Audit 411357

2024-024: U.S. Department of Agriculture Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Special Milk Program for Children, 10.556 Summer Food Service Program for Children, 10.559 Fresh Fruit and Vegetable Program, 10.582 Other Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 10.555 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year. Total federal expenditures include the distribution or use of food commodities. Condition: Food commodities were reported for the wrong federal program in the SEFA. Cause: The Nevada Department of Agriculture (NDA) did not have adequate internal controls to ensure commodities were identified for the appropriate federal program in the SEFA. Effect: Prior to correction, commodities of $9,950,720 were identified under the National School Lunch Program, 10.555, rather than the Emergency Food Assistance Program, 10.569. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend NDA enhance internal controls to ensure commodities are identified for the appropriate federal program in the SEFA. Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.

2024-022: U.S. Department of Agriculture Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Special Milk Program for Children, 10.556 Summer Food Service Program for Children, 10.559 Fresh Fruit and Vegetable Program, 10.582 Reporting Significant Deficiency in Internal Control Over Compliance Grant Award Number: Affects all grant awards with pass-through payments included under assistance listings 10.555 and 10.556 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Department of Agriculture (NDA) is required to submit the FNS-10: Report of School Program Operations. Condition: Amounts reported on the FNS-10 report were not supported by the underlying accounting information. Cause: NDA did not have adequate internal controls to ensure FNS-10 reports were accurate or supporting documentation for reconciling items was maintained. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of three out of a population of 12 monthly FNS-10 reports was selected for testing. In addition, Part B of the FNS-10 report is only completed annually and the annual Part B reporting was also selected for testing. The following variance was noted in the annual Part B report: October 2023 FNS-10 Report (Part B) Amount Reported Amount Supported Line 10d – School Breakfast Program Average Daily Meals (Col E) 83 No Support Provided Line 10e – Sever Need School Breakfast Program Average Daily Meals (Col E) 83 No Support Provided Line 11a – National School Lunch Program Average Daily Meals (Col E) 50 No Support Provided Line 11b – NSLP Snacks Average Daily Meals (Col E) 30 No Support Provided Line 11c – School Breakfast Program Average Daily Meals (Col E) 60 No Support Provided Line 11d – Severe Need School Breakfast Program Average Daily Meals (Col E) 60 No Support Provided Line 16 – Number of Nonresidential Child Care Institutions (Col L) 2 No Support Provided Repeat Finding from Prior Year: No Recommendation: We recommend NDA enhance internal controls to ensure FNS-10 reports are accurate or supporting documentation for reconciling items is maintained. Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.

2024-023: U.S. Department of Agriculture Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Special Milk Program for Children, 10.556 Summer Food Service Program for Children, 10.559 Fresh Fruit and Vegetable Program, 10.582 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards with pass-through payments included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: No sampling was utilized. NDA pass-through obligations are under permanent agreements with amounts obligated each year to the subrecipients. There has been no documentation provided to support that these annual obligations are excluded from reporting under the FFATA. However, given the nature of the permanent agreements, NDA has not reported any of the obligations under FFATA. Total pass-through amounts for the year ended June 30, 2024 were $213,367,448 across 93 subrecipients. Repeat Finding from Prior Year: Yes – prior year finding 2023-022. Recommendation: We recommend NDA implement internal controls to ensure subaward information is submitted in accordance with the FFATA or to seek guidance for applicability towards permanent agreements with annual obligations. Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.

2024-026: U.S. Department of Treasury COVID-19 Homeowner Assistance Fund, 21.026 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities establish policies for subrecipient monitoring that have a risk-based approach to determine the appropriate monitoring. Pass-through entities ensure every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement. Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: The Nevada Housing Division (NHD) does not have subrecipient monitoring policies. Subawards and disbursements did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed. Lastly the assistance listing number was not communicated at the time of disbursement. Cause: NHD did not have internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected. Questioned Costs: None Context/Sampling: No subrecipient monitoring policies were in place at NHD. The entire population of one subrecipient was selected for testing, which included two payments. The subaward was missing required information, a risk assessment was not performed, and both payments were missing the assistance listing number. Repeat Finding from Prior Year: Yes – prior year finding 2023-029. Recommendation: We recommend NHD implement internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2024-027: U.S. Department of Treasury COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Cause: The Nevada State Purchasing Division of the Department of Administration (State Purchasing) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable contract provisions. Effect: Contractors may not be aware of required terms and conditions. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 procurement transactions out of approximately 3,400 was selected for testing, including 27 contracts subject to Appendix II to Part 200. We noted the following contract provision was missing: • Clean Air Act and Federal Water Pollution Control Act – 19 contracts missing this provision Repeat Finding from Prior Year: Yes – prior year finding 2023-030. Recommendation: We recommend State Purchasing enhance internal controls to ensure all contracts under federal awards contain the applicable provisions. Views of Responsible Officials: The Nevada State Purchasing Division of the Department of Administration agrees with this finding.

2024-028: U.S. Department of Treasury COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. The Nevada Governor’s Finance Office (GFO) must submit quarterly Project and Expenditure Reports that contain COVID-19 related costs and obligations incurred during the covered period. Critical information includes: • Current period obligation • Cumulative obligation • Current period expenditure • Cumulative expenditure • Revenue Loss Calculation • Capital Expenditures Condition: Certain amounts included in the reports submitted did not agree to underlying support. Cause: GFO did not have adequate internal controls to ensure Project and Expenditure Reports were reconciled to underlying supporting documentation. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two Project and Expenditure Reports from a population of four was selected for testing. Variances were noted as follows for cumulative impacts: Reporting Period Ended September 30, 2023: Amount Reported Amount Supported by Underlying Documentation Cumulative Obligations $1,014,916,952 $1,013,501,805 Reporting Period Ended March 31, 2024: Amount Reported Amount Supported by Underlying Documentation Current Period Expenditures $93,660,766 $93,663,991 Revenue Loss Allowance $3,225,231,412 $1,325,530,462 Repeat Finding from Prior Year: Yes – prior year finding 2023-031. Recommendation: We recommend the GFO enhance internal controls to ensure Project Expenditure Reports are reconciled to underlying supporting documentation. Views of Responsible Officials: The Nevada Governor’s Finance Office agrees with this finding.

