and monitor implementation of criteria for determining the eligibility of beneficiaries. HAF participants will need to maintain procedures for obtaining information evidencing a given beneficiary’s eligibility. Condition: For five (or 13%) of forty participants tested, aggregating $23,372 of $547,076 in total participant benefits, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. For item #s 1 and 3, vendor invoices were addressed to an individual different from the participant and there were no additional support to verify the relationship between the participant and the invoice addressee. For item # 2, no documentation was on file to support eligibility determination. For item # 4, documentation that determines the eligibility period (e.g., Approved Continuation of Financial Assistance Request Form) was not on file. For item # 5, documentation of participant’s identification (e.g., government-issued identification), documentation to support whether the participant met the income eligibility requirement (e.g., paystubs, W2s or other wage statements), and documentation that determines the eligibility period (e.g., Approved Continuation of Financial Assistance Request Form) were not on file. Finding No.: 2024-022, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Eligibility Questioned Costs: $2,142 Cause: The Department of Administration (DOA) could not locate records while physical files are currently being scanned and saved electronically due to the closure of the program. Effect: GovGuam is in noncompliance with applicable eligibility requirements. The reportable questioned cost is $2,142 based on the items identified in Condition above. Identification as a Repeat Finding: 2023-015 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable eligibility requirements, specifically, retaining sufficient documentation to support eligibility determination. Views of Responsible Officials: The Agency is reviewing its federal grants management to ensure robust handover and succession plans are in place of future programs.
Finding No.: 2024-023 Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Matching, Level of Effort, Earmarking Questioned Costs: $ Undeterminable Criteria: In accordance with applicable matching, level of effort, earmarking requirements, GovGuam is subject to the following earmarking requirements: a) Counseling or educational efforts by housing counseling agencies approved by Housing and Urban Development (HUD), tribal government (including such efforts by in-house housing counselors who are HUD certified or tribally approved), or legal services, targeted to households eligible to be served with funding from the Homeowner Assistance Fund (HAF) related to foreclosure prevention or displacement, in an aggregate amount up to 5 percent of the funding from the HAF received by the HAF participant. b) Planning, community engagement, needs assessment, and administrative expenses related to the HAF participant’s disbursement of HAF funds for qualified expenses, in an aggregate amount not to exceed 15 percent of the funding from the HAF received by the HAF participant. If the HAF participant has only received the initial 10% of its allocation, no more than 50% of the initial payment is permitted to be used for the expenses mentioned here. c) Participants are providing not less than 60% of funds to homeowners with income less than 100% AMI or 100% of U.S. median income. d) Participants target homeowners that are classified as Socially Disadvantaged Individuals (SDI) and 100 percent AMI or less. Furthermore, 2 CFR 200.303(a) states that the recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the COSO. Condition: The Department of Administration (DOA) was unable to demonstrate and provide evidence of compliance with the applicable earmarking requirement due to closure of the program during the fiscal year and expiration of employment contract of personnel responsible for compliance. Finding No.: 2024-023, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Matching, Level of Effort, Earmarking Questioned Costs: $ Undeterminable Cause: DOA lacks established internal control policies and procedures relating to proper turn-over of documents. Remaining DOA personnel managing the program did not have access to internal files of the Program Coordinator whose employment contract expired. Effect: GovGuam is in noncompliance with applicable matching, level of effort, earmarking requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: DOA management should establish internal control policies and procedures relating to turnover of documents to ensure that all required and supporting documentation is properly maintained and retained for purposes of demonstrating compliance over applicable matching, level of effort, and earmarking requirements. Views of Responsible Officials: The Agency is reviewing its federal grants management to ensure robust handover and succession plans are in place of future programs.
Finding No.: 2024-024 Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, GovGuam is required to submit quarterly financial report (PRA 1505-0269-Quarterly) and annual performance report (PRA 1505-0269). 2 CFR 200.302(a) states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 300.302(b) states that recipient’s financial management system must provide for the following: 1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. 2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in 2 CFR 200.328 and 200.329. 3) 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 200.329(a) states that recipient is responsible for the oversight of the Federal award. The recipient must monitor its activities under Federal awards to ensure it is compliant with all requirements and meeting performance expectations. Monitoring by the recipient must cover each program, function, or activity. Finding No.: 2024-024, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Reporting Questioned Costs: $0 Criteria, continued: Per Homeowner Assistance Fund: Annual Report User Guide October 14, 2022 (Updated October 15, 2025), the annual report required to be submitted during fiscal year 2024 is the annual report with period covered October 1, 2022 through September 30, 2023, which is required to be submitted on or before November 15, 2023. Conditions: 1. For three (or 75%) of four financial reports tested, expenditures reported in the quarterly reports differ from amounts per underlying accounting records and no reconciliation was provided to explain the identified variances, as follows: See the Notes to the SEFA for chart/table. 2. For four (or 100%) of four financial reports tested, records that accumulate and summarize reported data/ key line items such as 1) Administrative Expenses; and 2) Services, Counseling & Education were not provided. 3. The annual report with period covered October 1, 2022 through September 30, 2023, which was required to be submitted on or before November 15, 2023 was not provided. Cause: The Department of Administration (DOA) lacks established internal control policies and procedures relating to proper turn-over of documents. DOA was unable to: 1) provide reconciliation to explain the identified variances; 2) provide sufficient supporting records to substantiate the reported data/ key line items; and 3) unable to provide a copy of the annual report. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2024-024, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Federal Award No.: COVID-19 Section 3206 of the American Rescue Plan Act of 2021 Area: Reporting Questioned Costs: $0 Identification as a Repeat Finding: 2023-016 Recommendation: DOA management should establish internal control policies and procedures over retention of grant-related documents after period of performance for a period specified by the grant terms and conditions. Responsible personnel should review underlying accounting records and perform reconciliation of the required reports. Views of Responsible Officials: The Agency is reviewing its federal grants management to ensure robust handover and succession plans are in place of future programs.
Finding No.: 2024-025 Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Activities Allowed or Unallowed Area: Allowable Cost/Cost Principles Questioned Costs: $5,617,888 Criteria: In accordance with the applicable activities allowed or unallowed requirements, institutions must demonstrate that costs incurred are allowable under the relevant program legislation, federal awarding agency regulations, and the terms and conditions of the award and consistent with the purpose of the grant. 2 CFR 200.403(a) states that federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and 2 CFR 200.403(g) states that costs should be adequately documented. Conditions: 1. For fifteen (or 33%) of forty-six items, aggregating $11,525,386 of $36,042,947 in total non-payroll expenditures, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. Finding No.: 2024-025, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Activities Allowed or Unallowed Area: Allowable Cost/Cost Principles Questioned Costs: $5,617,888 Conditions, continued: For item #s 1 through 13, there were no supporting documents (e.g. purchase order, contract, invoice, payment advice) on file to substantiate whether such expenditures were allowable cost of the underlying grant. For item # 14, except for payment advice, there were no other supporting documents (e.g. purchase order, contract, invoice) on file to substantiate whether such expenditures were allowable cost of the underlying grant. For item # 15, payment advice was not on file. 2. For three (or 30%) of ten items, aggregating $16,236 of $11,409,253 in total payroll expenditures, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. For item # 1, job order number was not indicated in the timesheet, hence, we are unable to ascertain whether such expenditure was allowable cost of the underlying grant. For item # 2, payroll register was unclear or illegible. For item # 3, there were no supporting documents (e.g. timesheet, payroll register, personnel action file) on file to substantiate whether such expenditure was allowable cost of the underlying grant. Cause: The Department of Administration (DOA) did not enforce monitoring controls over compliance with applicable activities allowed or unallowed and allowable costs/cost principles requirements, specifically, retaining sufficient documentation to support transactions and ensuring expenditures are necessary and reasonable for the performance of the Federal award. Finding No.: 2024-025, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Activities Allowed or Unallowed Area: Allowable Cost/Cost Principles Questioned Costs: $5,617,888 Effect: GovGuam is in noncompliance with activities allowed or unallowed and allowable costs/cost principles requirements. The reportable questioned cost is $5,617,888 based on the items identified in Conditions above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable activities allowed or unallowed and allowable costs/cost principles requirements, specifically, retaining sufficient documentation to support transactions. Views of Responsible Officials: The Agency disagrees with this finding. Please refer to a letter dated March 31, 2026, regarding Reports on Compliance September 30, 2024. Auditor’s Response: Our finding remains because we were unable to determine compliance with applicable requirements.
Finding No.: 2024-026 Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Matching, Level of Effort, Earmarking Questioned Costs: $ Undeterminable Criteria: In accordance with 31 CFR Section 35.6(h)(3)(ii), funds used for the projects identified in 31 CFR Section 35.6(h), must supplement, and not supplant, other Federal, State, territorial, Tribal, and local government funds (as applicable) that: (A) in the case of non-Federal funds, have been obligated for activities or projects that are eligible as part of any Surface Transportation project or Title I project, as applicable, or (B) in the case of Federal funds, a Federal agency has committed to a particular project pursuant to an award agreement or otherwise. Condition: Capital outlays during the fiscal year are $3,552,804 and we were unable to determine whether such capital outlays were related to Surface Transportation or Title I projects. Department of Administration (DOA) lacks adequate internal policies and procedures over compliance with the applicable level of effort requirement. Furthermore, DOA was unable to demonstrate and provide evidence of compliance with the level of effort requirement. Cause: DOA was unaware of the level of effort compliance requirement. Effect: GovGuam is in noncompliance with applicable matching, level of effort, earmarking requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: DOA management should consider training responsible personnel managing federal programs to be well informed of the applicable compliance requirements. Also, DOA management should establish internal policies and procedures over compliance with applicable matching, level of effort, earmarking requirements. Finding No.: 2024-026, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Matching, Level of Effort, Earmarking Questioned Costs: $ Undeterminable Views of Responsible Officials: The Agency disagrees with this finding. Please refer to a letter dated March 31, 2026, regarding Reports on Compliance September 30, 2024. Auditor’s Response: Our finding remains because we were unable to determine compliance with applicable requirements.
