2023-002 - Late Submission of Single Audit Reporting Package and Data Collection Form Finding Type: Noncompliance. Criteria: The Uniform Guidance (2 CFR 200.512(a)(1)) requires the audit reporting package and data collection form to be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s reports or nine months after the end of the audit period. For the fiscal year ended December 31, 2023, the required submission deadline was September 30, 2024. Condition/Finding: Subsequent to the original issuance of the Organization’s financial statements, additional expenditures of federal awards applicable to the year ended December 31, 2023, were identified. These additional expenditures caused the Organization’s total federal awards expended to exceed the applicable threshold requiring a Single Audit. Consequently, the Organization’s Single Audit reporting package and data collection form were submitted to the Federal Audit Clearinghouse after the required deadline. Cause: After the original financial statements were issued, the grantor provided clarification regarding the period in which certain federally funded expenditures should be recognized. Based on that clarification, the Organization determined that additional federal expenditures were reportable for the year ended December 31, 2023. Because the need for a Single Audit was not identified until after the original submission deadline had passed, the required reporting package and data collection form could not be submitted within the prescribed timeframe. Effect: As a result, the Organization did not comply with the Single Audit reporting requirements of the Uniform Guidance. The late submission also delayed the availability of the required audit information to federal awarding agencies and other users of the Federal Audit Clearinghouse. Recommendation: We recommend that management strengthen its procedures for monitoring federal award activity, including promptly identifying and resolving questions with grantors regarding the timing and reporting of federal expenditures. Before issuing the financial statements, management should document its conclusions regarding the federal expenditures attributable to the reporting period and evaluate whether the total expenditures require a Single Audit. View of Responsible Officials (Corrective Action): See corrective action plan
2023-003 - Inadequate Controls Over Federal Procurement and Suspension and Debarment Finding Type: Material weakness in internal control over compliance. Federal Award: 21.027 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Criteria: The Uniform Guidance requires non-Federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the awards are administered in compliance with applicable federal statutes, regulations, and award terms and conditions. The federal procurement standards require non-Federal entities to maintain documented procurement procedures and records sufficient to support the history of each procurement, including the procurement method used, contractor selection or rejection, and the basis for the contract price. The standards also require written conflict-of-interest provisions, appropriate oversight of contractor performance, and inclusion of applicable federal provisions in contracts. Additionally, suspension and debarment requirements prohibit covered transactions with parties that are debarred, suspended, or otherwise excluded from participation in federal programs. Eligibility must be verified through the System for Award Management, a contractor certification, or an appropriate clause or condition in the covered transaction. Condition/Finding: During the audit, we noted that the Organization had not established and implemented sufficient controls over procurements charged to the federal program. Specifically, the Organization could not provide sufficient documentation demonstrating that: • The rationale for the procurement method and contractor selection was documented; • Potential conflicts of interest were evaluated; • Applicable contractors were verified as not suspended, debarred, or otherwise excluded; • Required federal provisions were included in applicable contracts; and • Contractor performance and compliance with contract terms were appropriately monitored. Cause: The Organization’s existing purchasing policies and procedures did not incorporate the federal-specific requirements applicable to procurements charged to federal awards. As a result, the Organization had not established a standardized process to identify, perform, document, and retain evidence of the required federal procurement and suspension and debarment procedures. Effect: The absence of appropriately designed and implemented controls creates a reasonable possibility that material noncompliance with federal procurement and suspension and debarment requirements could occur and not be prevented, or detected and corrected, on a timely basis. This could result in unsupported procurement decisions, transactions with ineligible contractors, contracts that omit required federal provisions, or inadequate oversight of contractor performance. Recommendation: We recommend that management adopt written federal procurement procedures and implement a standardized review process for procurements charged to federal awards. The process should address and document the procurement method and contractor selection, potential conflicts of interest, contractor eligibility, required federal contract provisions, and oversight of contractor performance. Documentation should be retained with each procurement file and be subject to appropriate management review and approval. View of Responsible Officials (Corrective Action): See corrective action plan.
2023-004 - Inadequate Controls Over Federal Grant Reporting and Record Retention Finding Type: Material weakness in internal control over compliance. Federal Award: 21.027 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Criteria: The Uniform Guidance (2 CFR 200.302) requires a non-Federal entity’s financial management system and supporting records to be sufficient to permit the preparation of required federal reports, provide accurate, current, and complete financial information, and trace federal funds to a level sufficient to demonstrate compliance with applicable requirements. Additionally, 2 CFR 200.303 requires non-Federal entities to establish and maintain effective internal control over federal awards. The applicable SLFRF Award Terms and Conditions require recipients to comply with Treasury’s reporting requirements and maintain financial records and supporting documentation sufficient to demonstrate compliance. Such records are required to be retained for five years after all award funds have been expended or returned to Treasury, whichever is later. Treasury’s reporting guidance also requires recipients to submit applicable project, expenditure, capital expenditure, contractor, subaward, and other programmatic information. Condition/Finding: During the audit, we noted that the Organization had not established and implemented sufficient controls over the preparation, review, submission, and retention of required SLFRF reports. Specifically, the Organization could not provide sufficient documentation demonstrating that: • Financial and programmatic information included in required reports was reconciled to the underlying accounting and project records; • All applicable reporting elements, including capital expenditures and contractor or subaward information, were evaluated for completeness; • Reports were reviewed and approved by appropriate personnel before certification and submission; • Reports were submitted by the applicable deadlines and evidence of submission was retained; and • Corrections or resubmissions were appropriately documented and supported. Additionally, records necessary to substantiate reported financial and programmatic information were not consistently maintained and retained. Cause: The Organization had not established written policies or a standardized reporting process identifying the responsibilities, documentation, review, submission, and record-retention requirements applicable to federal grant reporting. Consequently, the required reporting controls were not consistently performed and documented. Effect: The absence of appropriately designed and implemented controls creates a reasonable possibility that materially inaccurate, incomplete, or untimely federal reports could be submitted and not be prevented, or detected and corrected, on a timely basis. Inadequate supporting records may also prevent the Organization from substantiating reported information and demonstrating compliance during an audit, monitoring review, or other grantor examination. Recommendation: We recommend that management establish written federal grant reporting and record-retention procedures and implement a standardized reporting calendar and checklist. The procedures should assign responsibility for preparing, reconciling, reviewing, approving, and submitting each required report. Management should retain the underlying accounting and programmatic records, documented reconciliations and approvals, submission confirmations, and support for any corrections or resubmissions for the required retention period. View of Responsible Officials (Corrective Action): See corrective action plan