FAC Explorer

Audit 8892

FY End
2023-06-30
Total Expended
$971,746
Findings
8
Programs
3
Organization: Rural Development Institute Dba Landesa (WA)
Year: 2023 Accepted: 2023-12-29
Auditor: Clark Nuber P S

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
6903 2023-002 Significant Deficiency - A
6904 2023-003 Material Weakness - I
6905 2023-004 Material Weakness - C
6906 2023-005 Material Weakness - M
583345 2023-002 Significant Deficiency - A
583346 2023-003 Material Weakness - I
583347 2023-004 Material Weakness - C
583348 2023-005 Material Weakness - M

Programs

ALN Program Spent Major Findings
19.801 Office of Global Women's Issues $618,368 Yes 4
19.108 Bureau of South and Central Asian Affairs $245,238 - 0
98.001 Usaid Foreign Assistance for Programs Overseas $108,140 - 0

Contacts

Name Title Type
VC4NVUSFD8K4 Jonathan Smith Auditee
2062576123 Sarah Wine Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presentation Accounting Policies: Note 2 - Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has elected to use the 10-percent de minims indirect cost rate as allowed under the Uniform Guidance through December 31, 2022. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Landesa and Subsidiaries (collectively, the Organization) under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.
Title: Note 2 - Summary of Significant Accounting Policies Accounting Policies: Note 2 - Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has elected to use the 10-percent de minims indirect cost rate as allowed under the Uniform Guidance through December 31, 2022. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenses incurred under federal programs are subject to audit by the awarding agencies. If, as a result of such an audit, certain expenses incurred are determined to be nonreimbursable, the Organization may be liable for repayment of disallowed expenses previously claimed or received.
Title: Note 3 - Indirect Cost Rate Accounting Policies: Note 2 - Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has elected to use the 10-percent de minims indirect cost rate as allowed under the Uniform Guidance through December 31, 2022. The Organization has elected to use the 10-percent de minims indirect cost rate as allowed under the Uniform Guidance through December 31, 2022.