Finding No.: 2024-027 Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Procurement and Suspension and Debarment Questioned Costs: $ Undeterminable Criteria: 2 CFR 200.302 states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient and subrecipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Moreover, the recipient’s and subrecipient’s financial management system must provide for 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. Condition: Report of all expenditures procured during the fiscal year could not be provided. Furthermore, there is no efficient and effective alternative way of identifying whether or not costs charged to the program were procured during the fiscal year. Cause: The Department of Administration’s (DOA) new financial management system implemented during the fiscal year has no capability to generate a report of all expenditures procured during the fiscal year and expenditure information from the old financial management system are not completely evident from the migrated expenditure information in the new financial management system. Furthermore, there was no efficient alternative way of identifying whether or not costs charged to the program were procured during the fiscal year. Effect: We are unable to make selection of transactions necessary to provide us with sufficient appropriate audit evidence to support an opinion on compliance with procurement and suspension and debarment compliance requirement. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2024-027, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Procurement and Suspension and Debarment Questioned Costs: $ Undeterminable Identification as a Repeat Finding: 2023-017 Recommendation: DOA management should ensure that financial management system in place permits the preparation of report of all expenditures procured during the fiscal year. Views of Responsible Officials: GSA will continue to verify vendor eligibility through SAM.gov prior to contract award. Documentation of the verification will be retained in the procurement file for each transaction. GSA has revised IFB templates to include the required debarment and suspension certification language in accordance with 2 CFR 200.214. Effective immediately, all new contracts will include this clause prior to execution. For local vendors that may not appear in federal systems, GSA will require a debarment and suspension certification as part of the contracting process and maintain this documentation within the procurement record.
Finding No.: 2024-028 Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $ Undeterminable Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity (PTE) must: a) Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). b) Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). c) Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition: There were no executed subaward documents relative to the amount passed through to subrecipient amounting to $5,000,000. Finding No.: 2024-028, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $ Undeterminable Cause: Department of Administration (DOA) management relied on the Executive Order published by the Office of the Governor without establishing subaward agreement to specify applicable terms and conditions of the award. Effect: We are unable to verify compliance with the requirements for subrecipient monitoring. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: 2023-018 Recommendation: DOA management should establish internal policies and procedures regarding monitoring of subrecipients. Views of Responsible Officials: The Agency disagrees with this finding. Please refer to a letter dated March 31, 2026, regarding Reports on Compliance September 30, 2024. Auditor’s Response: Our finding remains because we were unable to determine compliance with applicable requirements.
Finding No.: 2024-029 Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Matching, Level of Effort, Earmarking Questioned Costs: $ Undeterminable Criteria: In accordance with September 2021 U.S. Department of the Treasury Guidance for the Coronavirus Capital Projects Fund (CPF) for States, Territories & Freely Associated States, program administrative costs over the period of performance may not exceed the greater of 5 percent of the total amounts of the grant received under the Capital Projects Fund, or $25,000. The five percent limitation on administrative expenses includes the combined total of indirect costs and direct administrative costs charged to an award. The term “Program Administrative Costs” is defined as the costs of administering the CPF grant funding by a recipient, providing technical assistance to potential subrecipients, and complying with grant administration and audit requirements. Condition: Bureau of Budget and Management Research (BBMR) was unable to demonstrate and provide evidence of compliance with the aforementioned earmarking requirement. Cause: BBMR management did not respond to audit requests in a timely manner. Effect: GovGuam is in noncompliance with applicable matching, level of effort, earmarking requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: BBMR management should establish internal policies and procedures over timely response to audit-related matters. Finding No.: 2024-029, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Matching, Level of Effort, Earmarking Questioned Costs: $ Undeterminable Views of Responsible Officials: The Agency disagrees with this finding. Please refer to a letter dated March 31, 2026, regarding Reports on Compliance September 30, 2024. Auditor’s Response: Our finding remains because we were unable to determine compliance with applicable requirements.
Finding No.: 2024-030 Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, GovGuam is required to submit quarterly performance report, specifically, Project and Expenditure Report for States, Territories & Freely Associated States (PRA 1505-0277). Furthermore, GovGuam is required to submit SF-270, Request for Advance or Reimbursement via Treasury’s reporting portal. Conditions: 1. Bureau of Budget and Management Research (BBMR) was unable to provide a complete listing of SF-270, Request for Advance or Reimbursement reports required to be submitted during the fiscal year. 2. For two (or 100%) of two Project and Expenditure Reports tested, records that accumulate and summarize reported data/ key line items such as 1) Obligations and Expenditures; 2) Administrative Expenses; and 3) for Multi-Purpose Community Facility Projects, Square Footage funded by CPF/Reported, were not provided for the following : See the Notes to the SEFA for chart/table. Cause: BBMR management did not respond to audit requests in a timely manner. Effect: We are unable to verify accuracy of reported data/ key line items of performance reports. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: 2023-019 Recommendation: BBMR management should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain a monitoring of financial reports required to be submitted during the fiscal year. Furthermore, BBMR management should establish internal policies and procedures over timely response to audit-related matters. Finding No.: 2024-030, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Reporting Questioned Costs: $0 Views of Responsible Officials: BBMR will work with DOA to make sure reports are submitted on time. BBMR will also retain documentation of submitted reports.
Finding No.: 2024-031 Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Subrecipient Monitoring Questioned Costs: $ Undeterminable Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity (PTE) must: a) Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). b) Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). c) Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Furthermore, per September 2021 U.S. Department of the Treasury Guidance for the Coronavirus Capital Projects Fund for States, Territories & Freely Associated States, it states that recipients are responsible for monitoring and overseeing subrecipients’ use of funds and other activities related to the award to ensure that the subrecipient complies with the statutory and regulatory requirements and the terms and conditions of the award. Recipients remain responsible for reporting to U.S. Department of the Treasury on their subrecipients’ use of funds. Condition: Schedule of subrecipient(s) and copies of related subaward documents including the terms and conditions of the subaward(s) were not provided during the audit. Total amount passed through to subrecipients during the fiscal year is $4,110,914. Finding No.: 2024-031, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.029 Coronavirus Capital Projects Fund Federal Award No.: COVID-19 42 U.S.C. Section 804(b)(1)(B) Area: Subrecipient Monitoring Questioned Costs: $ Undeterminable Cause: Bureau of Budget and Management Research (BBMR) management did not respond to audit requests in a timely manner. Effect: We are unable to verify compliance with the requirements for subrecipient monitoring. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: 2023-020 Recommendation: BBMR management should establish internal policies and procedures over timely response to audit-related matters. Views of Responsible Officials: BBMR will create Standard Operating Procedures as well as a checklist, to assist in the monitoring of subrecipient compliance.
Finding No.: 2024-032 Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants for the Insular Areas - Program Support Area: Activities Allowed or Unallowed Area: Allowable Cost/Cost Principles Questioned Costs: $11,154 Criteria: In accordance with the applicable activities allowed or unallowed requirements, institutions must demonstrate that costs incurred are allowable under the relevant program legislation, federal awarding agency regulations, and the terms and conditions of the award and consistent with the purpose of the grant. 2 CFR 200.403(a) states that federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and 2 CFR 200.403(g) states that costs should be adequately documented. Condition: For 16 (or 67%) of twenty-four items, aggregating $19,823 of $3,526,794 in total payroll expenditures, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. For item #s 1 through 15, there were no supporting documents (e.g. timesheet, payroll register, personnel action file) on file to substantiate whether such expenditures were allowable cost of the underlying grant. Finding No.: 2024-032 continued Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants for the Insular Areas - Program Support Area: Activities Allowed or Unallowed Area: Allowable Cost/Cost Principles Questioned Costs: $11,154 Condition, continued: For item # 16, we were unable to trace the amount tested against the provided supporting documentation. Cause: The Department of Administration (DOA) did not enforce monitoring controls over compliance with applicable activities allowed or unallowed and allowable costs/cost principles requirements, specifically, retaining sufficient documentation to support transactions and ensuring expenditures are necessary and reasonable for the performance of the Federal award. Effect: GovGuam is in noncompliance with activities allowed or unallowed and allowable costs/cost principles requirements. The reportable questioned cost is $11,154 based on the items identified in Condition above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable activities allowed or unallowed and allowable costs/cost principles requirements, specifically, retaining sufficient documentation to support transactions. Views of Responsible Officials: Request to DOA will require immediate collaboration between Guam EPA and DOA to gather, reconcile, and provide all documentation supporting compliance of allowable costs incurred during the federal award period of performance as specified in the terms and conditions of the federal award or in the approved extension.
Finding No.: 2024-033 Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants for the Insular Areas - Program Support Federal Award No.: M00906319 Area: Cash Management Questioned Costs: $333,147 Criteria: 2 CFR 200.305 states that payments for States are governed by Treasury-State Cash Management Improvement Act (CMIA) agreements and by default procedures codified at 31 CFR 205. Subpart A of regulations at 31 CFR Part 205 requires state recipients to enter into Treasury-State Agreements (TSA) that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing that meet the funding threshold for a major federal assistance program under the CMIA. Programs not covered by a TSA are subject to procedures prescribed by U.S. Department of the Treasury in Subpart B of 31 CFR Part 205. 31 CFR 205.12(b)(5) states that reimbursable funding means that a Federal Program Agency transfers Federal funds to a State after that State has already paid out the funds for Federal assistance program purposes. Condition: ALN 66.600 is not covered by a TSA and Department of Administration (DOA) management represents that the program is funded on a reimbursement basis For two (or 40%) of five items, aggregating $433,893 of $3,129,853 in total cash drawdowns during the year, no detailed listing of expenditures supporting the following drawdowns during the year was on file to ascertain whether the expenditures were incurred prior to the date of the reimbursement request: See the Notes to the SEFA for chart/table. Finding No.: 2024-033, continued Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants for the Insular Areas - Program Support Federal Award No.: M00906319 Area: Cash Management Questioned Costs: $333,147 Cause: DOA management did not respond to audit requests in a timely manner. Effect: We are unable to make selection of transactions necessary to provide us with sufficient appropriate audit evidence to support an opinion on compliance with cash management compliance requirements. The reportable questioned cost is $333,147 based on the item identified in Condition above. Recommendation: DOA management should establish internal policies and procedures over timely response to audit-related matters. Views of Responsible Officials: Request to DOA will require immediate collaboration between Guam EPA and DOA, as all Guam EPA reimbursement requests are accompanied by the FGIA balance report and, currently, the GFMIS expenditure reports.
