Federal Agency: U.S. Department of Transportation Federal Program Name: Enhanced Mobility of Seniors and Individuals with Disabilities Assistance Listing Number: 20.513 Federal Award Identification Number and Year: PTD0725-01 (2023); KC001184 (2024); PTD1111 (2025) Pass-Through Agency: Washington State Department of Transportation Pass-Through Number(s): PTD0725-01; KC001184; PTD1111 Award Period: July 1, 2023 through June 30, 2027; June 1, 2024 through May 1, 2029; July 1, 2025 through June 30, 2027 Type of Finding: Material Weakness in Internal Control over Compliance – Procurement, Suspension and Debarment Other Matters – Non-Compliance with Procurement, Suspension and Debarment Criteria or specific requirement: Per OMB UG 200.320(a)(2)(i), "if simplified acquisition procedures are used [for the procurement of small purchases], price or rate quotations must be obtained from an adequate number of qualified sources." Additionally, when a recipient or subrecipient enters into a covered transaction, the recipient or subrecipient must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification must happen prior to entering into the covered transaction. Condition: During testing of procurement transactions, we noted that Sound Generations did not consistently follow its documented procurement procedures. For one procurement, Sound Generations did not obtain the required number of competitive quotes prior to vendor selection. In addition, documentation supporting vendor selection and price reasonableness was not maintained. In addition, we noted that Sound Generations did not retain the documentation showing the result of verification that the selected vendor was not suspended or debarred. Questioned costs: None. Sound Generations failed to maintain documentation supporting compliance with federal procurement requirements for one transaction. Because it was not possible to reconstruct the procurement process or determine whether compliant vendor would have offered different pricing, the audit could not quantify the amount of questioned costs resulting from noncompliance. Sound Generations did not perform and document the required suspension and debarment verification procedures prior to entering the covered transaction. During audit testing for one transaction, we verified that the vendor was not suspended or debarred; however, the auditor was unable to determine the vendor's status as of the contract execution date. Accordingly, while a compliance exception exists, no questioned costs were identified. Context: A procured vendor was selected based on a prior relationship with the vendor; however, documentation was not maintained to reflect the decision for said vendor's selection. It was acknowledged that there are other qualified vendors available that should be considered for documenting vendor pricing and fair and reasonable selection moving forward. For a separate procurement for a covered transaction, the organization was unable to provide documentation demonstrating that it verified the vendor was not debarred or suspended prior to contract execution. Cause: This was overlooked by the Director of Transportation and Controller, who were responsible for reviewing to ensure procurement and suspension and debarment procedures are in place and appropriately followed. Effect: Federal funding may be used for procurements that are not the most advantageous for the Federal program, or covered transactions could be entered into with entities that are federally suspended or debarred. Repeat Finding: No. Recommendation: Management at Sound Generations should review its existing control structure and ensure that there are adequate processes and controls to ensure the correct procurement methods are used and that documentation of quotes, bids, vendor evaluations, and price analysis is appropriately maintained. We also recommend Sound Generations follow its policies and procedures and ensure suspension and debarment checks are performed on a timely basis for all covered transactions. Views of responsible officials and planned corrective actions: Please see the attached Management’s Corrective Action Plan.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Special Programs for the Aging, Title III, Part C, Nutrition Services; Nutrition Services Incentive Program Assistance Listing Number: 93.045; 93.053 Federal Award Identification Number and Year: DA24-00030 (2024) Pass-Through Agency: City of Seattle Human Services Department Pass-Through Number(s): DA24-00030-A2 Award Period: January 1, 2024 through December 31, 2027 Type of Finding: Significant Deficiency in Internal Control over Compliance – Program Income Other Matters – Non-Compliance with Program Income Compliance Requirements Criteria or specific requirement: Per the OMB UG 2025 Compliance Supplement "program income is gross income earned by a non-federal entity that is directly generated by a supported activity or earned as a result of the federal award during the period of performance." Per 2 CFR 200.303(a), recipients of federal funding must establish, document, and maintain effective internal control over federal awards that provides reasonable assurance that federal awards are managed in compliance with applicable statutes, regulations, and the terms and conditions of the award. Program income should be accurately recorded and reported based on the underlying supporting documentation. Condition: During testing of program income, we identified one instance in which program income was not recorded in accordance with the underlying supporting documentation. Program income earned of $4.00 was recorded as $0.04 in the accounting records. Questioned costs: Questioned costs do not exceed the reportable threshold. Context: A sample of program income for the Lake Community Center Transit 35 Community Dining Project was recorded as $0.04. Testing of supporting documentation determined that actual program income earned totaled $4.00; however, due to a data-entry error, the amount was incorrectly recorded as $0.04. Although management performed review procedures over program income, the error was not identified prior to recording. Cause: The exception resulted from a manual data-entry error that was not identified through the review process prior to recording. Effect: Program income was not recorded in accordance with the underlying supporting documentation. The exception resulted in an understatement of program income of $3.96. While the amount of the exception was not material to the federal program and did not result in material noncompliance, the error was not identified through management's review procedures. Repeat Finding: No. Recommendation: Management should review its existing control structure and ensure that there are adequate processes and controls to ensure program income is recorded accurately for federal programs based on the underlying supporting documentation. Management should also continue to reinforce review procedures over program income reporting to help ensure recording errors are detected and corrected on a timely basis. Views of responsible officials and planned corrective actions: Please see the attached Management’s Corrective Action Plan.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Special Programs for the Aging, Title III, Part C, Nutrition Services; Nutrition Services Incentive Program Assistance Listing Number: 93.045; 93.053 Federal Award Identification Number and Year: DA24-00030 (2024 Pass-Through Agency: City of Seattle Human Services Department Pass-Through Number(s): DA24-00030-A2 Award Period: January 1, 2024 through December 31, 2027 Type of Finding: Significant Deficiency in Internal Control over Compliance – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Other Matters – Non-Compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles Compliance Requirements Criteria or specific requirement: Per the OMB UG 200.430(g)(1), "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (i) be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated." Condition: One selected payroll expense was recorded with an incorrect proportion of employee time coded to the Federal program code. Questioned costs: Questioned costs do not exceed the reportable threshold. Context: For payroll, an incorrect allocation percentage was used. The Senior Accountant tasked with payroll explained that when she calculated the December allocation between two employees, the combined gross pay amount was used as the basis for the percentage calculation instead of using the individual gross pay amounts. Cause: The payroll exception resulted from an error in calculating the allocation percentages and was not identified through the review process. Effect: Payroll was not recorded with the correct allocation amount with support underlying documentation. Repeat Finding: No. Recommendation: Management at Sound Generations should review its existing control structure and ensure that there are adequate processes and controls to ensure payroll is allocated correctly for Federal programs, in accordance with the underlying supporting documentation, and that only allowable costs are included in the allocation pool. Views of responsible officials and planned corrective actions: Please see the attached Management’s Corrective Action Plan.
