Corrective Action Plans

Finding 397351 (2023-037)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with federal level of effort requirements for the Education Stabilization Fund program. Questioned Costs: Assistance Listing # 84.425D 84.425R 84.425U 84.425V 84.425W Amount $0 Status: C...

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with federal level of effort requirements for the Education Stabilization Fund program. Questioned Costs: Assistance Listing # 84.425D 84.425R 84.425U 84.425V 84.425W Amount $0 Status: Corrective action not required Corrective Action: The Office does not concur with the audit finding. The Office maintains monthly monitoring details on agency expenditures. The expenditure data has not changed since the close of the fiscal year. The finding was based on preliminary information and data that the auditors obtained in November 2023. In December 2023, the Office submitted updated expenditure data to the Office of Elementary and Secondary Education (OESE) in accordance with OESE guidance to correctly include every budgeted funding source in the maintenance of effort (MOE) calculations. The Office met the MOE requirement for fiscal year 2023; therefore, there is no need for a waiver request. The Office will also continue to work with the Legislature, which is the state-level authority for state appropriations, to ensure the state maintains the MOE requirements. Completion Date: Not applicable Agency Contact: Sara Rupe Deputy Statewide Accounting Director PO Box 43127 Olympia, WA 98504-3127 (360) 974-9252 sara.rupe@ofm.wa.gov

View Audit 306534

Finding 397220 (2023-030)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Procurement, Suspension & Debarment § 200.328

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with reporting requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $0 Status: Corrective action comp...

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with reporting requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Office has continued to strengthen internal controls for the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) reporting to ensure compliance with the federal requirements. The Office will continue to: • Monitor updates to the U.S Treasury’s Project and Expenditure Report User Guide. • Improve the quarterly reporting template and assist state agencies during the reporting process. • Communicate with agencies to remind them of the requirement to maintain adequate supporting documentation for all reports, including quarterly reported obligations. • Ensure reported amounts, including corrections or adjustments made during the reporting period, are properly tracked and documented for the subsequent reporting cycles. • Perform reconciliations of reported expenditures to ensure agency expenditures are accurately reported, allowing for adjustments/ corrections required due to issues with the reporting system. • Ensure reported expenditures and supporting accounting records are adequately reviewed by management before the information is uploaded to the federal reporting system. • Document correspondences with the U.S. Treasury when system errors are identified and resolutions recommended by the grantor, if received. The conditions noted in this finding were previously reported in finding 2022-020. Completion Date: January 2024 Agency Contact: Sara Rupe Deputy Statewide Accounting Director PO Box 43127 Olympia, WA 98504-3127 (360) 974-9252 sara.rupe@ofm.wa.gov

View Audit 306534

Finding 397216 (2023-026)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring § 200.334 § 200.335 § 200.336 § 200.337

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with requirements to ensure Coronavirus State and Local Fiscal Recovery Funds were used for only allowable activities. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $30...

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with requirements to ensure Coronavirus State and Local Fiscal Recovery Funds were used for only allowable activities. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $300,000,000 Status: Corrective action not taken Corrective Action: The Office does not concur with the audit finding. The state of Washington implemented internal controls and created Fund 706 to track the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) expenditures. The state, through legislation, approved the transfer of $300 million from the SLFRF account to various state transportation accounts under the revenue loss provision. The Office reaffirms that all expenditures from the transportation accounts that received the SLFRF funds were used to maintain government services. The State Administrative and Accounting Manual requires all state agencies to establish internal controls over payments for goods and services, including ensuring payments are lawful and for proper purposes, reviewing payments to ensure they are supported, as well as documenting the review of all payments. State agencies continued to follow their established internal controls to ensure expenditures from the transportation accounts were proper and allowable for both non-SLFRF and SLFRF funds. The Office will continue to: • Work with the U.S. Treasury, through the audit resolution and management decision process, to ensure no questioned costs are required to be repaid. • Document all correspondence with the grantor during the audit resolution process. The conditions noted in this finding were previously reported in finding 2022-018. Completion Date: Not applicable Agency Contact: Sara Rupe Deputy Statewide Accounting Director PO Box 43127 Olympia, WA 98504-3127 (360) 974-9252 sara.rupe@ofm.wa.gov

View Audit 306534 Questioned Costs: $1

Finding 397209 (2023-023)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking

Finding: The Housing Finance Commission did not have adequate internal controls over earmarking requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Commissio...