Finding No.: 2024-034 Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants for the Insular Areas - Program Support Federal Award No.: M00906324 Area: Period of Performance Questioned Costs: $4,248 Criteria: In accordance with applicable period of performance (POP) requirements, a State may only charge allowable costs incurred during a federal award’s period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: For seven (or 39%) of eighteen items, aggregating $13,989 of $922,464 of expenditures subjected to period of performance test, compliance with period of performance could not be determined as supporting documents (e.g., invoices, receipts, or time logs, check payment, etc.) were not made available for examination: See the Notes to the SEFA for chart/table. Cause: The Department of Administration (DOA) had limited staffing and resources during the review period that may have hindered the ability to obtain and compile documentation from Guam Environmental Protection Agency (GEPA), resulting in incomplete audit submissions. Effect: GovGuam is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $4,248 based on the item identified in Condition above. Finding No.: 2024-034, continued Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants for the Insular Areas - Program Support Federal Award No.: M00906324 Area: Period of Performance Questioned Costs: $4,248 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements, specifically, ensuring all supporting documentation is on file. Views of Responsible Officials: Request to DOA will require immediate collaboration between Guam EPA and DOA to gather, reconcile, and provide all supporting documentation to support compliance with the period of performance in question.
Finding No.: 2024-035 Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants for the Insular Areas - Program Support Federal Award No.: M00906319 ; M00906324 Area: Program Income Questioned Costs: $ Undeterminable Criteria: 2 CFR section 200.307(a) states that program income must be used for the original purpose of the Federal award. Program income earned during the period of performance may only be used for costs incurred during the period of performance or allowable closeout costs. 2 CFR section 200.307(b) states that there are three methods of applying program income: deduction; addition; and cost-sharing. Addition is when program income is added to the total allowable costs, increasing the overall total amount of the Federal award. Applicable Cooperative Agreement Programmatic Conditions states that: (1) the recipient is authorized to retain program income earned during the project period; (2) the program income shall be added to funds committed to the project by EPA and used for the purposes and under the conditions of the assistance agreement; and (3) the recipient must provide as part of its semi-annual and annual and final performance report, a description of how program income is being used. Further, a report on the amount of program income earned during the award period must be submitted with the semi-annual and annual and final Federal Financial Report, Standard Form 425. Condition: Recording and use of program income is not monitored. Specifically, collections of program income are recorded in a special revenue fund, along with other non-program income related transactions, and identification of program income that relates to a specific federal award could not be performed. We could not determine whether program income earned during the federal award’s period of performance was used only for costs incurred during the period of performance or for the purposes and under the conditions of the assistance agreement. Further, records which account for program income and specify how program income has been used was not provided. Finding No.: 2024-035, continued Federal Agency: U.S. Environmental Protection Agency AL Program: 66.600 Environmental Protection Consolidated Grants for the Insular Areas - Program Support Federal Award No.: M00906319 ; M00906324 Area: Program Income Questioned Costs: $ Undeterminable Cause: Guam Environmental Protection Agency (GEPA) did not monitor compliance with applicable program income requirements. Effect: GovGuam is in noncompliance with applicable program income requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: 2023-022 Recommendation: Responsible personnel should monitor the recording and use of program income. Views of Responsible Officials: Guam EPA has implemented processes relevant to the monitoring and reconciliation of program income. As part of our Correction Action for the FY2023 audit, which is a repeat finding in FY2024, Guam EPA is attaching a sample report of all program income collected through the Transaction Processing System (TPS) to include external payments received by DOA. Also, variances not captured by this report, consisting of payments/transactions submitted directly to DOA via electronic method of payments, are being reconciled by our staff and DOA.
Finding No.: 2024-036 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Cash Management Questioned Costs: $113,143 Criteria: 2 CFR 200.305 states that payments for States are governed by Treasury-State Cash Management Improvement Act (CMIA) agreements and by default procedures codified at 31 CFR 205. Subpart A of regulations at 31 CFR Part 205 requires state recipients to enter into Treasury-State Agreements (TSA) that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing that meet the funding threshold for a major federal assistance program under the CMIA. Programs not covered by a TSA are subject to procedures prescribed by U.S. Department of the Treasury in Subpart B of 31 CFR Part 205. 31 CFR 205.12(b)(5) states that reimbursable funding means that a Federal Program Agency transfers Federal funds to a State after that State has already paid out the funds for Federal assistance program purposes. Condition: ALN 93.323 is not covered by a TSA and Department of Administration (DOA) management represents that the program is funded on a reimbursement basis For fourteen (or 35%) of forty items tested, aggregating $182,079 of $4,540,455 in total cash drawdowns during the year, supporting documentations (e.g., timesheet, payroll register, vendor invoice, check payment) to ascertain whether the expenditures were incurred prior to the date of the reimbursement request were not provided. Finding No.: 2024-036, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Cash Management Questioned Costs: $113,143 Condition, continued: See the Notes to the SEFA for chart/table. Cause: DOA had limited staffing and resources during the review period that may have hindered the ability to obtain and compile documentation from DPHSS, resulting in incomplete submissions. Effect: GovGuam is in noncompliance with applicable cash management requirements. The reportable questioned cost is $113,143 based on the item identified in Condition above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable cash management requirements, specifically, ensuring all supporting documentation is on file. Finding No.: 2024-036, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Cash Management Questioned Costs: $113,143 Views of Responsible Officials: The Federal and Compliance section will establish a Standard Operating Procedure for drawdowns. As well as, conducting drawdowns daily to minimize the time between the drawdowns of federal funds and the disbursement for federal program purposes.
Finding No.: 2024-037 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $ Undeterminable Criteria: In accordance with 2 CFR 200.313(b), a State must use, manage and dispose of equipment acquired under a Federal award in accordance with State laws and procedures. 2 CFR 200.313(d) states that regardless of whether equipment is acquired in part or its entirety under the Federal award, the recipient must manage equipment (including replacement equipment) utilizing procedures that meet the following requirements: (1) Property records must include a description of the property, a serial number or another identification number, the source of funding for the property (including the 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. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property. (2) A physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years. (3) A control system must be in place to ensure safeguards for preventing property loss, damage, or theft. Any loss, damage, or theft of equipment must be investigated. The recipient or subrecipient must notify the Federal agency or pass-through entity of any loss, damage, or theft of equipment that will have an impact on the program. (4) Regular maintenance procedures must be in place to ensure the property is in proper working condition. (5) If the recipient or subrecipient is authorized or required to sell the property, proper sales procedures must be in place to ensure the highest possible return. Furthermore, 2 CFR 200.303(a) states that the recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the COSO. Finding No.: 2024-037, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $ Undeterminable Conditions: 1. Department of Public Health and Social Services (DPHSS) lacks adequate internal policies and procedures over compliance with the applicable federal property rules and regulations. 2. DPHSS’s capital asset records do not meet the criteria above and certain sources of funding for the property (including the FAIN) information are missing. Furthermore, some assets purchased in prior years (e.g., 2020 through 2023) are tagged as “New”. 3. DPHSS’s most recent comprehensive physical inventory of its property was in January 2016; however, the required reconciliation was not completed. As of September 30, 2024, the required biannual physical inventory and reconciliation were not performed. 4. As capital asset records are not effectively maintained, it does not appear that DPHSS has effectively developed means to adequately safeguard capital assets from loss, damage, or theft, or to reasonably investigate such occurrences. We are unable to assess the overall cumulative monetary value of these deficiencies. However, the table below summarizes total capital outlays over the past five years. See the Notes to the SEFA for chart/table. Cause: The processes over inventory, maintenance and reconciliation of capital assets are not routine. DPHSS requires more funding and human resources to fully implement and develop a useful capital asset management system. Effect: GovGuam is in noncompliance with applicable equipment and real property management requirements. The underlying capital outlays are not considered questioned costs, as we are unable to quantify the extent of noncompliance. Finding No.: 2024-037, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $ Undeterminable Identification as a Repeat Finding: 2023-026 Recommendation: DPHSS should complete the required biannual physical inventory and reconciliations and should consider developing a more detailed corrective action plan with timetables for completing planned actions, such as processing required reconciliations and reports, training personnel and coordinating with other governmental units on property management requirements. Views of Responsible Officials: Implementation of a Fixed Assets Module as part of the new FMIS system that will help automate the tracking and reporting of Capital assets, is near completion with final testing in progress. DOA will update the SOP for the Fixed Assets for capital asset reporting accordingly. Review of Assets acquired in FY2024 was completed, with FY2025 in progress. As noted previously, the process is hampered by difficulties in recruiting personnel.