2024-029: U.S. Department of Treasury COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: • Pass-through entities ensure every subaward is clearly identified to the subrecipient as a subaward. • Pass-through entities ensure every subaward includes certain information at the time of the subaward and the assistance listing number is communicated at the time of disbursement to subrecipients. • Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. • Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable. • Pass-through entities perform monitoring over subrecipients to attain reasonable assurance the subaward was used for authorized purposes. Condition: Subawards were missing required elements, assistance listing numbers were not communicated at the time of disbursement, an evaluation of the subrecipients risk for noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, subrecipient audit reports were not reviewed, and subrecipients were not monitored to ensure subawards were being used for authorized purposes. Cause: Adequate internal controls were not in place to ensure compliance with subrecipient monitoring requirements for the following agencies: • Attorney General’s Office • Department of Agriculture • Department of Conservation and Natural Resources • Department of Native American Affairs • Governor’s Finance Office • Governor’s Office of Economic Development • Housing Division • Judicial Office of the Courts Effect: Noncompliance at the subrecipient level may occur and not be detected. Questioned Costs: None Context/Sampling: A nonstatistical sample of 46 subrecipients out of a population of 246 across all State agencies was selected for testing. A nonstatistical sample of 60 passthrough payments out of a population of approximately 4,000 was selected for testing. The following errors were noted by agency: Attorney General’s Office We tested one subrecipient applicable to the Attorney General’s Office and noted a risk assessment was not performed and the subaward agreement did not contain all of the required provisions. Department of Agriculture We tested three subrecipients applicable to the Department of Agriculture. A risk assessment was not performed for any of the subrecipients. Department of Conservation and Natural Resources We tested four subrecipients applicable to the Department of Conservation and Natural Resources. All four subawards were missing required provisions. Department of Native American Affairs We tested two subrecipients applicable to the Department of Native American Affairs. A risk assessment was not performed for either subrecipient. Governor’s Finance Office We tested five subrecipients applicable to the Governor’s Finance Office. A risk assessment was not performed for one of the subrecipients tested. Governors’ Office of Economic Development We tested one subrecipient applicable to the Governor’s Office of Economic Development. A risk assessment was not performed, monitoring over the subrecipient did not take place, and it was not verified if the subrecipient was audited or if a management decision was necessary. Housing Division We tested two subrecipients applicable to the Housing Division. Both subawards were missing required provisions and risk assessments were not performed. We tested four pass-through payments applicable to the Housing Division. The assistance listing number was not communicated to the subrecipient at the time of payment for any of the payments. Judicial Office of the Courts We tested one subrecipient applicable to the Judicial Office of the Courts. The subaward was missing required provisions. Repeat Finding from Prior Year: Yes – prior year finding 2023-032. Recommendation: We recommend the State agencies listed above enhance internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The State of Nevada agrees with this finding.

