Assistance Listing: 66.957 Greenhouse Gas Reduction Fund: National Clean Investment Fund and 66.959 Greenhouse Gas Reduction Fund: Solar for All Finding No. 2025-002: Significant Deficiency in Controls Over Procurement Documentation and Approvals Condition: During testing of procurement transactions for the Solar for All (SFA) and Greenhouse Gas Reduction Fund: National Clean Investment Fund (GGRF) programs, documentation supporting required procurement approvals was not consistently maintained. Specifically, for one (1) of two (2) procurements tested under the SFA program ($130,000), required pre-approval by the Finance Department was not documented. For both procurements tested under the GGRF National Clean Investment Fund program ($36,094), written evidence of approval was not available; management indicated that approvals had been obtained verbally. Criteria: Non-federal entities are required to maintain effective internal controls over procurement to ensure compliance with Uniform Guidance (2 CFR 200.318–200.320). This includes ensuring that procurements are properly authorized in accordance with established policies, retaining sufficient documentation to support procurement decisions and approvals, and maintaining a clear audit trail demonstrating adherence to applicable requirements. Cause: These conditions appear to be attributable to inadequate documentation retention practices and the absence of formalized procedures requiring written evidence of procurement approvals. Additionally, reliance on verbal approvals and challenges associated with system transitions contributed to gaps in the retention of supporting documentation. Effect or Potential Effect: The lack of documented procurement approvals increases the risk of noncompliance with federal procurement requirements and weakens the audit trail supporting that purchases were appropriately authorized. As a result, there is an increased risk of questioned costs and reduced transparency and accountability over the use of federal funds. Questioned Costs: None Perspective Information: The exceptions identified appear to be primarily related to documentation and consistency in evidencing procurement approval controls rather than an indication that approvals were not obtained in all cases. Management indicated that certain approvals were performed verbally; however, these were not consistently supported by written documentation. Strengthening documentation practices and formalizing approval procedures will enhance transparency, support compliance with Uniform Guidance requirements, and improve the organization’s ability to demonstrate that procurement activities are appropriately authorized. Addressing these matters will also promote a more consistent and auditable control environment over federally funded procurements. Identification of Repeat Finding: Not applicable since this is a new finding. Recommendation: We recommend that management strengthen procurement controls by requiring documented, written approval for all procurements prior to execution and establishing standardized approval workflows and documentation requirements. Management should also maintain a centralized repository for procurement records to support accessibility and retention, and enhance data backup and migration procedures to mitigate the risk of loss of supporting documentation during system changes. Views of Responsible Officials: Management agrees with the finding. While procurement approvals were obtained, documentation was not consistently retained due to reliance on verbal approvals and limitations associated with a system transition. Management has implemented corrective actions to strengthen controls, including requiring documented, written approval for all procurements and establishing a centralized repository for procurement documentation. Standardized approval workflows will be used to ensure approvals are properly evidenced and retained. Additionally, data retention and backup procedures have been enhanced to prevent future loss of documentation. Management will incorporate these controls into formal policies and procedures and monitor compliance to ensure consistent application across programs.
Assistance Listing: 66.957 Greenhouse Gas Reduction Fund: National Clean Investment Fund and 66.959 Greenhouse Gas Reduction Fund: Solar for All Finding No. 2025-003: Significant Deficiency in Controls over Nonpayroll Expense Approvals Condition: During testing of nonpayroll transactions for the SFA and GGRF programs, controls related to review, approval, and segregation of duties were not consistently performed or documented. For instance, under the Solar for All program, of the nine (9) transactions tested, two (2) transactions totaling $179,268 reflected inadequate segregation of duties, as the same individual responsible for contract management also approved the related invoices without evidence of an independent review. One transaction totaling $39,936 lacked documentation identifying the requestor, and five transactions totaling $233,370 did not include evidence of documented invoice approval. Under the GGRF NCIF program, four (4) of eight (8) transactions tested ($58,864.59) did not include evidence of an independent review separate from the requestor and/or individual responsible for payment processing. Criteria: In accordance with Uniform Guidance (2 CFR 200.303 and 200.403), entities are required to maintain effective internal controls over federal awards to ensure that costs charged to programs are allowable, properly authorized, and adequately supported. Transactions should be subject to appropriate review and approval, and responsibilities should be sufficiently segregated to reduce the risk of errors or irregularities. Cause: These conditions appear to result from inconsistent implementation of established internal controls, including the absence of standardized procedures for documenting approvals and insufficient enforcement of segregation of duties. Additionally, reliance on informal or manual processes contributed to incomplete documentation and audit trails supporting transaction review and authorization. Effect or Potential Effect: Weaknesses in review, approval, and segregation of duties increase the risk that improper, unsupported, or unauthorized expenditures may occur and not be identified in a timely manner. As a result, there is an elevated risk of noncompliance with applicable federal requirements and potential misstatement of program expenditures. Questioned Costs: None Perspective Information: While the exceptions identified