Finding No.: 2024-038 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Period of Performance Questioned Costs: $16,668 Criteria: In accordance with applicable period of performance (POP) requirements, a State may only charge allowable costs incurred during a federal award’s period of performance as specified in the terms and conditions of the federal award or in the approved extension. Conditions: 1. For four (or 67%) of six items, aggregating $24,122 of $44,823 of expenditures subjected to period of performance test, compliance with period of performance could not be determined as supporting documents (e.g., time logs, check payment, etc.) were not made available for examination: See the Notes to the SEFA for chart/table. 2. Underlying grant agreements related to the following federal award# were subsequently provided and compliance with period of performance of expenditures could not be determined: See the Notes to the SEFA for chart/table. Finding No.: 2024-038, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Period of Performance Questioned Costs: $16,668 Cause: The Department of Administration (DOA) had limited staffing and resources during the review period that may have hindered the ability to obtain and compile documentation from DPHSS, resulting in incomplete audit submissions. Effect: GovGuam is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $16,668 based on the items identified in Condition #1 above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements, specifically, ensuring all supporting documentation is on file. Views of Responsible Officials: DPHSS ELC Program disagrees with the findings. Condition 1: The questioned labor costs of $16,668 align with payment of Core funded staff during that approved budget period for BP01. The PPE coincides with two draws for the ending and beginning of those fiscal years. Supporting documents were submitted twice, once on February 9, 2026, and February 20, 2026, including the Notice of Award (NOA) for this grant with issue date of July 9, 2024. Condition 2: The question of compliance with period of performance was justified through supporting documentations as reflected in the NOAs and extensions of NOAs which were provided twice February 9, 2026 and February 23, 2026. Program also noted that core funds have expanded authority to be utilized in subsequent budget periods throughout the 5-year cycle of the Cooperative Agreement. Upon auditor’s review, a correspondence email noted that the documents were received and findings were removed for all but on expense. Although all supporting NOAs were submitted for every expenditure amount, a follow up email with the last NOA for 6NU50CK000561-05-00 was provided again as an attachment. Finding No.: 2024-038, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Period of Performance Questioned Costs: $16,668 Auditor’s Response: Condition1: Our finding remains because documents subsequently received by auditors on February 10, 2026 from DOA were insufficient or incomplete to substantiate compliance with period of performance. Condition 2: Although grant agreements were subsequently provided, our finding remains based on the agreed timeline with DOA. We were unable to proceed or perform further testing on the expenditures related to federal awards cited in the condition above. Therefore, we were unable to determine compliance with applicable requirements.
Finding No.: 2024-039 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $980,252 Criteria: 2 CFR 180.300 requires entities entering into a covered transaction with another person at the next lower tier to verify that the person with whom they intend to do business is not excluded or disqualified. Such verification can be made by (a) checking SAM.gov Exclusions, or (b) collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. 2 CFR 180.220 (b) (1) states that a contract for goods and services is a covered transaction if the contract is awarded by a participant in a nonprocurement transaction covered under 2 CFR 180.210, and the contract amount is expected to equal or exceed $25,000. 2 CFR 200.302 states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient and subrecipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Moreover, the recipient’s and subrecipient’s financial management system must provide for 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. Conditions: 1. For thirteen (or 62%) of twenty-one items, aggregating $1,042,567 of $1,799,849 of expenditures subjected to procurement and suspension and debarment test, we noted the following: See the Notes to the SEFA for chart/table. Finding No.: 2024-039, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $980,252 Conditions, continued: See the Notes to the SEFA for chart/table. For item #s 1 through 4, the General Services Agency (GSA) represented that it performed verification of suspension or debarment from SAM.gov. However, no formal documentation is kept on file to demonstrate compliance at the time of procurement. For items #s 5 through 13, we noted noncompliance with applicable procurement policies and procedures due to various reasons, such as expired procurement contracts, unclear procurement method followed, and lack of rationale for vendor selection. 2. Three initially tested samples were later determined to be procured in prior years and are not procurements during fiscal year 2024. Consequently, remaining samples tested were insufficient to satisfy the minimum number of items to test. Cause: DOA’s new financial management system implemented during the fiscal year has no capability to generate a report of all expenditures procured during the fiscal year and expenditure information from the old financial management system are not completely evident from the migrated expenditure information in the new financial management system, hence, there was difficulty in establishing population that will be subjected to procurement and suspension and debarment test. As there was no efficient alternative way of identifying whether or not costs charged to the program were procured during the fiscal year, and due to the timing of the audit and lack of staffing resources, DOA was unable to provide the procurement files of selected transactions by the agreed audit timeline. Finding No.: 2024-039, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $980,252 Cause, continued: This limitation necessitated repeated replacement of sample selections to meet the minimum sample size required for testing. DOA also does not have a formal policy requiring documentation of procedures performed to verify that the person in a covered transaction with whom they intend to do business is not excluded or disqualified. Effect: GovGuam is in noncompliance with applicable procurement and suspension and debarment requirements. The reportable questioned cost is $980,252 based on the items identified in Condition #1 above. Identification as a Repeat Finding: 2023-027 Recommendation: DOA management should ensure that financial management system in place permits the preparation of report of all expenditures procured during the fiscal year. Responsible personnel should ensure that documentation is adequate to comply with the applicable procurement requirements. Specifically, documentation should indicate the history of procurement, including the solicitation process and rationale for contractors or vendor selection. DOA management should establish formal policy requiring retaining documentation of procedures performed to verify that the person in a covered transaction with whom they intend to do business is not excluded or disqualified Views of Responsible Officials: GSA will continue to verify vendor eligibility through SAM.gov prior to contract award. Documentation of the verification will be retained in the procurement file for each transaction. GSA has revised IFB templates to include the required debarment and suspension certification language in accordance with 2 CFR 200.214. Effective immediately, all new contracts will include this clause prior to execution. Finding No.: 2024-039, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Area: Procurement and Suspension and Debarment Questioned Costs: $980,252 Views of Responsible Officials, continued: For local vendors that may not appear in federal systems, GSA will require a debarment and suspension certification as part of the contracting process and maintain this documentation within the procurement record.
Finding No.: 2024-040 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Area: Activities Allowed or Unallowed Area: Allowable Cost/Cost Principles Questioned Costs: $3,005 Criteria: In accordance with the applicable activities allowed or unallowed requirements, institutions must demonstrate that costs incurred are allowable under the relevant program legislation, federal awarding agency regulations, and the terms and conditions of the award and consistent with the purpose of the grant. 2 CFR 200.403(a) states that federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and 2 CFR 200.403(g) states that costs should be adequately documented. Condition: For four (or 11%) of thirty-eight items, aggregating $45,527 of $32,818,949 in total non-payroll expenditures, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. For item #s 1 through 3, these pertain to transactions migrated from AS400 to D365 system. We were unable to determine whether such expenditures were allowable cost of the underlying grants. We were unable to trace the selected sample to the supporting documents since selected samples could not be traced to AS400 due to insufficient identifier in the migrated information. For item # 4, there was no vendor invoice or other supporting documents on file to substantiate whether such expenditure was allowable costs of the underlying grant. Finding No.: 2024-040, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Area: Activities Allowed or Unallowed Area: Allowable Cost/Cost Principles Questioned Costs: $3,005 Cause: The Department of Administration (DOA) did not enforce monitoring controls over compliance with applicable activities allowed or unallowed and allowable costs/cost principles requirements, specifically, retaining sufficient documentation to support transactions and ensuring expenditures are necessary and reasonable for the performance of the Federal award. Additionally, migrated information from AS400 to D355 was incomplete. Effect: GovGuam is in noncompliance with activities allowed or unallowed and allowable costs/cost principles requirements. The reportable questioned cost is $3,005 based on the items identified in Condition above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable activities allowed or unallowed and allowable costs/cost principles requirements, specifically, retaining sufficient documentation to support transactions. Views of Responsible Officials: The Bureau of Child Care Services (BCCS) disagrees with this finding. The questioned transactions relate to a major system migration from the AS400 to the D365 system, which temporarily impacted the traceability of certain records. During this transition, some data identifiers were reformatted to fit the new system's structure. However, this was a synchronization issue rather than a lack of oversight, and BCCS maintains that all costs are allowable, necessary, and reasonable under CCDF requirements. Supporting documents exist and were provided after a subsequent request on February 9, 2026, via One Drive link. Auditor’s Response: Our finding remains because we were unable to determine compliance with applicable requirements. We did not receive subsequent submissions or other documentations to resolve findings cited in the condition above.