Finding: The Housing Finance Commission did not have adequate internal controls over earmarking requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Commission will take the following corrective actions to strengthen controls over earmarking requirements for the Homeowner Assistance Fund (HAF) program: • Develop a system to track and monitor expenditures in relation to overall program expenditures to ensure earmarking requirements are within allowable parameters. • Select an increased percentage of approved, denied, and withdrawn HAF applications that have previously been reviewed by the contractor, as part of the Quality Control process, for a secondary review by program staff. • Review a selection of HAF applications independent of the Quality Control process performed by the contractor. • Review a selection of approved HAF applications prior to disbursing funds to confirm eligibility determinations are proper. Completion Date: Estimated June 2024 Agency Contact: Lucas Loranger Senior Finance Director 1000 Second Ave, Suite 2700 Seattle, WA 98104-3601 (206) 464-7139 Lucas.Loranger@wshfc.org

View Audit 306534

Finding 397208 (2023-022)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Eligibility Internal Control / Segregation of Duties

Finding: The Housing Finance Commission did not have adequate internal controls over eligibility requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Commissi...

Finding: The Housing Finance Commission did not have adequate internal controls over eligibility requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Commission will take the following corrective actions to strengthen controls over eligibility requirements for the Homeowner Assistance Fund (HAF) program: • Select an increased percentage of approved, denied, and withdrawn HAF applications that have previously been reviewed by the contractor, as part of the Quality Control process, for a secondary review by program staff. • Review a selection of HAF applications independent of the Quality Control process performed by the contractor. • Review a selection of approved HAF applications prior to disbursing funds to confirm eligibility determinations are proper. Completion Date: Estimated June 2024 Agency Contact: Lucas Loranger Senior Finance Director 1000 Second Ave, Suite 2700 Seattle, WA 98104-3601 (206) 464-7139 Lucas.Loranger@wshfc.org

View Audit 306534

Finding 397207 (2023-021)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties

Finding: The Department of Commerce did not have adequate internal controls over federal requirements to ensure subawards for the Emergency Rental Assistance program contained the correct federal award identification elements. Questioned Costs: Assistance Listing # 21.023 COVID-19 Amount $0 St...

Finding: The Department of Commerce did not have adequate internal controls over federal requirements to ensure subawards for the Emergency Rental Assistance program contained the correct federal award identification elements. Questioned Costs: Assistance Listing # 21.023 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: During 2022, the Department identified the need to determine subrecipient and contractor classifications on the face sheet of all contracts. The Department implemented the following actions: • Added a check box to all federal contract template face sheets to designate whether a contract is issued to a subrecipient or contractor. • Added all federal subaward required data elements to the face sheet. The Department followed these updated procedures until the program ended June 30, 2023. Completion Date: October 2022 Agency Contact: Gena Allen, CFE Internal Control Officer PO Box 42525-2525 Olympia, WA 98504 (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 306534

Finding 397205 (2023-019)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Reporting Subrecipient Monitoring Internal Control / Segregation of Duties

Finding: The Department of Commerce did not have adequate internal controls over reporting requirements for the Emergency Rental Assistance program. Questioned Costs: Assistance Listing # 21.023 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department has imple...

Finding: The Department of Commerce did not have adequate internal controls over reporting requirements for the Emergency Rental Assistance program. Questioned Costs: Assistance Listing # 21.023 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department has implemented procedures to strengthen internal controls and eliminate possible errors to ensure required approval of quarterly financial reports (SF-425) is documented within the Contracts Management System (CMS). The Accounting Department is responsible for the completion of the SF-425. Accounting management staff, or their delegate, utilize a newly created tracking log to document the date approval is submitted within CMS. The documentation of approval confirms the completion of management review prior to submission of the report. Funding for this program ended June 30, 2023. The Department will follow these updated procedures for other federal programs with similar reporting requirements. The conditions noted in this finding were previously reported in finding 2022-017. Completion Date: October 2023 Agency Contact: Gena Allen, CFE Internal Control Officer PO Box 42525 Olympia, WA 98504-2525 (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 306534

Finding 397203 (2023-017)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles § 200.1 § 200.403 § 200.410 § 200.516

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to ensure payments to subrecipients of the Emergency Rental Assistance program were allowable and properly supported. Questioned Costs: Assistance Listing # 21.023 COVID-19 A...

