Audit 407973

Finding: 2025-004 – Allowable Costs ALN and Title: 21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Passthrough Entity: State of Nevada Governor’s Finance Office Budget Division Type of Finding: Significant Deficiency Criteria: Per 2 CFR §200.403, costs charged to federal awards must be allowable and represent actual net expenditures incurred by the non-federal entity. Additionally, 2 CFR §200.406 requires applicable credits, including refunds and reimbursements, to be applied to reduce expenditures charged to federal awards. Condition: During testing of expenditures charged to the federal program, it was noted that the Foundation requested and received reimbursement of approximately $25,000 for legal expenditures under the federal award. Subsequent to reimbursement from the federal program, the Foundation also received reimbursement for the same expenditures from the vendor providing the legal services. The duplicate recovery of costs was not identified by management controls and remained unresolved as of year-end. Cause: The Foundation did not maintain effective controls to identify subsequent refunds, reimbursements, or applicable credits associated with expenditures charged to federal awards Effect: As a result, expenditures charged to the federal program were overstated by approximately $25,000 and did not represent actual net allowable costs incurred by the Foundation. Failure to identify and apply applicable credits increases the risk of unallowable costs being charged to federal awards. Questioned Costs: Known questioned costs of $25,000. Identification of a repeat finding: Not applicable. Context: 1 out of 37 invoices tested was not allowable. Recommendation: We recommend the Foundation strengthen its existing controls over grant reimbursement requests and the monitoring of subsequent vendor refunds, reimbursements, or credits to ensure costs charged to federal awards represent actual net allowable expenditures. Specifically, the Foundation should enhance its documented review procedures to verify that any refunds, reimbursements, or credits received after reimbursement requests are appropriately identified, evaluated, and, when applicable, credited back to the applicable federal award. View of Responsible Officials: Management agrees with this recommendation. See prepared corrective action plan for details.

Finding: 2025-005 – Procurement ALN and Title: 21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Passthrough Entity: State of Nevada Governor’s Finance Office Budget Division Type of Finding: Significant Deficiency Criteria: Per 2 CFR §200.318(a), non-federal entities must: “Use their own documented procurement procedures which reflect applicable State, local, and Tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part.” Additionally, 2 CFR §200.318(b) requires non-federal entities to maintain oversight to ensure contractors perform in accordance with the terms, conditions, and specifications of contracts or purchase orders. Condition: The Foundation did not maintain a formal written procurement policy governing purchases made with federal funds during the fiscal year ended December 31, 2025. Cause: Management had not established and formally documented procurement procedures designed to ensure compliance with Uniform Guidance procurement standards Effect: Without a documented procurement policy, the Foundation is at increased risk of noncompliance with federal procurement requirements, including inadequate competition, inconsistent purchasing practices, and insufficient documentation supporting procurement decisions. Questioned Costs: Unknown. Identification of a repeat finding: Not applicable. Context: The Foundation did not have written policies surrounding procurement so formal control procedures were not documented. However, procurement procedures were followed. Recommendation: We recommend the Foundation adopt a formal written procurement policy that complies with Uniform Guidance requirements under 2 CFR §200.317–§200.327. The policy should address procurement methods, competition requirements, conflict of interest standards, documentation requirements, contractor oversight, and suspension and debarment procedures. View of Responsible Management agrees with this recommendation. See prepared corrective action plan Officials: for details.