Finding No.: 2024-041 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Eligibility Questioned Costs: $638,831 Criteria: 45 CFR 98.20(a) states that to be eligible for services under 45 CFR 98.50, a child shall, at the time of eligibility determination or redetermination: (1) (i) Be under 13 years of age; or, (ii) At the option of the Lead Agency, be under age 19 and physically or mentally incapable of caring for himself or herself, or under court supervision; (2) (i) Reside with a family whose income does not exceed 85 percent of the State’s median income (SMI), which must be based on the most recent SMI data that is published by the Bureau of the Census, for a family of the same size; and (ii) Whose family assets do not exceed $1,000,000 (as certified by such family member); and (3) (i) Reside with a parent or parents who are working or attending a job training or educational program; or (ii) Receive, or need to receive, protective services, which may include specific populations of vulnerable children as identified by the Lead Agency, and reside with a parent or parents other than the parent(s) described in paragraph (a)(3)(i) of this section. 45 CFR 98.68(c) states that Lead Agencies must describe in their Plan the procedures that are in place for documenting and verifying that children receiving assistance under this part meet eligibility criteria at the time of eligibility determination and redetermination. Child Care and Development Plan for Guam 2022-2024 states that: 1) Guam requires identity verification of each applicant. Acceptable documentary evidence may include, but is not limited to, drivers’ license, work or school ID, birth certificate, passport, social security card or permanent residency card. 2) Guam requires verification of the applicant’s relationship to the child. Acceptable documentary evidence of relationship may include, but is not limited to, birth certificate or legal document establishing power of attorney, and guardianship or in loco parentis. 3) Guam requires a child to be a U.S. citizen or child of a qualified alien. Acceptable documentary evidence may include, but is not limited to, birth certificate, US Passport, US Naturalization Papers, Permanent Residency Card, INS Form 151 or I-551, INS Form I-94, and social security card. Finding No.: 2024-041, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Eligibility Questioned Costs: $638,831 Criteria, continued: 4) Guam verifies family income by checking documentary evidence of income of all members of the household unit which may include, but is not limited to, employment check stubs from the previous two months, tax statements, and by checking online income resources. 5) Guam verifies household composition by checking documentary evidence which may include, but is not limited to, Mayor’s verification and Guam Housing and Urban Renewal Authority documentation. 6) Guam will verify work as the qualifying activity by checking documentary evidence which may include, but is not limited to, employment check stubs from the previous two months, tax statements, JOBS Works or employer verification. 7) Guam verifies job training or educational program by checking documentary evidence which may include, but is not limited to training or education verification, class schedule, job or education training enrollment forms. 45 CFR 98.45(a) states that the Lead Agency shall certify that the payment rates for the provision of child care services under this part are sufficient to ensure equal access, for eligible families in the area served by the Lead Agency, to child care services comparable to those provided to families not eligible to receive CCDF assistance or child care assistance under any other Federal, State, or tribal programs. In accordance with the conditions and requirements for the Early Childhood Workforce Retention Grant, applicants from Child Care Development Fund Childcare Facility must be on the latest staffing pattern submitted to the Bureau of Child Care Services. Additionally, in accordance with Early Childhood Workforce Retention Grant Fact Sheet, applicants from private school institutions must be accredited by private school. Pub. L. No. 117–2 Section 2202(a)(2)(B) states that eligible child care provider means a child care provider that is licensed, regulated, or registered in the State, territory, or Indian Tribe on the date of enactment of this Act and meets applicable State and local health and safety requirements. In accordance with Child Care and Development Plan for Guam 2022-2024, as part of the health and safety standards and other requirements prior to the receipt of any CCDF funds, child care providers must meet the minimum 15 hours of ongoing training required annually. Finding No.: 2024-041, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Eligibility Questioned Costs: $638,831 Criteria, continued: Pub. L. No. 117–2 Section 2202(d)(2)(D)(i)(II) states that the lead agency shall make available on the lead agency’s website an application for qualified child care providers that includes certifications that, for the duration of the subgrant, for each employee, the provider will pay not less than the full compensation, including any benefits, that was provided to the employee as of the date of submission of the application for the subgrant (referred to in this subclause as “full compensation”), and will not take any action that reduces the weekly amount of the employee’s compensation below the weekly amount of full compensation, or that reduces the employee’s rate of compensation below the rate of full compensation, including the involuntary furloughing of any employee employed on the date of submission of the application for the subgrant. Conditions: For fifty-two (or 37%) of one hundred forty-one items, aggregating $2,846,246 of $32,484,704 in total participant benefits, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. Finding No.: 2024-041, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Eligibility Questioned Costs: $638,831 Conditions, continued: a. Eligibility for Children Receiving CCDF Subsidies See the Notes to the SEFA for chart/table. For item #s 1 through 10, no case folder was maintained on file to support eligibility determination. For item #s 11 and 21 through 23, the benefit paid exceeded the maximum cost per child care directory for licensed childcare providers. For item #s 13 through 15 and 17 through 20, documentation that substantiates the relationship of the applicant to the child was not on file. For item # 15, documentation of applicant’s identification was not on file. For item #s 13 through 15 and 17 through 18, documentation that determines whether the child is a U.S. citizen or a child of a qualified alien was not on file. For item #s 11 through 12, documentation to support whether the applicant met the income eligibility requirement and documentation to support applicant’s household size were not on file. For item # 11, documentation to support applicant’s need for childcare was not on file. For item #s 11 and 13 through 16, the Notice of Action and Child Care Certificate were not provided to substantiate the certification period of the claimant. Finding No.: 2024-041, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Eligibility Questioned Costs: $638,831 Conditions, continued: b. Eligibility for Other Beneficiaries Receiving CCDF Subsidies Determined by Guam Economic Development Authority See the Notes to the SEFA for chart/table. For item #s 24 through 40, beneficiaries were not included in the staffing pattern submitted to the Bureau of Child Care Services. Additionally, for those employed in private schools, there were no documentation provided to support that beneficiaries were accredited by private school. Finding No.: 2024-041, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Eligibility Questioned Costs: $638,831 Conditions, continued: c. Eligibility for Child Care Providers Receiving CCDF ARP Act Stabilization Funds See the Notes to the SEFA for chart/table. For item #s 41 through 52, child care provider’s application did not include certification that the child care provider will pay at least the same amount in weekly wages and maintain the same benefits for the duration of the stabilization funding. For item #s 43, 45, and 49, documentation that determines whether participant has met the 15-hour health and safety training requirement was not on file. For item #s 41 through 44, 46 through 47, and 49 through 52, either incomplete or no supporting documentation was on file to support eligibility determination. Cause: The Department of Public Health and Social Services (DPHSS) did not enforce monitoring controls over compliance with applicable eligibility requirements, specifically, retaining sufficient documentation to support eligibility determination. Finding No.: 2024-041, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Eligibility Questioned Costs: $638,831 Effect: GovGuam is in noncompliance with applicable eligibility requirements. The reportable questioned cost is $638,831 based on the items identified in Conditions above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable eligibility requirements, specifically, retaining sufficient documentation to support eligibility determination. Views of Responsible Officials: The Bureau of Child Care Services (BCCS) disagrees with this finding. Eligibility determinations were conducted in accordance with federal and local requirements. The exceptions noted are due to a subsequent request received by BCCS on January 20, 2026, and consequently responded to on January 29, 2026. Additional supporting documents were provided on February 9, 2026. Certain payment variances reflect allowable program exceptions. Auditor’s Response: Our finding remains because documents subsequently received by auditors on February 10, 2026 from DOA through the EY portal are insufficient or incomplete to substantiate compliance with eligibility.
Finding No.: 2024-042 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Area: Matching, Level of Effort, Earmarking Questioned Costs: $1,828,343 Criteria: 45 CFR 98.50(b) states that of the aggregate amount of funds expended by a State or Territory (i.e., Discretionary, Mandatory, and Federal and State share of Matching funds): (1) No less than nine percent shall be used for activities designed to improve the quality of child care services and increase parental options for, and access to, high-quality child care as described at 45 CFR 98.53; and (2) No less than three percent shall be used to carry out activities at 45 CFR 98.53(a)(4) as such activities relate to the quality of care for infants and toddlers. 45 CFR 98.50(d) states that of the aggregate amount of funds expended (i.e., Discretionary, Mandatory, and Federal and State share of Matching Funds), no more than five percent may be used for administrative activities as described at 45 CFR 98.54. 45 CFR 98.50(e) states that not less than seventy percent of the State and Territory Mandatory and Federal and State share of State Matching Funds shall be used to meet the child care needs of families who: (1) Are receiving assistance under a State program under Part A of title IV of the Social Security Act; (2) Are attempting through work activities to transition off such assistance program; and (3) Are at risk of becoming dependent on such assistance program. Conditions: 1. For the quarter ended 09/30/2024, Department of Public Health and Social Services (DPHSS) did not meet the minimum spending for activities designed to improve the quality of child care services and increase parental options for, and access to, high-quality child care as described at 45 CFR 98.53: See the Notes to the SEFA for chart/table. Finding No.: 2024-042, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Area: Matching, Level of Effort, Earmarking Questioned Costs: $1,828,343 Conditions, continued: 2. For the quarter ended 09/30/2024, DPHSS did not meet the minimum spending for activities related to the quality of care for infants and toddlers as follows: See the Notes to the SEFA for chart/table. 3. For the quarter ended 09/30/2024, DPHSS expended more than five percent for administrative activities as follows: See the Notes to the SEFA for chart/table. Finding No.: 2024-042, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Area: Matching, Level of Effort, Earmarking Questioned Costs: $1,828,343 Conditions, continued: 4. For the quarter ended 09/30/2024, DPHSS did not meet the minimum spending to meet the child care needs of families mentioned in the above criteria: See the Notes to the SEFA for chart/table. Cause: DPHSS did not effectively monitor compliance with applicable earmarking requirements. Effect: GovGuam is in noncompliance with applicable earmarking requirements. The reportable questioned cost is $1,828,343 based on the items identified in Conditions above. Identification as a Repeat Finding: 2023-028 Recommendation: DPHSS management should strengthen monitoring controls over compliance with applicable earmarking requirements. Views of Responsible Officials: The Bureau of Child Care Services (BCCS) disagrees with this finding and maintains that it has enhanced monitoring controls to ensure compliance with all applicable earmarking requirements. BCCS reports expenditures on a cumulative basis until the grant’s liquidation end date. This reporting structure provides the necessary flexibility to reconsolidate cost categories, ensuring that final totals align with mandated spending thresholds by the end of the grant period. Finding No.: 2024-042, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Area: Matching, Level of Effort, Earmarking Questioned Costs: $1,828,343 Views of Responsible Officials, continued: Furthermore, BCCS maintains that Quality Rating and Improvement System (QRIS) initiatives and other quality-enhancing activities were actively conducted throughout the performance period. To ensure a thorough reconciliation of these expenditures, BCCS formally requests the supporting documentation and specific sample set used by the auditors to conclude that these activities were not sufficiently documented or performed. We are prepared to provide evidence of these programmatic activities to demonstrate compliance with earmarking requirements. Auditor’s Response: Our finding remains. The amount of total expenditures and actual spending reflected in the cited conditions above are obtained from auditee’s internally prepared ACF-696, Child Care and Development Fund Financial Reports.