2024-031: U.S. Department of Education Special Education (IDEA) Cluster Special Education Grants to States, 84.027 COVID-19 Special Education Grants to States, 84.027 Special Education Preschool Grants, 84.173 Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.027 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Local Educational Agencies (LEA) must meet a local maintenance of effort. IDEA, Part B funds received by an LEA cannot be used, except under certain limited circumstances, to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds, or a combination of state and local funds, below the level of those expenditures for the preceding fiscal year. To meet this requirement, LEAs must meet (1) the eligibility standard and (2) the compliance standard. The eligibility standard is budgeted expenditures and the compliance standard is actual expenditures. For purposes of establishing the LEA’s eligibility for an award for a fiscal year, the State Educational Agencies (SEA) must determine that the LEA is meeting the eligibility standard (34 CFR section 300.203(a)). Condition: The Nevada Department of Education (NDE) monitors the LEA’s maintenance of effort with regards to the compliance standard (actual expenditures) rather than to the eligibility standard (by budget). In addition, the actual expenditures used in the monitoring did not agree to the underlying supporting documentation. Cause: NDE did not have adequate internal controls to ensure the amounts used in monitoring the LEA maintenance of effort were accurate. Effect: LEA’s may not be in compliance with the maintenance of effort requirement and it may not be detected. Questioned Costs: None Context/Sampling: A non-statistical sample of four school districts out of a population of 18 was selected for testing. In addition, the State Public Charter School Authority (SPCSA) is a LEA and aggregates 43 underlying charter schools. A nonstatistical sample of five out of 43 charter schools was also selected for testing. For one school district, we noted the amounts did not agree to the underlying supporting records. However, when using the underlying supporting records, the school district still met the maintenance of effort. In addition, we could not verify the amounts reported for all five charter schools selected for testing. Although financial statements were maintained, the amounts used to monitor the maintenance of effort were not reconciled or maintained. Repeat Finding from Prior Year: No Recommendation: We recommend NDE enhance internal controls to ensure the amounts used in monitoring the LEA maintenance of effort is accurate. In addition, we recommend documentation sounding in the eligibility standard be maintained in accordance with 34 CFR section 300.230(a). Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2024-030: U.S. Department of Education Title I Grants to Local Educational Agencies, 84.010 Matching, Level of Effort, and Earmarking Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. A Local Educational Agency (LEA) may receive funds under Title I only if the State Educational Agency (SEA) finds that the combined fiscal effort per student or the aggregate expenditures of the LEA from State and local funds for free public education for the preceding year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year, unless specifically waived by the U.S. Department of Education (34 CFR section 299.5). Condition: The Nevada Department of Education (NDE) monitors the LEA fiscal effort; however, there was no documentation retained to evidence that two individuals (segregation of duties) were involved in the review of the LEA information. Cause: NDE did not have adequate internal controls to ensure maintenance of effort monitoring was reviewed by a party other than the preparer for accuracy and appropriate review of compliance. Effect: Noncompliance with maintenance of effort requirements may not be detected and NDE may not make required funding adjustments. Questioned Costs: None Context/Sampling: No sampling was performed, the maintenance of effort is monitored in an excel workbook as a whole. Repeat Finding from Prior Year: Yes – prior year finding 2023-034. Recommendation: We recommend NDE enhance internal controls to ensure maintenance of effort monitoring is reviewed by a party other than the preparer for accuracy and appropriate review of compliance. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2024-032: U.S. Department of Education COVID-19 Education Stabilization Fund, 84.425 Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance Grant Award Number: Affects grant award S425U210018 included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides the following requirements: • ESSER o A State Educational Agency (SEA) must allocate at least 90% of ESSER funds to Local Educational Agencies (LEA) using the statutorily prescribed formula. • ARP ESSER o Under section 2001(f) of the ARP act, each SEA must reserve: (1) at least 5% of ARP ESSER funds for evidence-based interventions that address the academic impact of lost instructional time; (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs. • Allowances for Administrative Costs o Under section 18001(e) of the CARES act and section 313(e) of the CRRSA act, an SEA may reserve up to 0.5% of its total ESSER I and ESSER II allocations for administrative cost. o Under Section 2001(f)(4) of the ARP Act, an SEA may reserve not more than 0.5% of the state’s total ARP ESSER award for administrative costs. o Under section 312(d)(5) of the CRRSA Act, an SEA may reserve up to 0.5% of it’s total allocation or up to $200,000, whichever is greater, to administer the EANS program. Condition: The Nevada Department of Education (NDE) did not meet the earmarking set aside for evidence-based summer enrichment programs and evidence-based after school programs. In addition, there is no evidence that compliance with the earmarking requirements (i.e., actual amounts meeting the allocations or that there could be future changes to allocated amounts) is monitored. Cause: NDE did not have adequate internal controls to ensure earmarking requirements were initially met and to ensure on-going compliance was monitored. Effect: Earmarking requirements were not met and may not be met in the future. Questioned Costs: None Context/Sampling: We tested all earmarking computations required to be completed in State fiscal year 2023. There was no evidence of monitoring the earmarking requirements. Under section 2001(f) of the ARP act, each SEA must reserve: (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs. • The minimum amount to allocate to evidence-based summer enrichment programs and evidence-based after school programs was $21,455,664 and the actual amount allocated was $21,087,689. The allocated amounts above were identified and reported in the prior year. However, there was no evidence of adjustments to these allocations in the current year. Repeat Finding from Prior Year: Yes – prior year finding 2023-035. Recommendation: We recommend NDE enhance internal controls to ensure earmarking requirements are initially met and implement internal controls to ensure ongoing compliance is monitored. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2024-033: U.S. Department of Education COVID-19 Education Stabilization Fund, 84.425 Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must: • Maintain state support for elementary and secondary education in fiscal year (FY) 2023 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and • Maintain state support for higher education in FY 2023 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019. The CRRSA and ARP Acts have two MOE baselines: • Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019). • Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019). Condition: The Nevada Department of Education (NDE) did not maintain the underlying supporting documentation or reconciliations to support amounts reported for the overall state spending. NDE reported state expenditure amounts for elementary and secondary education as well as higher education, with a failure to meet the maintenance of effort as a percentage of overall state spending. However, as noted above, the amounts reported for the overall state spending could not be verified. Lastly, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the maintenance of effort calculations. Cause: NDE did not have internal controls to ensure maintenance of effort was tracked, complied with, and supporting documents maintained. Effect: Maintenance of effort requirements may not be met. Questioned Costs: None Context/Sampling: We tested maintenance of effort computations required to be completed in State fiscal year 2024 (fiscal year 2023 actual amounts). As noted above, the amounts reported for overall state spending could not be verified. However, NDE’s reported amounts indicated that the maintenance of effort was not met as follows: Elementary and Secondary Education • Baseline percentage reported as 37.11% and actual percentage for state fiscal year 2023 was reported as 36.79%. Higher Education • Baseline percentage reported as 15.47% and actual percentage for state fiscal year 2022 was reported as 15.32%. Repeat Finding from Prior Year: Yes – prior year finding 2023-036. Recommendation: We recommend NDE implement internal controls to ensure maintenance of effort is tracked, complied with, and supporting documents maintained. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2024-034: U.S. Department of Education COVID-19 Education Stabilization Fund, 84.425 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including mandatory reservations. Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Certain amounts included in the annual reports submitted did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of the reports. Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance. Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely. Questioned Costs: None Context/Sampling: All six annual reports required to be filed in the fiscal year were selected for testing; three reports for ESSER, two for GEER and one for EANS. Variances were noted as follows: ESSER I Year 4 Annual Report • Amounts reported for key line 3b.1 – LEA expenditures by ESSER subgrant fund, expenditure category, and object code o Support for two schools reported was not maintained o Three schools did not agree to the underlying support, with variances ranging from variances of $367 to $746,160 • Amounts reported for key line 3c – allocation of ESSER funds to schools and criteria used to allocate funds to schools o Support for three schools reported was not maintained o Seven schools were improperly excluded from the report ESSER II Year 3 Annual Report • Amounts reported for key line 3b.1 – LEA expenditures by ESSER subgrant fund, expenditure category, and object code o One school was improperly excluded from the report o 22 schools did not agree to underlying support, with variances ranging from $64 to $113,620,036. ESSER III Year 3 Annual Report • Amounts reported for key line 3b.1 – LEA expenditures by ESSER subgrant fund, expenditure category, and object code o Support for one school reported was not maintained o Seven schools were improperly excluded from the report o Ten schools did not agree to underlying support, with variances ranging from $6 to $150,869,445 All ESSER Reports • Amounts reported for key line 5a – full time equivalent positions o Support for three schools reported was not maintained o Nine schools did not agree to the underlying support, with variances ranging from 3.98 FTE to 252 FTE • Amounts reported for key line 3b.10 – Number of specific positions supported with ESSER funds o Support for three schools reported was not maintained o Six schools were improperly excluded from the report o Eight schools did not agree to the underlying support, with variances ranging from 0.5 FTE to 175 FTE GEER I Year 4 Report • Amounts reported for Key Line 2.c and 2.d – administrative and nonadministrative expenditures by Governors o Support was not maintained • Amounts reported for key line 9.a – reporting on LEA expenditures by GEER subgrant fund and expenditure category o Three schools did not agree to the underlying support, with variances ranging from $6,419 to $60,495 • Amounts reported for key line 10.a and 11.a – reporting IHE expenditures by GEER subgrant and expenditure category o One school did not agree to the underlying support, with a variance of $4,000,237 GEER II Year 3 Report • Amounts reported for Key Line 2.c and 2.d – administrative and nonadministrative expenditures by Governors o Support was not maintained • Amounts reported for key line 9.a – reporting on LEA expenditures by GEER subgrant fund and expenditure category o Support was not maintained for two schools o Two schools did not agree to the underlying support, with variances ranging from $676 to $63,578 EANS Year 3 Annual Report • Amounts reported for Key Line 13 – reporting on SEA obligations by allowable activity for CRRSA EANS o Support was not maintained • Amounts reported for key line 15 – reporting on non-public schools receiving services or assistance under CCRSA EANS o Support for four schools was not maintained o Two schools did not agree to the underlying support, with variances ranging from 7 to 12 students Lastly, there was no evidence of review and approval (segregation of duties) for all reports tested. Repeat Finding from Prior Year: Yes – prior year finding 2023-037. Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2024-035: U.S. Department of Education COVID-19 Education Stabilization Fund, 84.425 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards with pass-through payments included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Condition: Required subaward information was not reported timely in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Department of Education (NDE) did not have internal controls to ensure subaward information was submitted timely in accordance with the FFATA. Effect: Subaward information was not reported timely to FSRS. Questioned Costs: None Context/Sampling: A nonstatistical sample of three out of a population of eight applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 3 $858,931 Not Reported 0 $0 Not Timely 1 $99,210 Obligation Incorrect 0 $0 Missing Key Elements 0 $0 The one subaward that was not submitted timely was entered into in August 2023 and submitted to the FSRS in December 2023. Repeat Finding from Prior Year: No Recommendation: We recommend NDE implement internal controls to ensure subaward information is submitted timely in accordance with the FFATA. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2024-059: U.S. Department of Education Special Education (IDEA) Cluster Special Education Grants to States, 84.027 COVID-19 Special Education Grants to States, 84.027 Special Education Preschool Grants, 84.173 U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 COVID-19 Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Cash Management Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.027 and 93.575 on the Schedule of Expenditures of Federal Awards. Criteria: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of Federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. The major federal assistance program threshold for the State of Nevada’s 2024 Treasury-State Agreement was $60,000,000 in accordance with 31 CFR Part 205.5, which was determined based on the State’s Single Audit for the year ended June 30, 2021. Condition: Major federal assistance programs were not included in the State of Nevada’s Treasury-State Agreement as required. Cause: The State of Nevada Controller’s Office (SCO) did not have adequate internal controls to ensure major federal assistance programs were completely identified. Effect: Two assistance listing programs were not subject to the specific methods of drawing down federal funds that would have been negotiated within the Treasury-State Agreement. Questioned Costs: None Context/Sampling: No sampling was used. We reviewed the expenditures by assistance listing on the State of Nevada’s Schedule of Expenditures of Federal Awards for the year ended June 30, 2021. We noted Special Education Grants to States, 84.027, and the Child Care and Development Block Grant, 93.575, both exceeded $60,000,000 and were not included. In addition, there was no documentation available to support whether these programs met any allowable exclusions or exemptions. Repeat Finding from Prior Year: No Recommendation: We recommend SCO enhance internal controls to ensure major federal assistance programs are completely identified. Views of Responsible Officials: The State of Nevada Controller’s Office agrees with this finding.

