Audit 48157

Finding No.: 2022-004 Federal Agency: U.S. Department of the Treasury Pass-Through Entity: Government of Guam AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 American Rescue Plan 2021 Area: Activities Allowed or Unallowed Questioned Costs: $ --- Criteria: In accordance with applicable activities allowed or unallowed requirements, Fiscal Recovery Funds must be used in one of four eligible use categories. The categories applicable to the Bureau in FY 2022 include the following: a) To respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality; and b) For the provision of government services to the extent of the reduction in revenue due to the COVID?19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency. Furthermore, 2 CFR 200.400(d) requires that accounting practices of the non-Federal entity must provide for adequate documentation to support costs charged to the Federal award. Condition: For 5 (or 8%) of 60 transactions tested, aggregating $2.2 million out of $5.5 million in total Program expenditures, disbursements were made under contract number C22025-B to a provider of full-service marketing, advertising and public relations services for Guam?s 78th Liberation Festivities, including the construction of the Bureau?s parade float, broadcasting, and trophies. Such activities do not appear to satisfy the eligible use category of responding to the public health emergency or its negative economic impacts, and no revenue loss calculation is documented to demonstrate the provision of government services to the extent of the reduction in revenue due to the emergency. The total cost charged to contract number C22025 during FY 2022 is $352,815. Finding No.: 2022-004, Continued Federal Agency: U.S. Department of the Treasury Pass-Through Entity: Government of Guam AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 American Rescue Plan 2021 Area: Activities Allowed or Unallowed Questioned Costs: $ --- Cause: The Bureau did not effectively establish and implement controls over compliance with applicable activities allowed or unallowed requirements. Effect: The Bureau is in noncompliance with applicable activities allowed or unallowed requirements. No questioned cost is reported because the Bureau subsequently obtained written approval on September 20, 2023 from the pass-through entity. Recommendation: Responsible personnel should establish and implement controls over compliance with applicable activities allowed or unallowed requirements. Prior to charging costs to the Federal award, responsible personnel should read the applicable guidance from the U.S. Department of the Treasury and ascertain that the activity is an eligible use of Program funds. Furthermore, any prior approvals from the pass-through entity should be obtained in writing and maintained on file to substantiate costs charged to the Federal award. Views of responsible officials: The Bureau will implement internal controls over compliance with applicable activities allowed or unallowed. Such controls will include obtaining written approval from the pass-through entity for any project and costs charged to the Federal award.

Finding No.: 2022-004 Federal Agency: U.S. Department of the Treasury Pass-Through Entity: Government of Guam AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 American Rescue Plan 2021 Area: Activities Allowed or Unallowed Questioned Costs: $ --- Criteria: In accordance with applicable activities allowed or unallowed requirements, Fiscal Recovery Funds must be used in one of four eligible use categories. The categories applicable to the Bureau in FY 2022 include the following: a) To respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality; and b) For the provision of government services to the extent of the reduction in revenue due to the COVID?19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency. Furthermore, 2 CFR 200.400(d) requires that accounting practices of the non-Federal entity must provide for adequate documentation to support costs charged to the Federal award. Condition: For 5 (or 8%) of 60 transactions tested, aggregating $2.2 million out of $5.5 million in total Program expenditures, disbursements were made under contract number C22025-B to a provider of full-service marketing, advertising and public relations services for Guam?s 78th Liberation Festivities, including the construction of the Bureau?s parade float, broadcasting, and trophies. Such activities do not appear to satisfy the eligible use category of responding to the public health emergency or its negative economic impacts, and no revenue loss calculation is documented to demonstrate the provision of government services to the extent of the reduction in revenue due to the emergency. The total cost charged to contract number C22025 during FY 2022 is $352,815. Finding No.: 2022-004, Continued Federal Agency: U.S. Department of the Treasury Pass-Through Entity: Government of Guam AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 American Rescue Plan 2021 Area: Activities Allowed or Unallowed Questioned Costs: $ --- Cause: The Bureau did not effectively establish and implement controls over compliance with applicable activities allowed or unallowed requirements. Effect: The Bureau is in noncompliance with applicable activities allowed or unallowed requirements. No questioned cost is reported because the Bureau subsequently obtained written approval on September 20, 2023 from the pass-through entity. Recommendation: Responsible personnel should establish and implement controls over compliance with applicable activities allowed or unallowed requirements. Prior to charging costs to the Federal award, responsible personnel should read the applicable guidance from the U.S. Department of the Treasury and ascertain that the activity is an eligible use of Program funds. Furthermore, any prior approvals from the pass-through entity should be obtained in writing and maintained on file to substantiate costs charged to the Federal award. Views of responsible officials: The Bureau will implement internal controls over compliance with applicable activities allowed or unallowed. Such controls will include obtaining written approval from the pass-through entity for any project and costs charged to the Federal award.