Finding No.: 2024-043 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, GovGuam is required to submit quarterly ACF-696, Child Care and Development Fund Financial Report (OMB No. 0970-0510). These reports are required instead of the SF-425, Federal Financial Report. Each fiscal year’s expenditure report must be separate; therefore, multiple reports are required if awards from more than one fiscal year are expended in a given quarter. Condition: We noted variances between the expenditures reported in ACF-696 against the underlying accounting records as summarized below: See the Notes to the SEFA for chart/table. Cause: The Department of Public Health and Social Services (DPHSS) did not ensure accurate data entry to comply with applicable reporting requirements. Effect: GovGuam is in noncompliance with applicable reporting requirements. No questioned cost is reported because we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: Finding 2023-030 Recommendation: DPHSS management should enforce monitoring controls over compliance with reporting requirements. Responsible personnel should review underlying accounting records and perform reconciliation of the required reports. Finding No.: 2024-043, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF Area: Reporting Questioned Costs: $0 Views of Responsible Officials: The Bureau of Child Care Services (BCCS) disagrees with this finding. BCCS maintains that it enforces strict monitoring controls over compliance with reporting requirements and that the variances noted are not a result of inaccurate data entry but that is due to the cumulative reporting until the end of the grant period. BCCS’ ACF-696 quarterly reports are reported cumulatively through the grant's liquidation end date, and any quarterly reported variances are reconciled by the end of the grant period. During a Reporting Walkthrough meeting with Ernst & Young Senior Auditor, on November 17, 2025, BCCS discussed detailed reporting requirements, processes, and procedures. During this meeting, the agency communicated how responsible personnel review accounting records and perform the reconciliation of required reports. Auditor’s Response: Our finding remains because there was no evidence provided during the time of the audit to support that the unreconciled variance, cited in the condition above, was due to timing difference or cumulative reporting.
Finding No.: 2024-044 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Special Tests and Provisions - Health and Safety Requirements Questioned Costs: $3,726,391 Criteria: 45 CFR 98.41(a) states that each Lead Agency shall certify that there are in effect, within the State (or other area served by the Lead Agency), under State, local or tribal law, requirements that are designed, implemented, and enforced to protect the health and safety of children. Such requirements must be applicable to childcare providers of services for which assistance is provided under this part. Such requirements, which are subject to monitoring pursuant to 45 CFR 98.42, shall: (1) Include health and safety topics; and (2) Include minimum health and safety training on the topics above, as described in 45 CFR 98.44. In accordance with the Child Care Development Fund (CCDF) State Plan, Section 5.3 Health and Safety Standards and Training for CCDF Providers, all licensed and license-exempt child care providers must be able to demonstrate compliance with Guam Public Law 31-73, which outlines certain home/facility conditions, as part of the health and safety standards and other requirements prior to the receipt of any CCDF funds. Validations of these requirements are made by Guam DPHSS Licensing Office and DPHSS-Division of Environmental Health (DEH) during quarterly facility inspections and monitoring. A certification of compliance report of the Job-Site Inspection is issued by Division of Environmental Health and provided to Guam’s CCDF Program Office and Bureau of Social Services Administration (BOSSA) – Licensing Office. Condition: For forty-two (or 91%) of forty-six items, aggregating $4,513,648 of $19,184,317 in total program benefits paid to child care providers during the year, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. Finding No.: 2024-044, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Special Tests and Provisions - Health and Safety Requirements Questioned Costs: $3,726,391 Condition, continued: See the Notes to the SEFA for chart/table. Finding No.: 2024-044, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Special Tests and Provisions - Health and Safety Requirements Questioned Costs: $3,726,391 Condition, continued: For item # 5, FY2024 Licensed Child Care Inspection Summary Report/License-Exempt Relative Care Validation Checklist from the Bureau of Child Care Services (BCCS) was not provided. Hence, we were unable to ascertain compliance. For item #s 33 through 36 and 38 through 39, FY2024 Licensed Child Care Inspection Summary Report/License-Exempt Relative Care Validation Checklist from BCCS, FY2024 Inspection Report from the Division of Environmental Health (DEH), and FY2024 Certification for Assurance for Child Care Facility License were not provided. Hence, we were unable to ascertain compliance. For item #s 6 through 26, and 42, FY2024 Inspection Report from DEH and FY2024 Certification for Assurance for Child Care Facility License were not provided. Hence, we were unable to ascertain compliance. For item #s 27 through 29, FY2024 Inspection Report from DEH and FY2024 Certification for Assurance for Child Care Facility License were not provided. Hence, we were unable to ascertain compliance. Furthermore, there were several non-compliances indicated in BCCS checklist, however, there were no BCCS Corrective Action Plan or supporting document to show re-inspection was conducted to demonstrate compliance. For item #s 1 through 4, 30 through 32, 37, and 40 through 41, these items were noted to have demerits in their FY2024 DEH Inspection Report and there were no supporting documents provided to demonstrate that the demerits were corrected to demonstrate compliance. Cause: The Department of Public Health and Social Services (DPHSS) management did not enforce monitoring controls over compliance with applicable special tests and provisions for health and safety requirements. Also, there were no formal internal control policies and procedures in place to ensure compliance with applicable special tests and provisions for health and safety requirements. Finding No.: 2024-044, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Special Tests and Provisions - Health and Safety Requirements Questioned Costs: $3,726,391 Effect: GovGuam is in noncompliance with applicable special tests and provisions for health and safety requirements. The reportable questioned cost is $3,726,391 based on the items identified in Condition above. Identification as a Repeat Finding: 2023-032 Recommendation: DPHSS management should strengthen monitoring controls over compliance with applicable special tests and provisions for health and safety requirements. Responsible personnel should retain required inspections summary report/ license, or certification to support compliance. Views of Responsible Officials: The Bureau of Child Care Services (BCCS) disagrees with this finding. All applicable providers were monitored and met necessary health and safety requirements. All supporting inspection reports and certifications exist and were provided to the auditors via a OneDrive link on February 9, 2026, following a subsequent request for information. Additionally, in accordance with the Rules and Regulations Governing Child Care Facilities Section 1.5.00 (a), Relative Care facilities are exempt from Sanitary Permits. BCCS requests a detailed breakdown of the $3,726,391 valuation to clarify if the audit team applied a total disallowance of payments or a weighted penalty for perceived documentation gaps. We maintain that this dollar amount is fundamentally inaccurate if the assessment did not properly factor in the specific regulatory exemptions applicable to these providers. Furthermore, BCCS questions the rationale used to assign such a substantial fiscal impact to an administrative-heavy finding, especially where the core program requirements and services were successfully fulfilled. Finding No.: 2024-044, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.575/93.596 CCDF Cluster Federal Award No.: 2001GUCCDF, 2101GUCCDF, 2101GUCCC5, 2201GUCCDD, 2301GUCCDD, 2401GUCCDD, 2301GUCCDF, 2401GUCCDT Area: Special Tests and Provisions - Health and Safety Requirements Questioned Costs: $3,726,391 Auditor’s Response: Our finding remains because documents subsequently received by auditors on February 9, 2026 were insufficient or incomplete to substantiate compliance with special tests and provisions – health and safety requirements. Our finding does not mention matters regarding Sanitary Permit requirement. The amount presented as questioned costs in the condition above pertains to total program benefits paid to child care providers with identified deficiencies. There are no weighted penalty assigned to each cost being tested. As defined in 2 CFR Part 200 Subpart A, “Questioned cost means an amount, expended or received from a Federal award, that in the auditor's judgment: (i) Is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award; (ii) At the time of the audit, lacked adequate documentation to support compliance; or (iii) Appeared unreasonable and did not reflect the actions a prudent person would take in the circumstances. (2) The questioned cost amount under (1)(ii) is calculated as if the portion of a transaction that lacked adequate documentation were confirmed noncompliant. (6) Questioned costs are not improper payments until reviewed and confirmed to be improper payments as defined in OMB Circular A-123 Appendix C.”
Finding No.: 2024-045 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5021 Area: Eligibility Questioned Costs: $1,970,002 Criteria: 42 CFR 457.965(b)(1)(iii) states that a State plan must provide that the State will maintain or supervise the maintenance of the records necessary for the proper and efficient operation of the plan. The records must include all individual records on each applicant and enrollee that contain the date of, basis for, and all documents or other evidence to support any determination, denial, or other adverse action, including decisions made at application, renewal, and a result of a change in circumstance, taken with respect to the applicant or enrollee, including all information provided by the applicant or enrollee, and all information obtained electronically or otherwise by the State from third-party sources. 42 CFR 457.965(d)(1) states that the agency must maintain the records described in 42 CFR 457.965(b) in an electronic format. 42 CFR 457.340(e) states that the State must provide each applicant or enrollee with timely and adequate written notice of any decision affecting his or her eligibility, including an approval, denial or termination, or suspension of eligibility. 42 CFR 457.340(d)(2) states that in applying timeliness standards, the State must define “date of application” and must count each calendar day from the date of application to the day the agency provides notice of its eligibility decision. 42 CFR 435.912(c)(3) states that except as provided in 42 CFR 435.912(e), the determination of eligibility for any applicant or individual whose account was transferred from another insurance affordability program may not exceed: (i) 90 calendar days for applicants who apply for Medicaid on the basis of disability; and (ii) 45 calendar days for all other applicants. Condition: For thirty-seven (or 56%) of sixty-six items, aggregating $1,974,989 of $32,045,067 in total participant benefits, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. Finding No.: 2024-045, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5021 Area: Eligibility Questioned Costs: $1,970,002 Condition, continued: See the Notes to the SEFA for chart/table. Finding No.: 2024-045, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5021 Area: Eligibility Questioned Costs: $1,970,002 Condition, continued: For item #s 1 through 3, 9, and 22 through 31, eligibility determination exceeded the 45-day requirement. For item # 32, benefit payment was for medical service not within the certified period of eligibility. For item # 37, documentation of applicant’s identification was not on file. For item #s 22, supporting documentation (e.g. identification card) to support whether the child met the age requirement and whether the child is a U.S. citizen or qualified noncitizen (alien) was not on file. Also, documentation of applicant’s identification was not on file. For item #s 4 and 6, documentation (e.g. mayor’s verification document) to support applicant’s household size were not on file. For item #s 4, 6 through 7, and 9 through 15, documentation to support whether the applicant met the income eligibility requirement was not on file. For item #s 4 through 5, 8, 10 through 11, and 32 through 36, we were unable to verify whether eligibility was determined within 45 days upon application as the Notice of Action and/or the application were not in the case file. For item #s 16 through 21, and 37, the applicant did not meet the income eligibility requirement. Cause: Department of Public Health and Social Services (DPHSS) did not enforce monitoring controls over compliance with applicable eligibility requirements, specifically, retaining sufficient documentation to support eligibility determination. Finding No.: 2024-045, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5021 Area: Eligibility Questioned Costs: $1,970,002 Effect: GovGuam is in noncompliance with applicable eligibility requirements. The reportable questioned cost is $1,970,002 based on the items identified in Condition above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable eligibility requirements, specifically, retaining sufficient documentation to support eligibility determination. Views of Responsible Officials: DPHSS agrees with this finding. The Bureau of Economic Security (BES) recognized the finding as an issue and in response, held a bureau-wide training for both front desk personnel and eligibility specialists on December 22 - 23, 2025. This training focused on application handling including the timeliness of eligibility determinations and proper documentation maintenance procedures. The training reinforced use of a standardized application checklist that was developed to support application completeness. Staff were also trained in the correct method for uploading documents into the OnBase system, the bureau’s digital record archive, for secure storage and efficient retrieval. In January 2026, BES conducted a Customer Email Standard Operating Procedure (SOP) training to reinforce staff compliance with documentation requirements, including the use of document imaging process (DIP) to ensure customer documentation received via email is uploaded into the OnBase system within two business days. In addition, DPHSS is preparing additional training sessions, which are currently being developed, on topics such as Medicaid Basics 101, Customer Service, and Medicaid Eligibility. To assess compliance with the training, Eligibility Specialist Supervisors were tasked with periodically reviewing random samples of applications across all three centers to verify application completeness, including required documents. BES will further reinforce timeliness compliance by incorporating 45-day timeliness checks and targeted reviews of higher-risk cases into supervisory case reviews. Findings from these reviews will be used to inform corrective action and retraining as needed. DPHSS is also revising the document verification list in the Public Application form to help clients clearly identify required documentation needed to support eligibility determination and reduce the risk of missing or incomplete case files.