2024-045: U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 COVID-19 Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Matching, Level of Effort, and Earmarking Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Applicable to the matching fund (assistance listing 93.596), state expenditures will be matched at the Federal Medical Assistance Percentage (FMAP) rate for the applicable fiscal year. Private or public donated funds may be counted as state expenditures for this purpose subject to the limitations in 45 CFR section 98.53. Condition: The Nevada Division of Social Services (DSS) utilizes donated in-kind services from partner agencies and subrecipients to satisfy the match requirement for the matching fund. The in-kind services are cumulatively tracked and applied against the required match. During our audit procedures, we noted instances where the amount reported for matching expenditures did not agree to the in-kind cumulative tracker and instances where the underlying support (certified match letters received from partner agencies and subrecipients) did not agree to the tracker. Cause: DSS did not have adequate internal controls to ensure the in-kind service match amounts are reconciled and reported accurately. Effect: Inaccurate amounts available for match may be maintained and may impact whether the matching requirement is met. Questioned Costs: None Context/Sampling: The matching fund was tested for the federal fiscal year 2021 matching grant, which had a period performance end of September 30, 2023. The match required was $9,070,648. The match reconciled in the cumulative balance tracker was $10,087,427. The match contributed from partner agencies and subrecipients from support maintained was noted as $8,731,155; however, the cumulative available match available from prior years exceeded $45 million and was adequate for the required current year match of $9,070,648. Repeat Finding from Prior Year: Yes – prior year finding 2023-047. Recommendation: We recommend DSS enhance internal controls to ensure in-kind service match amounts are reconciled and reported accurately. Views of Responsible Officials: The Nevada Division of Social Services agrees with this finding.

2024-046: U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 COVID-19 Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects grant award 2201NVCCDF included under assistance listing 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. The Nevada Division of Social Services (DSS) must submit the ACF-696, Child Care and Development Fund Financial Reports quarterly. Condition: Certain amounts reported on the ACF-696 did not agree to underlying documentation. Cause: DSS did not have internal controls to ensure the amounts reported were adequately documented and supported. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of four reports out of a population of 16 submitted during the audit period was selected for testing. Variances were noted as follows for one report: Quarter Ended September 30, 2023 (FFY2022 – 2201NVCCDF) Amount Reported Amount Supported Line 1 – Total Expenditures $20,938,630 $25,544,805 Line 2a – State Share of Expenditures – Regular (col B) $0 $4,606,175 Repeat Finding from Prior Year: Yes – prior year finding 2023-048. Recommendation: We recommend DSS implement internal controls to ensure the amounts reported are adequately documented and supported. Views of Responsible Officials: The Nevada Division of Social Services agrees with this finding.

2024-047: U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 COVID-19 Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards with pass-through payments included under assistance listings 93.575 and 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Division of Social Services (DWSS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS, and, therefore, not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: A nonstatistical sample of three out of a population of four applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 3 $66,798,513 Not Reported 1 $60,535,465 Not Timely 3 $66,798,513 Obligation Incorrect 1 $60,535,465 Missing Key Elements 1 $60,535,465 The subaward obligations were reported non-timely, all more than a year late, if reported. Repeat Finding from Prior Year: Yes – prior year finding 2023-049. Recommendation: We recommend DSS implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Division of Social Services agrees with this finding.

2024-036: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases, 93.323 COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases, 93.323 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.323 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Cause: The Nevada State Purchasing Division of the Department of Administration (State Purchasing) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable contract provisions. Effect: Contractors may not be aware of required terms and conditions. Questioned Costs: None Context/Sampling: A nonstatistical sample of 40 procurement transactions out of approximately 1,320 was selected for testing, including 7 contracts subject to Appendix II to Part 200. We noted the following contract provisions were missing: • Debarment and Suspension – one contract missing this provision • Termination for cause and convenience – one contract missing this provision • Legal remedies for breach of contract – one contract missing this provision • Byrd Anti-Lobbying – one contract missing this provision • Clean Air Act and Federal Water Pollution Control Act – four contracts missing this provision Repeat Finding from Prior Year: No Recommendation: We recommend State Purchasing enhance internal controls to ensure all contracts under federal awards contain the applicable provisions. Views of Responsible Officials: The Nevada State Purchasing Division of the Department of Administration agrees with this finding.