Finding Details

Finding 2023-002
Finding 2023-002 Significant deficiency in internal control over compliance for allowable costs related to timesheet approvals. Federal Agency: United States Department of State Program Titles: Office of Global Women’s Issues Assistance Listing Number: 19.801 Pass-Through Entity: N/A Award Numbers: SLMAQM21CA3275 Award Periods: September 30, 2021 through September 30, 2025 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart E ‐ Cost Principles, Section 200.400, policy guide, require that a non‐Federal entity ensure that charges to federal awards for salaries and wages be based on records that accurately reflect the work performed and must include among other things: be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; be incorporated into the official records of the non-federal entity and reasonably reflect the total activity for which the employee is compensated, not exceeding 100% of compensated activities. Condition/Context The Organization’s internal controls require review and approval of costs charged to the Federal awards by a knowledgeable and authorized individual to ensure that costs are accurately charged. During our direct and indirect payroll testing, we noted multiple cases in which the hours charged to grants were not appropriately approved by the authorized personnel. This was noted in 20 of the total 71 payroll transactions tested. Additionally, 4 out of the total 31 indirect payroll costs tested were missing evidence of pay rate authorizations or approvals. Cause The Organization’s internal controls failed to prevent, or detect and timely correct, these payroll errors from occurring. Effect Payroll charges to the federal awards could result in questioned costs as errors would not have been identified by the employee's supervisor. Questioned Costs Not determinable. Repeat Finding No. Recommendation We recommend the Organization implement measures to ensure that all employee timesheets are reviewed and approved by authorized personnel. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2023-003
Finding 2023-003 Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department of State Program Titles: Office of Global Women’s Issues Assistance Listing Number: 19.801 Pass-Through Entity: N/A Award Numbers: SLMAQM21CA3275 Award Periods: September 30, 2021 through September 30, 2025 Criteria Internal controls requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance) , Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.326 Internal Controls, require that a non‐Federal entity use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirement identified in 2 CFR Part 200. A nonfederal entity among others must: - Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). - For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). Condition/Context Although the Organization has a procurement policy, and the procedures include the use of a micro purchase threshold of $3,500, small purchases and simplified acquisition thresholds are not clearly identified. As such, the policy does not fully incorporate the procurement standards of the Uniform Guidance including sealed bids, cost or price analysis etc. Cause The Organization's management was not aware that all components including procurement methods of 2 CFR section 200.320 are required to be included in the Organization's procurement policy even if the Organization's procurements would not typically include all procurement methods. Effect The Organization did not ensure that its procurement policy follows the procurement standards set out at 2 CFR Part 200. Questioned Costs Not determinable. Repeat Finding No. Recommendation We recommend the Organization implement measures to ensure that its procurement policy reflect applicable state and local laws and regulations and conform to applicable federal statutes and requirements in 2 CFR Part 200. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2023-004
Finding 2023-004 Material weakness in internal control over compliance for cash management related to cash advances Federal Agency: United States Department of State Program Titles: Office of Global Women’s Issues Assistance Listing Number: 19.801 Pass-Through Entity: N/A Award Numbers: SLMAQM21CA3275 Award Periods: September 30, 2021 through September 30, 2025 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.305(b), Internal Controls, require that a non‐Federal entity minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Advance payments to non-Federal entity must be limited to the minimum amounts needed and be time to be in accordance with the actual, immediate cash requirement of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The Federal Payment Management Services system payment program further clarifies that cash must be drawn solely to accommodate immediate needs on an “As Needed Basis Only” and must not be held in excess of three working days. Condition/Context Out of the cash drawdown of $792,012 requested on December 9, 2022, $565,193 was for forecasted costs through June of 2023. This draw was made in excess of three business days before disbursing the funds. Cause The Organization’s internal controls were not properly designed and implemented to ensure compliance with the cash management requirements. Effect Cash advances were drawn in excess of the immediate cash requirements of the Organization. Questioned Costs $565,193 Repeat Finding No. Recommendation We recommend the Organization implement a cash management policy to ensure that the time elapsing between the transfer of funds from US Treasury and disbursement for direct program is minimized. The time between draw and disbursement should be no longer than three business days. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2023-005
Finding 2023-005 Material weakness in internal control over compliance for subrecipient monitoring Federal Agency: United States Department of State Program Titles: Office of Global Women’s Issues Assistance Listing Number: 19.801 Pass-Through Entity: N/A Award Numbers: SLMAQM21CA3275 Award Periods: September 30, 2021 through September 30, 2025 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart F ‐ Section 200.332(d) through (f), policy guide, require that a non‐Federal entity monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must among others include the following: ‐ Reviewing financial and programmatic (performance and special reports) required by the Pass Through Entity (PTE). ‐ Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. ‐ Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Condition/Context The Organization’s internal controls require review of quarterly financial and programmatic reports for all sub recipients. During our subrecipient monitoring testing, we note that one of the subrecipient’s ceased to provide the Organization with quarterly financial reports since January 2023 and through the year ended June 30, 2023. Cause The Organization’s did not enforce its policies per the subrecipient agreement to ensure that the quarterly reports are provided and reviewed. Effect The Organization’s subrecipient monitoring does not provide reasonable assurance that the subrecipient used the subaward for authorized purposed purposes in compliance with federal regulations. Questioned Costs $90,000 Repeat Finding No. Recommendation We recommend the Organization implement measures to ensure that all subrecipients comply with reporting and other terms and conditions of the subrecipient agreements. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2023-002