Finding No.: 2024-046 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5R21 Area: Period of Performance Questioned Costs: $76,203 Criteria: In accordance with applicable period of performance (POP) requirements, a State may only charge allowable costs incurred during a federal award’s period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: For twenty-one (or 53%) of forty items, aggregating $163,214 of $1,253,556 of expenditures subjected to period of performance test, the Department of Public Health and Social Services (DPHSS) charged costs to a federal award prior to the period of performance: See the Notes to the SEFA for chart/table. Finding No.: 2024-046, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5R21 Area: Period of Performance Questioned Costs: $76,203 Cause: DPHSS did not enforce monitoring controls over compliance with applicable period of performance requirements relating to charging costs to a federal award within the period of performance. Effect: GovGuam is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $76,203 based on the item identified in Condition above. Recommendation: Prior to charging costs to a federal award, responsible personnel should verify that such costs are within the period of performance. Views of Responsible Officials: DPHSS disagrees with this finding and provided documentation of grantor approval to use the FY 2024 award to pay prior year obligations. The enclosed communication from Linda Gee, CMS, dated July 1, 2021, provides more information. 45 CFR 95.7 (https://www.ecfr.gov/cgi-bin/text-idx?node=pt45.1.95&rgn=div5#se45.1.95_17) provides that a state Medicaid agency (i.e. Guam Medicaid Agency) has up to two years to file for a claim that it made. DPHSS welcomes the opportunity to discuss and collaboratively identify the relevant information and guidance during an entrance conference for each year’s audit. Auditor’s Response: Our finding remains because the condition cited above pertains costs charged to a federal award prior to the period of performance and does not pertain to the period up to when a charge can be made (i.e. liquidation period).
Finding No.: 2024-047 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5021 Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $1,562,177 Criteria: 42 CFR 455.412 states that the State Medicaid Agency must have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Also, 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. 42 CFR 455.432 states that the State Medicaid agency must conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Also, the State Medicaid agency must require any enrolled provider to permit CMS, its agents, its designated contractors, or the Medicaid agency to conduct unannounced on-site inspection of any and all provider locations. 42 CFR 455.434(a) states that the State Medicaid agency, as a condition of enrollment, must require providers to consent to a criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. 42 CFR 455.434(b) states that the State Medicaid agency must establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. 42 CFR 455.450 states that a State Medicaid agency must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Finding No.: 2024-047, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5021 Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $1,562,177 Criteria, continued: 42 CFR 455.460 states that beginning on or after March 25, 2011, States must collect the applicable application fee prior to executing a provider agreement from a prospective or re-enrolling provider other than either of the following: (1) Individual physicians or nonphysician practitioners. (2) (i) Providers who are enrolled in either of the following: (A) Title XVIII of the Act. (B) Another State’s title XIX or XXI plan. (ii) Providers that have paid the applicable application fee to - (A) A Medicare contractor; or (B) Another State. 42 CFR 455.104 states that the Medicaid agency must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: (1) (i) The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. (ii) Date of birth and Social Security Number (in the case of an individual). (iii) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. (2) Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. Finding No.: 2024-047, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5021 Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $1,562,177 Criteria, continued: (3) The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. (4) The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). Furthermore, 2 CFR 200.303(a) states that the recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the COSO. Conditions: 1. The Department of Public Health and Social Services (DPHSS) lacks adequate internal policies and procedures over compliance with the applicable special tests and provisions for provider eligibility (screening and enrollment). 2. For twenty-four (or 100%) of twenty-four items, aggregating $1,562,177 of $32,045,067 of expenditures, deficiencies were noted, as follows: See the Notes to the SEFA for chart/table. Finding No.: 2024-047, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5021 Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $1,562,177 Conditions, continued: See the Notes to the SEFA for chart/table. DPHSS did not establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program, hence, for all items, we are unable to determine whether screening and enrollment requirements (e.g., pre-enrollment and post-enrollment site visits and consent to a criminal background checks) were performed accordingly based on the categorical risk level of providers. For all items, DPHSS was unable to provide supporting documentation that could demonstrate the basis of not collecting the applicable application fee prior to executing a provider agreement. For items # 8 through 22, the Guam Medicaid and Medically Indigent Program (MIP) Provider Enrollment Disclosure of Ownership and Control Interest Statement form was not on file. For items # 18 through 22, provider’s license or business license was not on file. Finding No.: 2024-047, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5021 Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $1,562,177 Cause: DPHSS lacks adequate internal policies and procedures over compliance with the applicable special tests and provisions for provider eligibility (screening and enrollment). Responsible personnel managing the program attended off-island trainings during the fiscal year, however, standard operating procedures that specifically address the applicable compliance requirements have not yet been established. Effect: GovGuam is in noncompliance with applicable special tests and provisions for provider eligibility (screening and enrollment). The reportable questioned cost is $1,562,177 based on the items identified in Conditions above. Recommendation: DPHSS management should prioritize to establish internal policies and procedures over compliance with applicable special tests and provisions for provider eligibility (screening and enrollment). Views of Responsible Officials: DPHSS agrees with this finding. DPHSS is aware that deficiencies exist with the Medicaid provider enrolment process. DPHSS’s response to this deficiency is addressed in its modernization plan, which will automate certain provider enrolment functions. In March 2024, DPHSS performed site visits for 21 providers, and since then has continued to perform site visits year-round. Memorandums regarding provider compliance topics have also been communicated to providers and published on the provider portal, including information regarding criminal background checks. DPHSS is currently contracted with a consultant that is assisting in the implementation of compliant provider enrolment operations, which includes policy revisions, updates to provider applications and disclosure forms, development of standard operating procedures, and training for both staff and providers. Finding No.: 2024-047, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.767 Children’s Health Insurance Program Federal Award No.: 2405GQ5021 Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $1,562,177 Views of Responsible Officials, continued: In addition, DPHSS is currently in the process of establishing a Medicaid Program Integrity Unit (PI Unit) with a mission to conduct independent and objective Medicaid program integrity functions adherent to federal and local laws. The PI Unit will also assist DPHSS in addressing and managing Medicaid related Corrective Action Plans.