2024-037: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases, 93.323 COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases, 93.323 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.323 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. The Nevada Division of Public and Behavioral Health (DPBH) must submit certain quarterly fiscal reports in accordance with the grant agreements. Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Certain amounts included in the reports submitted did not agree to underlying support. Additionally, DPBH did not have internal controls in place to document the review by an individual independent of the preparation of the reports (segregation of duties). Cause: DPBH did not have adequate internal controls to ensure quarterly fiscal reports were reviewed by a person other than the preparer and that certain information reconciled to underlying supporting documentation. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of six Quarterly Fiscal Reports out of a population of 40 was selected for testing. Variances were noted as follows: Reporting Period Ended March 31, 2024 (6 NU50CK000560-01-06): Amount Reported Amount Supported Contractual Expenditures $3 $385 Total Expenditures $2,319 $2,701 In addition, there was no evidence of segregation of duties for all six reports tested. Repeat Finding from Prior Year: No Recommendation: We recommend the DPBH enhance internal controls to ensure Quarterly Fiscal Reports are reconciled to underlying supporting documentation and are reviewed by an individual independent of the preparation of the reports. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2024-038: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases, 93.323 COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases, 93.323 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards with payments to subrecipients included under assistance listing 93.323 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Division of Public and Behavioral Health (DPBH) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS, and, therefore, not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: A nonstatistical sample of seven out of a population of 29 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 7 $57,497,399 Not Reported 1 $5,988,542 Not Timely 1 $5,988,542 Obligation Incorrect 1 $5,988,542 Missing Key Elements 1 $5,988,542 Repeat Finding from Prior Year: No Recommendation: We recommend DPBH enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2024-039: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases, 93.323 COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease, 93.323 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards with pass-through payments included under assistance listing 93.323 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: • Pass-through entities perform monitoring over subrecipients to attain reasonable assurance the subaward was used for authorized purposes. The Nevada Division of Public and Behavioral Health’s (DPBH) subrecipient monitoring policy describes the scope and procedures to be performed to ensure reasonable assurance of subrecipient compliance is obtained. As part of those procedures, a subrecipient onsite monitoring visit is conducted at a minimum of at least once in a two-year period. Condition: Onsite monitoring was not performed in accordance with policy. Cause: DPBH did not have adequate internal controls in place to ensure compliance with its subrecipient monitoring policy occurred. Effect: Noncompliance at the subrecipient level may occur and not be detected. Questioned Costs: None Context/Sampling: A nonstatistical sample of six subrecipients out of a population of 27 was selected for testing. Onsite monitoring procedures within a two-year period were not completed for all six subrecipients tested. Repeat Finding from Prior Year: No Recommendation: We recommend DPBH enhance internal controls to ensure compliance with its subrecipient monitoring policies. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2024-040: U.S. Department of Health and Human Services Temporary Assistance for Needy Families, 93.558 COVID-19 Temporary Assistance for Needy Families, 93.558 Matching, Level of Effort, and Earmarking Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.558 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. As provided by 45 CFR section 264.1, the average monthly number of families that include an adult or minor child head of household, or the spouse of the head of household, who has received assistance under any state program funded by federal TANF funds for more than 60 countable months (whether or not consecutive) may not exceed 20 percent of the average monthly number of all families to which the state provided assistance during the fiscal year or the immediately preceding fiscal year (but not both), as the state may elect. Condition: The Nevada Division of Social Services (DSS) compiles the caseload criteria above in a TANF NEON Cash Cases Hardship Report. There was no evidence that this report was approved, reviewed, or otherwise monitored. Cause: DSS did not have internal controls to ensure caseload earmarking requirements are monitored. Effect: Noncompliance with earmarking requirements may not be detected. Questioned Costs: None Context/Sampling: The caseload report was generated for the entire state fiscal year. The average cases with more than 60 countable months were 0.21% of the total cases for the state fiscal year, which is below the 20% maximum allowed. However, this report is generated internally by DWSS on a quarterly basis (and aggregated to be summarized annually), and there was no evidence of a review being performed. Repeat Finding from Prior Year: Yes – prior year finding 2023-038. Recommendation: We recommend DSS enhance internal controls to ensure caseload earmarking requirements are monitored. Views of Responsible Officials: The Nevada Division Social Services agrees with this finding.

2024-041: U.S. Department of Health and Human Services Temporary Assistance for Needy Families, 93.558 COVID-19 Temporary Assistance for Needy Families, 93.558 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects grant award 2301NVTANF-01 included under assistance listing 93.558 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. The Nevada Division of Social Services (DSS) must submit the ACF-196R, TANF Financial Reports quarterly and the ACF-204, TANF Financial Reports annually. Condition: Certain amounts reported on the ACF-196R and ACF-204 did not agree to underlying documentation. Cause: DSS did not have internal controls to ensure the amounts reported on the ACF- 196R and ACF-204 were adequately documented and supported. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of seven ACF-196R reports out of a population of 14 submitted during the audit period was selected for testing. Variances were noted as follows: Quarter Ended March 31, 2024 (Grant Year 2024 –2301NVTANF-01) Amount Reported Amount Supported Line 6a – Basic Assistance (Col B) $26,381,804 $24,607,810 Line 6a – Basic Assistance (Col C) $9,385,040 $0 Line 9a – Subsidized Employment (Col B) $0 $44,000 Line 9b – Education and Training (Col C) $0 $11,670 Amount Reported Amount Supported Line 9c – Additional Work Activities (Col B) $0 $590,632 Line 10 – Work Supports (Col C) $0 $152 Line 11a- Child Care (Col C) $0 $5,812,594 Line 12 – Financial Education and Asset Development (Col C) $0 $9,332 Line 15 – Non – Recurrent Short-Term Benefits (Col C) $0 $1,769,623 Line 16- Supportive Services (Col B) $0 $952,887 Line 16- Supportive Services (Col C) $0 $1,563,479 Line 17 – Services for Children and Youth (Col C) $0 $655,000 Line 18 – Prevention of Out-of-Wedlock Pregnancies (Col C) $0 $7,210 Line 20a – Family Support/Family Preservation/Reunification Services (Col C) $0 $5,980 No sampling was used for the annual ACF-204 report. The following error was noted for the Grant Period 2301NVTANF (Report Period 10/1/22 – 9/30/23) report: Amount Reported Amount Supported Total State MOE Expenditures for the Program for the Fiscal Year (Attachment B0 Line 7) $31,134,064 $32,134,064 Repeat Finding from Prior Year: No Recommendation: We recommend DSS implement internal controls to ensure the amounts reported on the ACF-196R and ACF-204 are adequately documented and supported. Views of Responsible Officials: The Division of Social Services agrees with this finding.

2024-042: U.S. Department of Health and Human Services Temporary Assistance for Needy Families, 93.558 COVID-19 Temporary Assistance for Needy Families, 93.558 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards with pass-through payments included under assistance listing 93.558 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Division of Social Services (DSS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS, and, therefore, not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: A nonstatistical sample of two out of a population of four was originally selected for testing. However, upon testing it was noted that no reports were submitted for the program during the fiscal year. Therefore, the aggregate quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 4 $10,213,767 Not Reported 4 $10,213,767 Not Timely 4 $10,213,767 Obligation Incorrect 4 $10,213,767 Missing Key Elements 4 $10,213,767 Repeat Finding from Prior Year: Yes – prior year finding 2023-039. Recommendation: We recommend DSS implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Division of Social Services agrees with this finding.

