Audit 46090

FY End

2022-09-30

Total Expended

$11.87M

Findings

2

Programs

5

Organization: Blue Water Area Transportation Commission (MI)

Year: 2022 Accepted: 2023-06-27

Auditor: Uhy LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
44164	2022-001	Significant Deficiency	-	H
620606	2022-001	Significant Deficiency	-	H

ALN	Program	Spent	Major	Findings
20.509	Formula Grants for Rural Areas and Tribal Transit Program	$1.21M	Yes	0
20.530	Public Transportation Innovation	$84,000	-	0
20.505	Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research	$40,000	-	0
20.507	Federal Transit_formula Grants	$33,494	Yes	1
20.526	Buses and Bus Facilities Formula, Competitive, and Low Or No Emissions Programs	$7,307	Yes	0

Contacts

Name	Title	Type
NLBRRE8N6MK8	Jeff Hirschmann	Auditee
8109664200	Paul Bailey	Auditor
No contacts on file

Notes to SEFA

Title: Reconciliation to the Schedule of Expenditures of Federal Awards Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Blue Water Area Transportation Commission (the Commission) for the year ended September 30, 2022. Expenditures reported on the Schedule are reported on the same basis of accounting, the accrual basis, as the financial statements, although the basis for determining when federal awards are expended is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenses are not allowed or are limited as to reimbursement. Therefore, some amounts presented in this Schedule may differ from amounts presented in, or used in the preparation of, the financial statements.The Commission passes a certain amount of these federal awards to other local governments and agencies (subrecipients) who provide the actual program services. These federal awards passed through to subrecipients are recognized as expenses by the Commission in the period the program services are provided.For purposes of charging indirect costs to federal awards, the Commission has elected not to use the 10 percent de minimis cost rate as permitted by ?200.414 of the Uniform Guidance.Revenue has been accrued at September 30, 2022 to match allowable expenditures incurred during the year for each program. Grant funds received in advance that are in excess of incurred costs have been reflected as deferred revenue. Because the Schedule presents only a selected portion of the operations of the Commission, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Commission. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The following reconciles the grant revenue reported in the September 30, 2022 financial statements to the federal award expenditures reported in the Schedule. See Note 2 to SEFA for chart/table. The Schedule lists the following award that was requested prior to the start of the period of performance: Assistance Listing #20.507, U.S. Department of Transportation, Federal Transit Formula Grants - COVID-19 - Section 5307 - FY 2021 CRRSA Act, MI-2022-010-00, in the amount of $33,494. See schedule of findings and questioned costs for more information. Subsequently, the Commission contacted the grantor, which instructed management to repay the aforementioned amount and instead request the funds utilizing the following award: Assistance Listing #20.507, U.S. Department of Transportation, Federal Transit Formula Grants - COVID-19 - Section 5307 - FY 2021 ARP Act. Correspondingly, in the financial statements, the aforementioned amount has been reported under this award.

Finding Details

Finding 2022-001

Section III - Federal Award Findings and Questioned Costs: 2022 -001: Period of performance Type: Significant deficiency in internal control over compliance, immaterial non-compliance Assistance Listing Number, Federal Agency, Program Name, Program Title, Pass-through Grantor, and Pass-through Name and Grant Number: - Assistance listing #20.507, U.S. Department of Transportation, Section 5307 - CRRSA Act FY 2021, MI-2022-010-00 Criteria: The federal award specified that the award could be used for up to 100% of operating expenses for the period from the effective date of this award through September 30, 2023. Where a funding period is specified, a non-federal entity may charge to the award only costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the awarding agency. Condition: During our audit, we noted that expenses were charged to the award prior to the effective date of the award. Cause: The Commission received another similar operating grant from the same pass-through agency at the same time, which allowed expenses to be charged to the award starting on January 20, 2020, which management inadvertently considered as the start date for the grant. Context: $33,494 was requested prior to the effective date of the award. Questioned Costs: $33,494 Effect: Expenses were charged to the award prior to the effective date of the award. Recommendation: A second person should review the grant agreements and requests for funding to make sure the Commission is in compliance with the period of performance and other grant awards.

Finding 2022-001

Section III - Federal Award Findings and Questioned Costs: 2022 -001: Period of performance Type: Significant deficiency in internal control over compliance, immaterial non-compliance Assistance Listing Number, Federal Agency, Program Name, Program Title, Pass-through Grantor, and Pass-through Name and Grant Number: - Assistance listing #20.507, U.S. Department of Transportation, Section 5307 - CRRSA Act FY 2021, MI-2022-010-00 Criteria: The federal award specified that the award could be used for up to 100% of operating expenses for the period from the effective date of this award through September 30, 2023. Where a funding period is specified, a non-federal entity may charge to the award only costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the awarding agency. Condition: During our audit, we noted that expenses were charged to the award prior to the effective date of the award. Cause: The Commission received another similar operating grant from the same pass-through agency at the same time, which allowed expenses to be charged to the award starting on January 20, 2020, which management inadvertently considered as the start date for the grant. Context: $33,494 was requested prior to the effective date of the award. Questioned Costs: $33,494 Effect: Expenses were charged to the award prior to the effective date of the award. Recommendation: A second person should review the grant agreements and requests for funding to make sure the Commission is in compliance with the period of performance and other grant awards.