Finding 2023-002 Significant deficiency in internal control over compliance for allowable costs related to timesheet approvals. Federal Agency: United States Department of State Program Titles: Office of Global Women’s Issues Assistance Listing Number: 19.801 Pass-Through Entity: N/A Award Numbers: SLMAQM21CA3275 Award Periods: September 30, 2021 through September 30, 2025 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart E ‐ Cost Principles, Section 200.400, policy guide, require that a non‐Federal entity ensure that charges to federal awards for salaries and wages be based on records that accurately reflect the work performed and must include among other things: be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; be incorporated into the official records of the non-federal entity and reasonably reflect the total activity for which the employee is compensated, not exceeding 100% of compensated activities. Condition/Context The Organization’s internal controls require review and approval of costs charged to the Federal awards by a knowledgeable and authorized individual to ensure that costs are accurately charged. During our direct and indirect payroll testing, we noted multiple cases in which the hours charged to grants were not appropriately approved by the authorized personnel. This was noted in 20 of the total 71 payroll transactions tested. Additionally, 4 out of the total 31 indirect payroll costs tested were missing evidence of pay rate authorizations or approvals. Cause The Organization’s internal controls failed to prevent, or detect and timely correct, these payroll errors from occurring. Effect Payroll charges to the federal awards could result in questioned costs as errors would not have been identified by the employee's supervisor. Questioned Costs Not determinable. Repeat Finding No. Recommendation We recommend the Organization implement measures to ensure that all employee timesheets are reviewed and approved by authorized personnel. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2023-003
Finding 2023-003 Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department of State Program Titles: Office of Global Women’s Issues Assistance Listing Number: 19.801 Pass-Through Entity: N/A Award Numbers: SLMAQM21CA3275 Award Periods: September 30, 2021 through September 30, 2025 Criteria Internal controls requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance) , Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.326 Internal Controls, require that a non‐Federal entity use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirement identified in 2 CFR Part 200. A nonfederal entity among others must: - Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). - For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). Condition/Context Although the Organization has a procurement policy, and the procedures include the use of a micro purchase threshold of $3,500, small purchases and simplified acquisition thresholds are not clearly identified. As such, the policy does not fully incorporate the procurement standards of the Uniform Guidance including sealed bids, cost or price analysis etc. Cause The Organization's management was not aware that all components including procurement methods of 2 CFR section 200.320 are required to be included in the Organization's procurement policy even if the Organization's procurements would not typically include all procurement methods. Effect The Organization did not ensure that its procurement policy follows the procurement standards set out at 2 CFR Part 200. Questioned Costs Not determinable. Repeat Finding No. Recommendation We recommend the Organization implement measures to ensure that its procurement policy reflect applicable state and local laws and regulations and conform to applicable federal statutes and requirements in 2 CFR Part 200. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2023-004
Finding 2023-004 Material weakness in internal control over compliance for cash management related to cash advances Federal Agency: United States Department of State Program Titles: Office of Global Women’s Issues Assistance Listing Number: 19.801 Pass-Through Entity: N/A Award Numbers: SLMAQM21CA3275 Award Periods: September 30, 2021 through September 30, 2025 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.305(b), Internal Controls, require that a non‐Federal entity minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Advance payments to non-Federal entity must be limited to the minimum amounts needed and be time to be in accordance with the actual, immediate cash requirement of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The Federal Payment Management Services system payment program further clarifies that cash must be drawn solely to accommodate immediate needs on an “As Needed Basis Only” and must not be held in excess of three working days. Condition/Context Out of the cash drawdown of $792,012 requested on December 9, 2022, $565,193 was for forecasted costs through June of 2023. This draw was made in excess of three business days before disbursing the funds. Cause The Organization’s internal controls were not properly designed and implemented to ensure compliance with the cash management requirements. Effect Cash advances were drawn in excess of the immediate cash requirements of the Organization. Questioned Costs $565,193 Repeat Finding No. Recommendation We recommend the Organization implement a cash management policy to ensure that the time elapsing between the transfer of funds from US Treasury and disbursement for direct program is minimized. The time between draw and disbursement should be no longer than three business days. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2023-005
Finding 2023-005 Material weakness in internal control over compliance for subrecipient monitoring Federal Agency: United States Department of State Program Titles: Office of Global Women’s Issues Assistance Listing Number: 19.801 Pass-Through Entity: N/A Award Numbers: SLMAQM21CA3275 Award Periods: September 30, 2021 through September 30, 2025 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart F ‐ Section 200.332(d) through (f), policy guide, require that a non‐Federal entity monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must among others include the following: ‐ Reviewing financial and programmatic (performance and special reports) required by the Pass Through Entity (PTE). ‐ Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. ‐ Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Condition/Context The Organization’s internal controls require review of quarterly financial and programmatic reports for all sub recipients. During our subrecipient monitoring testing, we note that one of the subrecipient’s ceased to provide the Organization with quarterly financial reports since January 2023 and through the year ended June 30, 2023. Cause The Organization’s did not enforce its policies per the subrecipient agreement to ensure that the quarterly reports are provided and reviewed. Effect The Organization’s subrecipient monitoring does not provide reasonable assurance that the subrecipient used the subaward for authorized purposed purposes in compliance with federal regulations. Questioned Costs $90,000 Repeat Finding No. Recommendation We recommend the Organization implement measures to ensure that all subrecipients comply with reporting and other terms and conditions of the subrecipient agreements. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.