2024-043: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 COVID-19 Low-Income Home Energy Assistance, 93.568 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. In addition, DSS is required to submit the LIHEAP Quarterly Performance and Management Report each quarter, which includes certain data and information about LIHEAP during the current fiscal year including success, challenges, needs, and innovations. Condition: Amounts reported for obligated funds did not have underlying documentation to support the amount reported. Cause: DSS did not have adequate internal controls to ensure amounts reported on the LIHEAP Quarterly Performance and Management Report were appropriately supported. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two out of a population of four quarterly LIHEAP Quarterly Performance and Management Report’s was selected for testing. Variances are noted as follows: LIHEAP Quarterly Performance Management Report (1/1/24 – 3/31/24) Amount Reported Amount Supported Section 3 Line 1 – Amount of Funds Obligated $4,729,253 $0 Repeat Finding from Prior Year: Yes – prior year finding 2023-044. Recommendation: We recommend DSS enhance internal controls to ensure amounts reported on the LIHEAP Quarterly Performance and Management Report are appropriately supported. Views of Responsible Officials: The Nevada Division of Social Services agrees with this finding.

2024-044: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 COVID-19 Low-Income Home Energy Assistance, 93.568 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards with pass-through payments included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: We tested the entire population of 4 subawards obligated during the year. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 4 $1,194,371 Not Reported 4 $1,194,371 Not Timely 4 $1,194,371 Obligation Incorrect 4 $1,194,371 Missing Key Elements 4 $1,194,371 Repeat Finding from Prior Year: Yes – prior year finding 2023-046. Recommendation: We recommend NHD implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2024-048: U.S. Department of Health and Human Services Children’s Health Insurance Program (CHIP), 93.767 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Health Authority (NVHA) is required to submit Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program (CMS-21) reports based on actual recorded expenditures (42 CFR 430.30). Condition: Amounts reported on the CMS-21 were not supported by the underlying accounting information. Cause: NVHA did not have adequate internal controls to ensure CMS-21 reports were accurate or supporting documentation for reconciling items was maintained. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two CMS-21 reports out of a population of four was selected for testing. NVHA was unable to provide support for the following variances: December 31, 2023 CMS-21 Report Amount Reported Amount Supported Line 1a – Premiums Up to 150% of Poverty Level – Gross Premiums Paid $12,790,058 $10,620,925 Line 9 – Dental Services $603,625 $2,772,759 Line 18 – Screening Services $54,880 $57,168 March 31, 2024 CMS-21 Report Amount Reported Amount Supported Line 1a – Premiums Up to 150% of Poverty Level – Gross Premiums Paid $9,192,633 $7,629,522 Line 8 – Prescribed Drugs $295,759 $321,092 Line 9 – Dental Services $755,375 $2,318,487 Repeat Finding from Prior Year: No Recommendation: We recommend NVHA enhance internal controls to ensure CMS-21 reports are accurate and supporting documentation is maintained. Views of Responsible Officials: The Nevada Health Authority agrees with this finding.

2024-049: U.S. Department of Health and Human Services Children’s Health Insurance Program (CHIP), 93.767 Other Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year. Condition: Subrecipient amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Health Authority (NVHA) did not have adequate internal controls to ensure payments to providers were not coded as subrecipient payments in accordance with the State of Nevada’s accounting policy. Effect: Prior to correction, amounts passed through to subrecipients on the SEFA were overstated by $977,084. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend NVHA enhance internal controls to ensure payments to providers are not coded as subrecipient payments in accordance with the State of Nevada’s accounting policy. Views of Responsible Officials: The Nevada Health Authority agrees with this finding.

2024-050: U.S. Department of Health and Human Services Children’s Health Insurance Program (CHIP), 93.767 Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.767 and 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: Title 42 Public Health section 435.403 State Residence provides that the State must provide Medicaid to eligible residents of the State, including residents who are absent from the State, except in cases where another state has determined that the person is a resident there for purposes of Medicaid. The Medicaid State Plan provides that the State has an eligibility determination system for data matching through the Public Assistance Reporting Information System (PARIS). The information that is requested is to be exchanged with states and other entities legally entitled to verify Title XIX applications and individuals eligible for covered Title XIX services consistent with applicable PARIS agreements. The State will transmit and receive data quarterly (February, May, August, and November). The State enrolls beneficiaries on a mandatory basis into managed care entities (managed care organizations and/or primary care case managers) in the absence of certain allowable waivers. The State contracts with managed care organizations and reimburses them for capitation payments. Condition: PARIS data was not utilized by the Nevada Health Authority (NVHA) or the Nevada Division of Social Services (DSS) to monitor residency changes to determine when managed care benefits needed to be terminated because the beneficiary was a resident of another state for Medicaid purposes. Cause: NVHA and DSS did not have internal controls in place to effectively communicate the PARIS data between the two agencies to ensure managed care benefits were terminated when appropriate. Effect: Individuals are enrolled in Medicaid (and CHIP) plans in multiple states and benefits are not being terminated timely. Therefore, the State of Nevada is paying capitation payments to managed care organizations, when the benefits should have been terminated. Questioned Costs: Projected questioned costs are $16,257,975 for Medicaid and $1,111,448 for CHIP. Context/Sampling: No sampling was used. The PARIS data was obtained and examined in total. The PARIS data included 50,007 participants with dual enrollment. Of those 50,007 participants, 11,654 participants were enrolled in another state after the State of Nevada. The projected questioned costs were estimated by performing the following: • Identifying individuals who enrolled in another state after they had enrolled in Nevada (termination date for Nevada). • Estimating a weighted average capitation payment based on demographics that determine the payment amount. • Applying the weighted average capitation payments from the termination date through June 30, 2024 to determine the total projected questioned costs. • The total projected questioned costs were then allocated between Medicaid and CHIP using participant counts in each plan between the ages of 0-18. Participants older than 18 were allocated to Medicaid. The allocated projected questioned costs were then multiplied by a weighted average Federal Medical Assistance Percentage (FMAP) to determine the final projected federal questioned costs. Repeat Finding from Prior Year: Yes – prior year finding 2023-054. Recommendation: We recommend NVHA and DSS implement internal controls to effectively communicate the PARIS data between each other and to ensure managed care benefits are terminated when appropriate. Views of Responsible Officials: The Nevada Health Authority and the Nevada Division of Social Services agrees with this finding.

