Audit 405453

Finding 2025-001 MATERIAL WEAKNESS IN INTERNAL CONTROLS OVER COMPLIANCE, MATERIAL NONCOMPLIANCE -REPORTING Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: US Department of Treasury Pass- Through Agencies: Various Assistance Listing Number: 21.027 Criteria: Management is required to submit various annual, quarterly, and monthly reports to the grantor in accordance with the grant agreement. Additionally, 2 CFR 200.303 requires management to have appropriate controls such that appropriate preparation, reviews, and evidence of those reviews are in place. Condition/Perspective: Based on the results of the testing we noted the following: • Out of a total of 4 Annual reports sampled, 3 did not have proof of submission or review. • Out of a total of 16 Quarterly reports sampled, 10 did not have proof of submission or review and 5 had proof of submission, but no proof of review. Of the 6 reports with proof of submission, 2 were submitted late. • Out of a total of 13 Monthly reports sampled, 1 did not have proof of submission or review. Of the reports with proof of submission 7 were submitted late. Cause: Management continued to experience high turnover during the fiscal year and the documentation pertaining to the evidence of reviews and the evidence of report submission was not retained. Effect: Without appropriate controls in place there is a risk that the Division could have submitted a report that is incomplete, contained inaccurate information, past the reporting requirement due date, or could have failed to submit the report entirely. Noncompliance with such grant requirements could result in a loss of funding. Questioned Cost: None. Repeat Finding: Yes. See 2024-001 in prior year report. Recommendation: Division management should review all applicable grant compliance requirements and ensure that the requirements are being met, including that reports are submitted on a timely basis. Additionally, the Division should continue to address and enhance their control procedures such that the appropriate individuals review all required reports in a timely manner prior to submission to the granting agency(ies); and, maintain documentation evidencing such reviews and submission dates. View of Responsible Officials: See Corrective Action Plan.

Finding 2025-002 SIGNIFICANT DEFICIENCY IN IN INTERNAL CONTROLS OVER COMPLIANCE, NONCOMPLIANCE – Allowable Costs and Cost Principles and Activities Allowed and Unallowed Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: US Department of Treasury Pass- Through Agencies: Various Assistance Listing Number: 21.027 Criteria: Allowability of costs should be adequately documented in accordance with 2 CFR 200.403 (g). Condition/Perspective: From an allowable cost sample of 40, 5 selections could not be agreed to the underlying support. In 4 instances the amount charged to the federal award was less than the amount per the provided payroll support and in 1 instance the amount charged to the federal award was greater than the amount per the provided payroll support. This resulted in a total of $1,982.85 (understatement) in unsubstantiated payroll expenses allocated to the federal award. Cause: Documentation pertaining to the calculation of allocating payroll expenses to the federal award was unavailable as it was not retained. Effect: Without retention of the appropriate support there is a risk that the Division could charge costs that are not allowed by the federal award. Noncompliance with allowability criteria could result in the Division having to refund the granting agency or a loss of funding. Questioned Cost: $1,982.85 Recommendation: Management should design and implement a control that prevents unsubstantiated expenses from being charged to the federal award; and, retain all documentation supporting such charges. View of Responsible Officials: See Corrective Action Plan.

Finding 2025-003 SIGNIFICANT DEFICIENCY IN IN INTERNAL CONTROLS OVER COMPLIANCE – Allowable Costs and Cost Principles and Activities Allowed and Unallowed Federal Program: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: US Department of Health and Human Services Pass- Through Agencies: City & County of Denver Assistance Listing Number: 93.498 Criteria: In accordance with 2 CFR 200.303 the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition/Perspective: On a monthly basis management reviews costs for allowability and submits draw-down requests for reimbursement to the pass-through agency. From 3 selections of reimbursement requests, management could not provide documentation to evidence a review was performed prior to submission for 1 draw-down request. Cause: Documentation pertaining to the evidence of expenditure review was not retained as management was not aware that such documentation should be retained. Effect: Without appropriate review controls in place there is a risk that the Division could submit costs that are not allowed. Noncompliance with allowability criteria could result in the Division having to refund the granting agency or a loss of funding. Questioned Cost: None. Recommendation: The Division should enhance their control procedures such that documentation of review is retained. View of Responsible Officials: See Corrective Action Plan.