Audit 46572

Criteria - Training should be provided to rural, unincorporated small municipal systems, tribal systems, and incorporated municipal systems with a population under 10,000. Some exceptions may be granted. Grant requires a minimum of 30 contacts reported per month. Condition - There were a total of 187 systems that were reported as receiving a contact during the year 2022. We tested a sample of 63 and found that 3 of those did not meet the stated eligibility criteria or include documentation supporting an applicable exception to the criteria. There were 10 contacts reported from the ineligible systems which represents a projected error rate of 5%. Cause - System visits are typically driven by system requests. Staff are trained to only claim contacts for systems eligible to receive USDA-RD loan and grant funds. For ineligible systems, staff are trained to claim the visit as outreach which is not included in minimum deliverables for the contract. Typically, the eligibility metric is any system with a population under 10,000. Some systems may be eligible based on granted exception; however, the Association does not maintain documentation or support of such exceptions. Effect - Our testing identified 10 contacts that do not appear to be eligible based on the available documentation. Based on correspondence with NRWA, the Association was able to surpass the minimum requirements during the year. However, failure to properly determine system eligibility could result in inability to meet future contract requirements which could impact future funding. Recommendation - We recommend Association staff carefully review all systems for proper eligibility prior to claiming an eligible contact for a visit. If a system is in question, documentation of the reason for eligibility should be maintained. Response - Management maintains that the systems deemed ineligible by the tests performed may have a legitimate reason for eligibility. The Association has brought ineligibility issues to the attention of NRWA. The Association plans to discuss and review the current list of systems for future eligibility determinations. Management has also implemented a more rigorous weekly review of every contact claimed by field staff to find and verify or omit any questionable contacts prior to the end of each month ensuring that deliverables are consistently met and reducing error to the greatest extent possible.

Criteria - Training should be provided to rural, unincorporated small municipal systems, tribal systems, and incorporated municipal systems with a population under 10,000. Some exceptions may be granted. Grant requires a minimum of 30 contacts reported per month. Condition - There were a total of 187 systems that were reported as receiving a contact during the year 2022. We tested a sample of 63 and found that 3 of those did not meet the stated eligibility criteria or include documentation supporting an applicable exception to the criteria. There were 10 contacts reported from the ineligible systems which represents a projected error rate of 5%. Cause - System visits are typically driven by system requests. Staff are trained to only claim contacts for systems eligible to receive USDA-RD loan and grant funds. For ineligible systems, staff are trained to claim the visit as outreach which is not included in minimum deliverables for the contract. Typically, the eligibility metric is any system with a population under 10,000. Some systems may be eligible based on granted exception; however, the Association does not maintain documentation or support of such exceptions. Effect - Our testing identified 10 contacts that do not appear to be eligible based on the available documentation. Based on correspondence with NRWA, the Association was able to surpass the minimum requirements during the year. However, failure to properly determine system eligibility could result in inability to meet future contract requirements which could impact future funding. Recommendation - We recommend Association staff carefully review all systems for proper eligibility prior to claiming an eligible contact for a visit. If a system is in question, documentation of the reason for eligibility should be maintained. Response - Management maintains that the systems deemed ineligible by the tests performed may have a legitimate reason for eligibility. The Association has brought ineligibility issues to the attention of NRWA. The Association plans to discuss and review the current list of systems for future eligibility determinations. Management has also implemented a more rigorous weekly review of every contact claimed by field staff to find and verify or omit any questionable contacts prior to the end of each month ensuring that deliverables are consistently met and reducing error to the greatest extent possible.