2024-051: Social Security Administration Disability Insurance/SSI Cluster: Social Security – Disability Insurance, 96.001 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects grant award 04-2204NVDI00 included under assistance listing 96.001 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. The Nevada Division of Employment, Training and Rehabilitation (DETR) must submit the SSA-4513, State Agency Report of Obligations for SSA Disability Programs quarterly for each fiscal year still open in order to account for program disbursement and unliquidated obligations (POMS DI 39506.202). Condition: Certain amounts reported on the SSA-4513 did not agree to underlying documentation. Cause: DETR did not have internal controls to ensure the amounts reported were adequately documented and supported. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of ten reports out of a population of 21 submitted during the audit period was selected for testing. Variances were noted as follows: Quarter Ended March 31, 2024 (FFY2024 – 04-2204NVDI00) Amount Reported Amount Supported Line 1 – Personnel Service Costs (col A) $6,917,131 $6,918,176 Line 1 – Personnel Service Costs (col B) $164,294 $163,250 Repeat Finding from Prior Year: No Recommendation: We recommend DETR implement internal controls to ensure the amounts reported are adequately documented and supported. Views of Responsible Officials: The Nevada Division of Employment, Training and Rehabilitation agrees with this finding.

2024-052: Social Security Administration Disability Insurance/SSI Cluster Social Security – Disability Insurance, 96.001 Special Tests and Provisions – Qualified Providers Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 96.001 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 20 U.S Code of Federal Regulations (CFR) Part 404 Federal Old-Age, Survivors and Disability Insurance states that each State agency is responsible for comprehensive oversight management of its process and for ensuring accuracy, integrity, and economy of its process. As part of these duties, disability determination services must have, and follow, procedures for performing medical license verifications to ensure that only qualified providers perform disability determination services’ task. Condition: The Nevada Division of Employment, Training and Rehabilitation (DETR) does not have written procedures for verifying, before engaging the services of a provider and at least annually thereafter, whether provides have valid medical licenses and are not currently excluded, suspended, or barred from participation in federal or federally assisted programs; and whose license to provide health care is not currently lawfully revoked or suspended by any state licensing authority for reasons of fraud, abuse, or professional misconduct. In addition, DETR has an individual assigned to this task as part of the position’s job duties. However, there is no evidence of monitoring by someone other than the individual (segregation of duties and oversight) that this procedure was followed and the results were appropriate. Cause: DETR does not have written procedures in place for this process. Effect: Providers may not have valid medical licenses or be suspended or debarred and not detected. Questioned Costs: None Context/Sampling: DETR does not have written policies and procedures. A nonstatistical sample of ten out of a population of 41 providers (i.e., medical staff, consultative examination providers, medical consultants, and psychological consultants). All were appropriately verified but the results were not monitored or reviewed by an individual other than the individual performing the verification. Repeat Finding from Prior Year: No Recommendation: We recommend DETR develop written policies and procedures over this process and implement a review and monitoring procedure to ensure the task has been completed accurately and timely. Views of Responsible Officials: The Nevada Division of Employment, Training, and Rehabilitation agrees with this finding.

2024-053: U.S. Department of Homeland Security Homeland Security Grant Program, 97.067 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 97.067 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.430 provides that: • Charges to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must: o Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; o Be incorporated into the official records of the subrecipient; o Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities; o Encompass federally-assisted and all other activities compensated by the recipient on an integrated basis but may include the use of subsidiary records as defined in the recipient’s written policy; o Comply with the established accounting policies and procedures of the recipient; o Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity; o Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes provided that all necessary adjustments are made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: The Nevada Division of Emergency Management (DEM) did not have underlying supporting documentation to support the allocation of employee payroll to the grant program. Cause: DEM did not have internal controls to ensure documentation to support the distribution of the employee’s salary or wages was maintained. Effect: Personnel costs may be charged to the program that are not representative of the actual time spent. Questioned Costs: $698,756 Context/Sampling: A nonstatistical sample of 40 transactions ($42,821) out of a population of 682 transactions ($698,756) was selected for testing. No underlying or subsidiary documentation to support the distribution of employee compensation was provided for any of the sample transactions. Given this, we questioned the entire payroll related population of $698,756. Repeat Finding from Prior Year: No Recommendation: We recommend DEM implement internal controls to ensure documentation to support the distribution of the employee’s salary or wages is maintained. Views of Responsible Officials: The Nevada Division of Emergency Management partially agrees with this finding as specified in the corrective action plan. Auditor’s Comments to Views of Responsible Officials: The Uniform Guidance requires entities to demonstrate compliance. While DEM is in partial agreement as more fully described in their corrective action plan, our finding is predicated on the fact that allowable costs must be adequately documented. DEM could not produce the documentation in accordance with standards for documentation of our sampled payroll records.

2024-054: U.S. Department of Homeland Security Homeland Security Grant Program, 97.067 Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 97.067 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. As directed by section 2008(b)(2) of the Homeland Security Act of 2002 (codified as amended at 6 USC 609(b)(2)), all personnel and personnel-related costs, including those of intelligence analysts and operational overtime, are allowed up to 50 percent of HSGP funding without time limitation placed on the period of time that such personnel can serve. Condition: Support that demonstrated this requirement was monitored and evaluated was not provided. Cause: The Nevada Division of Emergency Management (DEM) did not have adequate internal controls to ensure personnel and personnel-related costs funded by HSGP were tracked, accumulated, and monitored for compliance with the earmarking requirement. Effect: Noncompliance with earmarking requirements may not be detected by DEM. Questioned Costs: None Context/Sampling: Personnel and personnel-related costs occur at both DEM and its subrecipients. At least 80% of the HSGP funding is provided to subrecipients where budgets are developed by program area. However, the personnel and personnel-related costs within the program areas are not accumulated, combined with DEM’s own costs, and evaluated for compliance with the 50% earmarking requirement. Therefore, this information was not provided for us to conclude the requirement was met. Repeat Finding from Prior Year: No Recommendation: We recommend DEM enhance internal controls to ensure personnel and personnel-related costs funded by HSGP are tracked, accumulated, and monitored for compliance with the earmarking requirement. Views of Responsible Officials: The Nevada Division of Emergency Management disagrees with this finding as specified in the corrective action plan. Auditor’s Comments to Views of Responsible Officials: The Uniform Guidance requires entities to demonstrate compliance. While we appreciate all the activities that DEM performs as described in their corrective action plan, ultimately DEM was unable to demonstrate that it complied with the requirement. There was no documentation made available for audit that would indicate DEM either met or did not meet the requirement as it was not monitored or compiled at an aggregate level.