relate primarily to documentation and consistency in the execution of control activities, they do not necessarily indicate that all review and approval procedures were absent. Management indicated that certain reviews may have been performed; however, documentation to evidence these controls was not consistently retained. Strengthening documentation practices and formalizing review and approval processes would enhance the organization’s control environment, improve transparency, and support compliance with federal requirements. Addressing these matters will also position management to more effectively demonstrate that internal controls over nonpayroll expenditures are designed and operating as intended. Identification of Repeat Finding: Not applicable since this is a new finding. Recommendation: We recommend that management strengthen controls over nonpayroll expenditures by implementing consistent and well-documented review and approval processes. This should include requiring documented approval of all invoices and payments prior to disbursement and ensuring clear segregation of duties among individuals responsible for initiating, approving, and processing transactions. Management may also consider implementing standardized, system-based approval workflows to enhance control enforcement and maintain complete audit trails. Additionally, all supporting documentation, including evidence of request, review, approval, and payment authorization, should be retained in accordance with established policies. Views of responsible Officials: Management agrees with the finding. Documentation supporting review, approval, and segregation of duties for nonpayroll transactions was not consistently maintained. Management has implemented corrective actions, including formalizing procedures that require clear separation between the requestor and approver, documented approval of all invoices prior to payment, and retention of supporting documentation. A standardized approval workflow has been implemented through Bill.com to enforce control requirements and maintain a complete audit trail. Management will incorporate these procedures into formal policies and monitor compliance to ensure controls are consistently applied across programs.
Assistance Listing: 66.957 Greenhouse Gas Reduction Fund: National Clean Investment Fund and 66.959 Greenhouse Gas Reduction Fund: Solar for All Finding No. 2025-004: Significant Deficiency in Controls over Documenting Time Sheet Reviews Condition: During testing of payroll transactions for the SFA and GGRF programs, controls related to timesheet reviews and payroll processing were not consistently performed or documented. Specifically, for the SFA program, all eleven (11) payroll transactions tested ($32,607) lacked documented evidence of timesheet review. For the GGRF program, two (2) out of nine (9) payroll transactions tested ($6,490) did not include documented evidence of timesheet review. In addition, payroll was processed without a formal secondary review after preparation by the Director of People and prior to submission through third-party service provider. While management indicated that reviews were performed, supporting documentation was not consistently retained, and a formalized process to evidence such review was not in place. Criteria: In accordance with Uniform Guidance (2 CFR 200.303 and 200.430), entities are required to maintain effective internal controls over payroll processes. This includes maintaining appropriate supporting documentation (such as timesheets), performing, and documenting supervisory review of payroll and time records, and ensuring that payroll costs charged to federal awards are accurate, allowable, and properly approved. Cause: These conditions appear to result from insufficiently formalized review control procedures and inconsistent documentation retention practices, particularly during and following system transitions. Additionally, payroll review and approval protocols were not clearly defined or consistently applied. Effect or Potential Effect: The absence of consistently documented review controls over timesheets and payroll processing limits the ability to verify the accuracy, completeness, and allowability of payroll costs. This increases the risk that errors or unsupported payroll charges could occur and not be identified in a timely manner, which may result in noncompliance with applicable federal requirements. Questioned Costs: None Perspective Information: While control deviations were noted in the areas of timesheet review and payroll processing, the exceptions identified were limited to the sample tested and were primarily related to documentation and consistency of control execution rather than evidence of pervasive or intentional noncompliance. Management indicated that reviews were performed; however, documentation to support these reviews was not consistently retained. Strengthening documentation practices and formalizing control procedures will enhance transparency, support compliance with Uniform Guidance requirements, and improve the organization’s ability to demonstrate effective internal control over payroll-related expenditures charged to federal programs. Identification of Repeat Finding: Not applicable since this is a new finding. Recommendation: We recommend that management enhance payroll controls by requiring documented supervisory review and approval of all timesheets prior to payroll processing, implementing a formal secondary review of payroll registers before submission, and formalizing payroll policies and procedures. These procedures should clearly define roles, responsibilities, and documentation requirements to support consistent application and evidence of control performance. Views of Responsible Officials: Management agrees with the finding. While timesheet and payroll reviews were performed, documentation of these reviews was not consistently retained, and a formal secondary review of payroll prior to processing was not in place. Management has implemented corrective actions, including establishing a formal, documented review process for timesheets and payroll prior to disbursement. Reviews will be performed within a centralized system or documented workflow to ensure audit evidence is retained. Additionally, a secondary review control has been implemented requiring independent approval of payroll before submission through Paylocity. Management will incorporate these procedures into standard operating practices and monitor compliance to ensure controls are consistently applied across programs.