Federal Agency: U.S Department of Transportation Federal Program Name: Enhanced Mobility of Seniors and Individuals with Disabilities Assistance Listing Number: 20.513 Federal Award Identification Number and Year: PTD0725-01 (2023); KC001184 (2024); PTD1111 (2025) Pass-Through Agency: Washington State Department of Transportation Pass-Through Number(s): PTD0725-01; KC001184; PTD1111 Award Period: July 1, 2023 through June 30, 2027; June 1, 2024 through May 1, 2029; July 1, 2025 through June 30, 2027 Type of Finding: Significant Deficiency in Internal Control over Compliance – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Other Matters – Non-Compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles Compliance Requirements Criteria or specific requirement: Per the OMB UG 200.403(a) requires costs charging to a Federal program "be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles." Condition: Two selected general disbursements were for costs allocated to the program that were not necessary and reasonable to the Federal program, and therefore unallowable costs. Questioned costs: Questioned costs do not exceed the reportable threshold. Context: For the general expenditure, costs associated with general ledger account 76000, employee recognition, were incorrectly included in the allocation pool. Cause: The general expenditure exceptions resulted from the employee recognition expense account being included in the allocation pool. Effect: General expenditures were charged to the program that are unallowable. The organization may be required to correct the amount by reallocation and may need to reimburse the Federal program for unallowable costs. Repeat Finding: No. Recommendation: Management should review and strengthen its controls over the allocation of expenditures to federal programs to ensure costs charged to federal awards are allowable, properly supported, and allocated in accordance with applicable federal requirements. Management should also ensure that only allowable costs are included in the allocation methodology used to distribute indirect or shared expenditures. Views of responsible officials and planned corrective actions: Please see the attached Management’s Corrective Action Plan.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Special Programs for the Aging, Title III, Part C, Nutrition Services; Nutrition Services Incentive Program Assistance Listing Number: 93.045; 93.053 Federal Award Identification Number and Year: DA24-00030 (2024) Pass-Through Agency: City of Seattle Human Services Department Pass-Through Number(s): DA24-00030-A2 Award Period: January 1, 2024 through December 31, 2027 Type of Finding: Significant Deficiency in Internal Control over Compliance – Activities Allowed or Unallowed Criteria or specific requirement: Per OMB UG 2 CFR §200.303(a) requires the non-Federal to establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Four of twenty-four Community Dining participants tested lacked sufficient evidence of staff review over the participant's eligible participation in the program services. No other deficiencies were identified in the remaining population of forty participants tested across the Meals on Wheels, Transportation, and Community Dining programs. Questioned costs: None identified. Identification of how questioned costs were computed: N/A If questioned costs are not determinable, description of why know questioned costs were undermined or otherwise could not be reported: Audit procedures did not identify any instances in which services were provided to ineligible participants. Accordingly, no questioned costs were identified. The finding relates to a deficiency in internal control over compliance rather than a known instance of noncompliance. Context: Testing was conducted to determine whether participants receiving services met program requirements and whether participant records contained sufficient evidence of review and support. A total of forty participants were selected for testing across the Meals on Wheels, Transportation, and Community Dining programs. Although all participants were deemed eligible to receive services, and therefore represent allowable activities under the programs, Four of twenty-four Community Dining participants tested lacked sufficient evidence of staff review over the participant's eligible participation in the program services. There were no other deficiencies noted across the total of forty samples tested. Cause: Management did not consistently perform or document its review of Community Dining participant records and participant tracking information. Effect: A lack of controls could result in services provided to ineligible participants, which would result in unallowable activities to the program. Fictitious individuals could be added to the program's client count that could result in an excess of program funding requested that does not reflect true participants served. Repeat Finding: No. Recommendation: Management should strengthen controls over Community Dining participant tracking to ensure participant records are reviewed and supported by appropriate documentation. Management should also implement monitoring procedures to verify that participant counts and listings are complete, accurate, and properly supported. Views of responsible officials and planned corrective actions: Please see the attached Management’s Corrective Action Plan.