Finding No.: 2024-048 Federal Agency: U.S. Department of Health and Human Service AL Program: 93.778 Medical Assistance Program Federal Award No.: 75X0512 Area: Eligibility for Individuals Area: Special Tests and Provisions - Utilization Control Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Area: Special Tests and Provisions - Provider Health and Safety Standards Questioned Costs: $ Undeterminable Criteria: 2 CFR 200.302 states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient and subrecipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Moreover, the recipient’s and subrecipient’s financial management system must provide for 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. Condition: A reconciled medical claims schedule for the fiscal year could not be provided. Specifically, total amount of medical claims per medical claims schedule ($186 million) did not agree with the claims expenditure per financial records ($189 million). Cause: There is a lack of reconciliation process between Department of Public Health and Social Services (DPHSS) and Department of Administration (DOA). Effect: We are unable to establish a complete and accurate population from which to draw our selection of transactions in order to provide sufficient appropriate audit evidence to support an opinion on compliance. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2024-048, continued Federal Agency: U.S. Department of Health and Human Service AL Program: 93.778 Medical Assistance Program Federal Award No.: 75X0512 Area: Eligibility for Individuals Area: Special Tests and Provisions - Utilization Control Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Area: Special Tests and Provisions - Provider Health and Safety Standards Questioned Costs: $ Undeterminable Recommendation: Reconciliation process between DPHSS and DOA should take place to ensure that claims expenditure per financial record is supported by underlying medical claims schedule. Views of Responsible Officials: DPHSS agrees with this finding. To address the recommendation for a reconciliation process, DPHSS is in the process of forming a multi-agency technology initiative which will include: • Establishment of an Inter-Agency Data Hub: DPHSS, in collaboration with the Office of Technology (OTECH) and the Department of Administration (DOA), aims to establish a centralized Data Hub. This hub will facilitate real-time or scheduled data synchronization between the DPHSS medical management systems and DOA’s financial accounting records, which are managed in the Guam Financial Management Information System (GFMIS). The data hub is intended to ensure all claims paid are automatically after proper approvals and are then reconciled with the general ledger. • Inter-Agency Agreement and Coordination: DPHSS acknowledges that successful implementation of this Data Hub requires a unified commitment. DPHSS leadership is coordinating with the Director of DOA to discuss the technical requirements and administrative protocols. A formal Memorandum of Agreement (MOA) or a joint standard procedure will be sought, subject to the concurrence and approval by both Agency Directors. • Manual Interim Reconciliation: Until the Data Hub is fully operational, DPHSS will work with DOA to implement a monthly manual reconciliation process. This will involve a “crosswalk” review of claim batch totals against financial system postings to identify and resolve variances (such as voided checks or manual adjustments) in a timely manner. • Engagement with OTECH: Once the two directors agree on the framework, DPHSS will engage OTECH to design the data architecture necessary to ensure data integrity, security, and compliance with federal reporting standards. Estimated implementation timeframe: March 31, 2027
Finding No.: 2024-049 Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Area: Activities Allowed or Unallowed Area: Allowable Costs/Cost Principles Questioned Costs: $65,621 Criteria: In accordance with the applicable activities allowed or unallowed requirements, institutions must demonstrate that costs incurred are allowable under the relevant program legislation, federal awarding agency regulations, and the terms and conditions of the award and consistent with the purpose of the grant. 2 CFR 200.403(a) states that federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and 2 CFR 200.403(g) states that costs should be adequately documented. Furthermore, 2 CFR 200.431(c) states that the cost of fringe benefits in the form of employer contributions or expenses for social security; employee life, health, unemployment, and worker’s compensation insurance (except as indicated in 2 CFR 200.447); pension plan costs; and other similar benefits are allowable, provided such benefits are permitted under established written policies. The recipient or subrecipient must allocate fringe benefits to Federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such Federal awards and other activities and charged as direct or indirect costs following the recipient’s or subrecipient’s accounting practices. Conditions: 1. For one (or 8%) of twelve items, aggregating $900,119 of $1,109,001 in total non-payroll expenditures, there were no supporting documents (e.g. contracts, vendor invoice, payment advice) on file to substantiate whether expenditure amounting to $61,799 related to federal award no. PA09GU4495PW00061-54 and with voucher no. IJE0027179, was allowable cost of the underlying grant. Finding No.: 2024-049, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Area: Activities Allowed or Unallowed Area: Allowable Costs/Cost Principles Questioned Costs: $65,621 Conditions, continued: 2. For three (or 33%) of nine items, aggregating $13,103 of $833,788 in total payroll expenditures, deficiencies were noted, as follows: Item No. See the Notes to the SEFA for chart/table. For item # 1, personnel action file was not on file. For item #s 2 through 3, there were no supporting documents (e.g. timesheet, payroll register, personnel action file) on file to substantiate whether expenditure was allowable cost of the underlying grant. Cause: The Department of Administration (DOA) did not enforce monitoring controls over compliance with applicable activities allowed or unallowed and allowable costs/cost principles requirements, specifically, retaining sufficient documentation to support transactions and ensuring expenditures are necessary and reasonable for the performance of the Federal award. Effect: GovGuam is in noncompliance with activities allowed or unallowed and allowable costs/cost principles requirements. The reportable questioned cost is $65,621 based on the items identified in Conditions above. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable activities allowed or unallowed and allowable costs/cost principles requirements, specifically, retaining sufficient documentation to support transactions. Finding No.: 2024-049, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Area: Activities Allowed or Unallowed Area: Allowable Costs/Cost Principles Questioned Costs: $65,621 Views of Responsible Officials: Guam Homeland Security (GHS) will make sure that proper supporting documentation is available. GHS will also identify department personnel responsible.
Finding No.: 2024-050 Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award No.: Various Area: Matching, Level of Effort, Earmarking Questioned Costs: $ Undeterminable Criteria: In accordance with 44 CFR 206.65, the Federal share for assistance provided shall not be less than 75 percent of the eligible costs. Per applicable matching requirement, the accountability for meeting the matching requirement resides with the recipient and is determined at the time of project accounting as part of project closeout (i.e., the nonfederal share does not have to be met until the end of the project). In accordance with FEMA Recovery Policy 104-11-2 (B)(2)(a), FEMA provides contribution for management costs based on actual costs incurred up to 7 percent of the total award amount for the disaster or emergency, excluding subrecipient management costs. Furthermore, 2 CFR 200.303(a) states that the recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the COSO. Conditions: 1. Required non-federal share of matching could not be determined as underlying grant agreements were not made available. 2. Guam Homeland Security (GHS) was unable to demonstrate and provide evidence of compliance with the aforementioned earmarking requirement. 3. GHS lacks adequate internal policies and procedures over compliance with the applicable matching and earmarking requirements. Cause: GHS management did not monitor compliance with applicable matching and earmarking requirements. Finding No.: 2024-050, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award No.: Various Area: Matching, Level of Effort, Earmarking Questioned Costs: $ Undeterminable Effect: We are unable to verify compliance with the requirements for matching. Furthermore, GovGuam is in noncompliance with applicable earmarking requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: GHS management should establish internal policies and procedures over compliance with applicable matching and earmarking requirements. Also, GHS management should clearly identify department/ personnel responsible for program’s compliance. Views of responsible officials: GHS will create a Standard Operating Procedure (SOP) to establish internal policies and procedures with applicable matching and earmarking requirements. GHS will also identify department personnel responsible.
Finding No.: 2024-051 Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Area: Period of Performance Questioned Costs: $ Undeterminable Criteria: In accordance with applicable period of performance (POP) requirements, a State may only charge allowable costs incurred during a federal award’s period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: Compliance with period of performance of expenditures related to the following federal award could not be determined as underlying grant agreements were not made available: See the Notes to the SEFA for chart/table. Cause: Guam Homeland Security (GHS) was unable to provide copy of underlying grant agreements. Effect: GovGuam is in noncompliance with applicable period of performance requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: GHS management should establish internal policies and procedures over compliance with applicable period of performance requirements. Furthermore, GHS management should implement adequate internal control policies and procedures requiring retention of all grant agreements. Finding No.: 2024-051, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Area: Period of Performance Questioned Costs: $ Undeterminable Views of Responsible Officials: GHS will create a Standard Operating Procedure (SOP) to establish internal policies and procedures over compliance with applicable period of Performance requirements, as well as retention of all grant agreements. GHS will also identify department personnel responsible.
Finding No.: 2024-052 Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award No.: Various Area: Reporting Questioned Costs: $0 Criteria: 2 CFR 200.302(a) states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 300.302(b) states that recipient’s financial management system must provide for the following: 1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. 2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in 2 CFR 200.328 and 200.329. 3) 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 200.328(c) states that recipient must submit financial reports as required by the Federal award. Conditions: 1. We are unable to establish a complete list of financial reports required to be submitted during the fiscal year as Guam Homeland Security (GHS) was unable to provide copies of each grant award. GHS was unable to demonstrate that the financial reports submitted to our audit team consisted of all the required reports. Finding No.: 2024-052, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award No.: Various Area: Reporting Questioned Costs: $0 Conditions, continued: 2. From the list of reports submitted to our audit team, for eight (or 100%) of eight reports tested, records that accumulate and summarize reported data such as 1) cash receipts; 2) cash disbursements; and 3) federal share of expenditures, were not provided for the following: See the Notes to the SEFA for chart/table. Cause: Department of Administration (DOA) assigned GHS as the agency responsible for providing required audit documentation, however, GHS did not provide timely responses to the audit team’s requests. GHS could not identify the personnel responsible for compliance with applicable reporting requirements. Effect: We are unable to determine compliance with applicable reporting requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: GHS management should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain a monitoring of financial reports required to be submitted for each grant award effective during the fiscal year. Finding No.: 2024-052, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award No.: Various Area: Reporting Questioned Costs: $0 Views of Responsible Officials: GHS will work with DOA to make sure reports are submitted on time. GHS will also retain documentation of submitted reports.
Finding No.: 2024-053 Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award No.: Various Area: Special Tests and Provisions – Project Accounting Questioned Costs: $ Undeterminable Criteria: In accordance with 44 CFR 206.205(b)(1), for large projects, the recipient shall make an accounting to the Regional Administrator of eligible costs for each approved large project. In submitting the accounting the recipient shall certify that reported costs were incurred in the performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, and that payments for that project have been made in accordance with 2 CFR 200.305. Each large project shall be submitted as soon as practicable after the subrecipient has completed the approved work and requested payment. Condition: Guam Homeland Security (GHS) did not provide a listing of ongoing and completed large projects during the audit period. Cause: Department of Administration (DOA) assigned GHS as the agency responsible for providing required audit documentation, however, GHS did not provide timely responses to the audit team’s requests. GHS could not identify the personnel responsible for compliance with applicable special tests and provision requirements. Effect: We are unable to verify compliance with the requirements for special tests and provisions – project accounting. Specifically, we are unable to ascertain if (1) for ongoing large projects, costs submitted for reimbursement were in compliance with the requirements for eligible work under the applicable Project; and (2) for completed large projects, entity’s files document the total costs as allowable costs and if the costs are for allowable activities under the applicable Project. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: GHS management should establish internal policies and procedures over compliance with applicable special tests and provisions requirements. Also, GHS management should clearly identify department/ personnel responsible for program’s compliance. Finding No.: 2024-053, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award No.: Various Area: Special Tests and Provisions – Project Accounting Questioned Costs: $ Undeterminable Views of responsible officials: GHS will create a Standard Operating Procedure (SOP) to establish internal policies and procedures in compliance with applicable special tests and provision requirements. GHS will also identify department personnel responsible.