Audit 404989

2024-003 – Single Audit Report Submission – Material Weakness Federal program information: Funding agency: All Major Programs Title: All Major Programs Assistance listing number: All Major Programs Award year: All Major Programs Award number: All Major Programs Criteria: The Uniform Guidance requires that the Single Audit reporting package be submitted within nine months after the end of the audit period. Condition/Context: The Department’s fiscal year ended December 31, 2024; the Single Audit reporting package was not submitted to the Federal Audit Clearinghouse within nine months after the end of the audit period as required. Cause and Effect: The Department did not have appropriate internal control policies and procedures in place to ensure accounting records and financial statements were reconciled timely and the audit was conducted in time to meet compliance requirements. As a result, the Single Audit reporting package was submitted well after the required reporting period, which may result in the potential suspension of funding provided by federal agencies. Questioned Costs: None. Identification as a Repeat Finding: This is a repeat finding from the prior year. This finding was reported as financial statement finding 2023-002 in the 2023 report. Recommendations: To ensure compliance with Uniform Guidance requirements, the Department should prepare accurate, complete, and timely financial statements to ensure an audit is performed timely and the Single Audit reporting package is submitted by the required deadline. Views of Responsible Officials: Management concurs with the finding. Management is continuing efforts to improve the timeliness of the year-end close process, strengthen financial reporting procedures, and enhance audit preparation and coordination to support timely completion and submission of future Single Audit reporting packages..

2024-004 – Reporting – Significant Deficiency Federal program information: Funding agency: U.S. Department of Treasury Title: Local Assistance and Tribal Consistency Funds Assistance listing number: 21.032 Award year: December 31, 2024 Award number: COVID-19 Funding Funding agency: U.S. Department of Health and Human Services Title: Head Start Cluster Assistance listing number: 93.600 Award year: December 31, 2024 Award number: 90CI010014-05-04 Criteria: In accordance with the program’s contract provisions, the federal programs are required to submit financial information and applicable narrative reports to the funding agencies using standard financial reporting forms. These reports are to be submitted by the required due date, be accurately completed and supported by the underlying accounting and operational records. Condition/Context: Internal control processes were not sufficient to ensure timely and accurate submission of reports. As a result, two of two sampled SF-425 reports and an annual Expenditure and Obligation Report were not submitted on time. Additionally, management was unable to reconcile one of the two SF-425 reports and the Project and Obligation Report was not properly prepared. Cause and Effect: The Department did not have appropriate controls in place to monitor reporting deadlines. As a result, the Department was not submitting required reports to each respective federal agency in a timely manner. Questioned Costs: None. Identification as a Repeat Finding: This is a repeat finding from the prior year. This finding was reported as finding 2023-004 and 2023-006 in the 2023 report. Recommendations: We recommend that the Finance Department develop and implement internal control policies and procedures that ensure required reports are filed timely. We further recommend that the Department implement a monitoring process to ensure that the reporting information is accurate and complete and filed by the required due date.. Views of Responsible Officials: Management concurs with the finding. The Department is continuing efforts to strengthen internal controls over the preparation, review, and timely submission of required federal reports. Management will continue to monitor the reporting process and implement procedures to support accurate, complete, and timely filing of required reports.

2024-005 – Procurement, Suspension, and Debarment – Significant Deficiency Federal program information: Funding agency: U.S. Department of Treasury Title: Coronavirus State and Local Fiscal Recovery Funds Assistance listing number: 21.027 Award year: December 31, 2024 Award number: COVID-19 Funding Criteria: In accordance with the program’s contract provisions, recipients may use award funds to enter into contracts to procure goods and services necessary to implement the eligible purposes outlined by the treasury. Recipients are expected to follow procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance. Condition/Context: For two of five procurements tested, the Department could not provide evidence that procedures were performed to ensure vendors were not suspended or debarred from receiving federal funding for services rendered. In addition, for two of five procurements tested, sole source justifications were identified that did not meet the Department’s policy requirements. Cause and Effect: The Department did not have appropriate internal control policies and procedures in place to ensure selected vendors were not suspended or debarred and that sole source procurements were adequately justified in accordance with the Department’s policy. As a result, federal funding could be awarded to vendors not entitled to receive federal funds. Questioned Costs: None. Identification as a Repeat Finding: This is a repeat finding from the prior year. This finding was reported as finding 2023-005 in the 2023 report. Recommendations: We recommend revising the Department’s procedures to ensure vendors with which the Department procures goods and services are not federally suspended or debarred. We also recommend revising the Department strengthen procedures over sole source procurements to ensure justifications are prepared, reviewed, and maintained in accordance with Department policy and the Uniform Guidance.. Views of Responsible Officials: Management concurs with the finding. Procurement, Grants, and Contracts has developed updated policies and procedures intended to strengthen procurement controls and support compliance with applicable federal requirements, including vendor suspension and debarment verification. These policies and procedures have been submitted for approval but have not yet been formally adopted. In the interim, management will continue working with the responsible departments to support implementation efforts and strengthen procurement practices while formal approval is pending.

2024-006 – Special Tests and Provisions – Character Investigations – Significant Deficiency Federal program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination and Education Assistance Act Assistance listing number: 93.441 Award year: December 31, 2024 Award number: 246202400013 Criteria: In accordance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR Part 200, Subpart F, the auditee is required to comply with all federal statutes, regulations, and the terms and conditions of the federal award, including background investigation requirements, such as conducting fingerprinting and background checks of employees in accordance with the Department’s policies and procedures. Condition/Context: The Department was unable to provide complete background checks and suitability determination/adjudication documentation for two of two employees sampled. Cause and Effect: The Department did not have appropriate internal control policies and procedures in place to ensure compliance with background check requirements. Questioned Costs: None. Recommendations: The Department should comply with established policies and procedures related to background investigations. Views of Responsible Officials: Management concurs with the finding. The Department is in the process of strengthening controls and procedures related to background check and suitability determination requirements. Oversight of corrective action will be coordinated through the Human Resources function and related administrative leadership until staffing is fully in place. Management is working to improve documentation, compliance monitoring, and consistency in applying established requirements.