2024-055: U.S. Department of Homeland Security Homeland Security Grant Program, 97.067 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listings 97.067 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. The Nevada Division of Emergency Management (DEM) is required to submit the SF-425, Federal Financial Report on a quarterly basis. Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Certain amounts included in the reports submitted did not agree to underlying support. Additionally, DEM did not have internal controls in place to document the review by an individual independent of the preparation of the reports (segregation of duties). Cause: DEM did not have adequate internal controls to ensure SF-425 reports were reviewed by a person other than the preparer and that reported information reconciled to underlying supporting documentation. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample nine out of a population of 17 SF-425 reports was selected for testing. A variance was noted as follows: Quarter End 9/30/2023 Grant Award EMW-2023-SS-00044 Amount Reported Amount Supported d. Total Federal Funds Authorized $0 $10,097,500 In addition, there was no evidence of segregation of duties for all nine reports tested. Repeat Finding from Prior Year: No Recommendation: We recommend DEM enhance internal controls to ensure SF-425 reports are reviewed by a person other than the preparer and that reported information reconciles to the underlying supporting documentation. Views of Responsible Officials: The Nevada Division of Emergency Management agrees with this finding.

2024-056: U.S. Department of Homeland Security Homeland Security Grant Program, 97.067 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards with pass-through payments included under assistance listing 97.067 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Required subaward information reported in the FFATA Subaward Reporting System (FSRS) did not have evidence of review and approval by an individual independent of the submission of the information. Cause: The Nevada Division of Emergency Management (DEM) did not have internal controls to evidence review (segregation of duties) of subaward information submitted in accordance with the FFATA. Effect: Subaward obligations may not be accurately reported in the FSRS, and, therefore, the public information on FFATA’s website may be in error. Questioned Costs: None Context/Sampling: A nonstatistical sample of six out of a population of 39 applicable subaward obligations was selected for testing. There was no evidence of review for all six subaward obligations tested. Subawards Obligations Total Tested 6 $2,314,263 Not Reported 0 $0 Not Timely 0 $0 Obligation Incorrect 0 $0 Missing Key Elements 0 $0 Repeat Finding from Prior Year: No Recommendation: We recommend DEM implement internal controls to evidence review (segregation of duties) of subaward information submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Division of Emergency Management agrees with this finding.

2024-057: U.S. Department of Homeland Security Homeland Security Grant Program, 97.067 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards with pass-through payments included under assistance listing 97.067 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: • Pass-through entities ensure every subaward includes certain information at the time of the subaward. • Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. • Pass-through entities perform monitoring over subrecipients to attain reasonable assurance the subaward was used for authorized purposes. Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, and monitoring procedures were not performed. Cause: The Nevada Division of Emergency Management (DEM) did not have adequate internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected. Questioned Costs: None Context/Sampling: A nonstatistical sample of three subrecipients out of a population of 14 was selected for testing. All three subawards were missing required information, a risk assessment was not performed for any of the subrecipients, and one subrecipient was not monitored. Repeat Finding from Prior Year: No Recommendation: We recommend DEM implement internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Division of Emergency Management agrees with this finding.

2024-058: U.S. Department of Homeland Security Homeland Security Grant Program, 97.067 Special Tests and Provisions – Subgrant Awards Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects grant award EMW-2023-SS-00044 included under assistance listing 97.067 on the Schedule of Expenditures of Federal Awards. Criteria: States (with the exception of the District of Columbia, Guam, American Samoa, the US Virgin Islands, and the Commonwealth of the Northern Mariana Islands) must obligate at least 80 percent of the funds awarded to them under SHSP and UASI to local or tribal governments within 45 calendar days of receipt of the funds (6 USC 604(d)(2)). “Obligate” has the same meaning as in federal appropriations law (i.e., there must be an action by the state to establish a firm commitment; the commitment must be unconditional on the part of the state; there must be documentary evidence of the commitment; and the award terms must be communicated to the subrecipient and, if applicable, accepted by the recipient). The Notice of Funding Opportunity (NOFO) published by FEMA, provides that states may retain more than 20% of funding for expenditures made by the state on behalf of the local unit(s) of government. This may occur only with the written consent such as a memorandum of understanding between the State and the local unit(s) of government. Separate written consent is necessary for each local unit of government in which more than 20% of the funding is retained on their behalf by the State. The written consent must specify the amount of funds to be retained and the intended use of funds, including whether any goods or services will be passed through in lieu of cash. It must also be signed by authorized representatives of the both the State and the local unit of government. Condition: At least 80% of funds awarded were not obligated to local or tribal governments within 45 calendar days of receipt and written consent was not obtained from the units of local government to allow the State to retain more than 20%. Cause: The Nevada Division of Emergency Management (DEM) did not have adequate internal controls to ensure 80% was obligated or written consent was obtained if 80% was not obligated to local or tribal governments. Effect: Local and tribal governments did not consent to the State retaining more than 20%. Questioned Costs: None Context/Sampling: Obligations are tracked and monitored by DEM in one inclusive population. We tested the aggregate population and noted DEM notated obligations of $9,592,625 of the total awarded funds of $10,097,500 (95%). However, upon review of the organizations with recorded obligations, we noted $1,997,238 was obligated to DEM or other State agencies and an additional $60,000 was originally intended to be obligated to local governments but later declined. Therefore, when the $1,997,238 and $60,000 was removed from the obligation total, only $7,535,387 had been obligated to units of local or tribal governments (74.6%). Written consent for the $2,057,238 retained by the State was not obtained. Repeat Finding from Prior Year: No Recommendation: We recommend DEM enhance internal controls to ensure 80% is obligated or written consent is obtained if 80% is not obligated to local or tribal governments. Views of Responsible Officials: The Nevada Division of Emergency Management disagrees with this finding as specified in the corrective action plan. Auditor’s Comments to Views of Responsible Officials: The Uniform Guidance requires entities to demonstrate compliance. While we appreciate all the activities that DEM performs as described in their corrective action plan, ultimately DEM was unable to provide documentation that written consent had been obtained.

2024-025: U.S. Department of Agriculture Direct and Pass-through Gretchen Swanson Center for Nutrition WIC Supplemental Nutrition Program for Women, Infants, and Children, 10.557 COVID-19 WIC Supplemental Nutrition Program for Women, Infants, and Children, 10.557 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 10.557 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Cause: The Nevada State Purchasing Department (State Purchasing) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable contract provisions. Effect: Contractors may not be aware of required terms and conditions. Questioned Costs: None Context/Sampling: A nonstatistical sample of 40 procurement transactions out of approximately 3,306 was selected for testing, including 7 contracts subject to Appendix II to Part 200. We noted the following contract provisions were missing: o Debarment and Suspension – one contract missing this provision o Termination for cause and convenience – two contracts missing this provision o Legal remedies for breach of contract – one contract missing this provision o Byrd Anti-Lobbying – five contracts missing this provision o Clean Air Act and Federal Water Pollution Control Act – four contracts missing this provision Repeat Finding from Prior Year: No Recommendation: We recommend State Purchasing enhance internal controls to ensure all contracts under federal awards contain the applicable provisions. Views of Responsible Officials: The Nevada State Purchasing Department agrees with this finding.