Finding 2022-005 Late Reporting and Noncompliance with Reporting Requirements Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of the Treasury, respectively Federal Programs: Tribal Self-Governance and Determination Cluster (TSGDC) and Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), respectively ALN Numbers: 93.441 (TSGDC) and 21.027 (CSLFRF), respectively Award Number: 0243-12-0006 (TSGDC) and SLFRP2520/4754 (CSLFRF), respectively Award Year: 2020, 2021, 2022 (TSGDC) and 2021 (CSLFRF), respectively Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Uniform Guidance requires that the reporting package be submitted within the earlier of 9 months after year end or 30 days after the report issuance in accordance with the provisions of 2 CFR part 200, subpart F, section 200.512. Condition and Context: The Community did not adhere to the Uniform Guidance requirement of submitting the reporting package within the earlier of 30 days after the receipt of the audit report, or the nine months after the end of the audit period. Cause: Lack of internal controls around Uniform Guidance requirements. Effect: The Community was not in compliance with reporting requirements. Questioned costs: None. Repeat finding: This is a repeat of Finding 2021-005; therefore, we believe this to be a systemic issue. Recommendation: We recommend that management comply with Uniform Guidance reporting requirements. Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2022-006 Lack of Internal Control Over Cash Management Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of the Treasury, respectively Federal Programs: Tribal Self-Governance and Determination Cluster (TSGDC) and Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), respectively CFDA Numbers: 93.441 (TSGDC) and 21.027 (CSLFRF), respectively Award Number: 0243-12-0006 (TSGDC) and SLFRP2520/4754 (CSLFRF), respectively Award Year: 2020, 2021, 2022 (TSGDC) and 2021 (CSLFRF), respectively Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: The requirement for cash management, as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs. Condition and Context: Procedures related to cash management were inadequate to ensure that funds drawn down were not used for other grant expenditures. The Community’s cash balances at December 31, 2022 were $4,263,944 and total unearned revenue was $5,913,174, leading to a cash shortfall of $1,649,230. This resulted from the temporary borrowing of federal funds to pay expenses in the General Fund and other federal award programs. Unearned revenues as of December 31, 2022 were $3,252,269 and $1,670,568 related to the Coronavirus State and Local Fiscal Recovery Funds program and Tribal Self-Governance and Determination Cluster program, respectively. Cause: Lack of internal controls over cash management. Effect: The Community was not in compliance with 2 CFR 200.305 related to cash management requirements. Cash restricted for the programs was used to fund other programs of the Community. Questioned costs: $1,649,230, which is the shortfall between cash balances and unearned revenue balances. Repeat finding: This is a repeat of Finding 2021-006; therefore, we believe this to be a systemic issue. Recommendation: We recommend the Community monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs in an effort to ensure that unearned revenue balances do not exceed total cash. Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2022-007 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of the Treasury, respectively Federal Programs: Tribal Self-Governance and Determination Cluster (TSGDC) and Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), respectively CFDA Numbers: 93.441 (TSGDC) and 21.027 (CSLFRF), respectively Award Number: 0243-12-0006 (TSGDC) and SLFRP2520/4754 (CSLFRF), respectively Award Year: 2020, 2021, 2022 (TSGDC) and 2021 (CSLFRF), respectively Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Per OMB 200.403(a) costs should be necessary and reasonable for the performance of the federal award. Condition and Context: The Community could not provide adequate supporting documentation for costs charged to the programs. During our review of non-payroll costs charged to the TSGDC program, the Community could not provide supporting documentation (invoice, check request, or management approval) for 6 of the 14 non-payroll transactions charged to the program. During our review of non-payroll costs charged to the CSLFRF program, the Community could not provide supporting documentation (invoice, check request, or management approval) for 3 of the 26 non-payroll transactions charged to the program. Cause: Lack of internal controls over supporting documentation and approval over expenditures charged to the programs. Effect: Lack of internal control over cash disbursements pose the risk that the Community will expend federal funds for non-grant purposes. Questioned costs: Actual and likely questioned costs are below the reporting threshold of $25,000. Repeat finding: This is a repeat of Finding 2021-007; therefore, we believe this to be a systemic issue. Recommendation: We recommend that management implement policies and procedures to ensure that only allowable costs are charged to the program and that supporting documentation be kept for all transactions. Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2022-008 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of the Treasury, respectively Federal Programs: Tribal Self-Governance and Determination Cluster (TSGDC) and Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), respectively CFDA Numbers: 93.441 (TSGDC) and 21.027 (CSLFRF), respectively Award Number: 0243-12-0006 (TSGDC) and SLFRP2520/4754 (CSLFRF), respectively Award Year: 2020, 2021, 2022 (TSGDC) and 2021 (CSLFRF), respectively Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file. Condition and Context: During our testing of payroll transactions charged to the TSGDC program, the Community did not provide documentation of approved pay rates for 14 of the 25 paychecks reviewed. Additionally, the Community did not provide timesheets for 3 of the 25 paychecks reviewed. During our testing of payroll transactions charged to the CSLFRF program, the Community did not provide documentation of approved pay rates for all 5 of the paychecks reviewed. Cause: Lack of internal controls over payroll transactions. Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes or charge inaccurate payroll expenditures to the respective program. Questioned costs: Actual and likely questioned costs are estimated to be below the reporting threshold of $25,000. Repeat finding: This is a repeat of Finding 2021-008; therefore, we believe this to be a systemic issue. Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated. Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2022-009 Lack of Internal Controls and Noncompliance with Procurement Requirements Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of the Treasury, respectively Federal Programs: Tribal Self-Governance and Determination Cluster (TSGDC) and Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), respectively CFDA Numbers: 93.441 (TSGDC) and 21.027 (CSLFRF), respectively Award Number: 0243-12-0006 (TSGDC) and SLFRP2520/4754 (CSLFRF), respectively Award Year: 2020, 2021, 2022 (TSGDC) and 2021 (CSLFRF), respectively Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: In accordance with 2 CFR sections 200.318 to 200.325, procurement policies must be in place to ensure the Tribe is promoting full and open competition consistent with the standards of these sections. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Condition and Context: During our testing of allowable costs charged to the TSGDC program, management could not provide adequate procurement documentation related to the clinic construction project. During our testing of allowable costs charged to the CSLFRF program, management could not provide adequate procurement documentation related to a construction project and supplies related to the water treatment system. Cause: Lack of internal controls over procurement requirements. Effect: Failure to follow compliance requirements could result in loss of federal funding or questioned costs being incurred. Questioned costs: Undetermined. Due to the lack of procurement documentation, we were unable to determine if the Community received the lowest price possible. Repeat finding: No. Recommendation: We recommend that management establish a procurement policy and ensure that the policy is followed. Management Response: Management agrees with this finding, see Corrective Action Plan.