Audit 411922

Finding No: 2025-001 Reporting: U.S. Department of Treasury U.S. Department of Justice Assistance Listing Number: 21.027 16.753 Programs: COVID-19 Coronavirus State and Local Fiscal Recovery Funds/City of Atlanta Diversion Center OJP - Congressionally Recommended Awards/City of Atlanta Diversion Center Award Years: October 1, 2022 – December 31, 2027 (a) Criteria or Requirement Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award 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. Additionally, the specific requirements for activities allowed or unallowed are unique to each federal program and are found in the federal statutes, regulations, and the terms and conditions of the federal award pertaining to the program. (b) Condition Found, Including Perspective Of the 12 reimbursement requests tested during the fiscal year 2025 reporting period for the City of Atlanta Diversion Center, there was one reimbursement request that included $300 in which the request was approved for reimbursement and reimbursed by the federal agency, however, the expenditure was not substantiated by documentation and therefore was not allowable. (c) Possible Cause While the System performs a review of documentation before payments are requested for reimbursement, controls were not designed or implemented effectively to ensure that unallowable charges were not submitted for reimbursement by the federal agency. (d) Questioned Cost No questioned costs as amounts did not exceed the threshold for reporting. (e) Effect Federal funds were expended for unallowable amounts and evidence of the effective operation of management review controls was not consistently maintained in accordance with Federal requirements. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year This finding is not a repeat finding. (h) Recommendation We recommend that the System strengthen controls over the management review process to prevent unallowable costs from being charged to Federal programs. (i) View of Responsible Officials Management concurs with the finding. While appropriate controls exist relative to management review of expenditures, opportunities exist to retrain staff and further enhance controls related to procedures for submission, review, and approval of expenditures before submission for reimbursement.

U.S. Department of Treasury U.S. Department of Justice Assistance Listing Number: 21.027 16.753 Programs: COVID-19 Coronavirus State and Local Fiscal Recovery Funds/City of Atlanta Diversion Center OJP - Congressionally Recommended Awards/City of Atlanta Diversion Center Award Years: October 1, 2022 – December 31, 2027 (j) Criteria or Requirement Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award 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. Additionally, there are specific requirements for suspension and debarment for each federal program and are found in the federal statutes, regulations, and the terms and conditions of the federal award pertaining to the program. (k) Condition Found, Including Perspective Formal documentation was not maintained to evidence management’s follow up regarding potential suspension and debarment matches and vendor/supplier registration exemption request forms. (l) Possible Cause While the System performs a suspension and debarment review prior to vendor contracts being entered into and payments being made, controls were not implemented effectively to ensure that documentation was maintained to evidence management’s procedures over ensuring the vendor was not suspended or debarred. (m) Questioned Cost No questioned costs as amounts were noted. (n) Effect Federal funds were expended with vendors whom management did not maintain formal documentation to substantiate that the vendors were not subject to suspension or debarment in accordance with Federal requirements. (o) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (p) Repeat Finding in the Prior Year This finding is not a repeat finding. (q) Recommendation We recommend that the System strengthen controls over maintaining documentation regarding the suspension and debarment validation performed over vendors. (r) View of Responsible Officials Management concurs with the finding. Appropriate controls are in place relative to suspension and debarment policies and procedures. Opportunities exist to further enhance controls related to documenting and maintaining formal documentation related to potential matches and exemption request forms