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to ensure payments to subrecipients of the Emergency Rental Assistance program were allowable and properly supported. Questioned Costs: Assistance Listing # 21.023 COVID-19 Amount $4,123,486 Status: Corrective action complete Corrective Action: The funding for the Emergency Rental Assistance program ended on June 30, 2023. The Department is no longer funding this program. To address the control deficiencies reported in the prior year’s finding, the Department improved internal control processes, resulting in improved compliance. The Department strives to meet all federal requirements and any repayment of questioned costs will be determined through the normal audit resolution process with the U.S. Treasury. The conditions noted in this finding were previously reported in finding 2022-016. Completion Date: July 2023 Agency Contact: Gena Allen, CFE Internal Control Officer PO Box 42525 Olympia, WA 98504-2525 (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 306534 Questioned Costs: $1

Finding 397197 (2023-014)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Special Tests & Provisions

Finding: The Washington State Department of Transportation did not have adequate internal controls over and did not comply with quality assurance program requirements to ensure materials conformed to approved plans and specifications, and that only qualified personnel performed testing for projects...

Finding: The Washington State Department of Transportation did not have adequate internal controls over and did not comply with quality assurance program requirements to ensure materials conformed to approved plans and specifications, and that only qualified personnel performed testing for projects funded by the Highway Planning and Construction Cluster. Questioned Costs: Assistance Listing # 20.205 Amount $0 Status: Corrective action in progress Corrective Action: The Department is committed to ensuring that our grant programs comply with federal regulations related to quality assurance (QA) requirements and safeguarding that materials and workmanship conform to approved plans and specifications through testing, inspections, or certifications. The Department has worked closely with the Federal Highway Administration (FHWA) on our QA program and continues to receive feedback on the strength of our program. The Department has been working towards replacement of the Record of Materials (ROM) legacy system; therefore, it was not practical to modify the system to help correct issues previously reported in the fiscal year 2022 audit. During fiscal year 2023, the Department eliminated the practice requiring updates to the ROM within 30 days of payment and instead relied on the required documentation as evidence of proper materials acceptance. Due to the timing of implementation, these changes were not fully reflected in the current year’s audit. In January 2023, as a result of recommendations from the fiscal year 2022 audit, the Department modified its practice related to how tester data is reviewed and entered into the tester certification tracking system. All offices now funnel tester data to the Headquarters Quality Assurance Program for review and entry. These procedure changes were communicated to appropriate staff and are reflected in the Construction Manual, which was reviewed and approved by FHWA. The Department is also assessing replacement of additional software legacy programs associated with the QA program. The Department will continue to improve the QA program while waiting for the new software programs to be fully developed. To address the audit recommendations, the Department’s Construction Division will examine current policies and procedures/practices related to the audit issues. The Department will: • Update policies and procedures, including the Department’s Construction Manual (M46-01), as needed to ensure staff practices meet federal regulations. Updates will also include other clarifications to address documentation and evidence of compliance, and a reasonable level of controls regarding materials testing, inspections, certification, acceptance, and tester certifications. Completion Date: Agency Contact: • Obtain approval of updates to the Construction Manual from the FHWA. • Communicate changes in policies and procedures to division staff and stakeholders. • Provide training to Project Engineering Office staff to emphasize QA program requirements. The conditions noted in this finding were previously reported in findings 2022-011, 2021-011, 2020-017 and 2019-019. Completion Date: Estimated June 2024 Agency Contact: Jesse Daniels External Audit Liaison PO Box 47320 Olympia, WA 98504 (360) 705-7035 danielje@wsdot.wa.gov

View Audit 306534

Finding 397196 (2023-013)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Special Tests & Provisions

Finding: The Washington State Department of Transportation did not have adequate internal controls over and did not comply with requirements to collect certified payrolls from contractors on projects funded by the Highway Planning and Construction program. Questioned Costs: Assistance Listing # ...

Finding: The Washington State Department of Transportation did not have adequate internal controls over and did not comply with requirements to collect certified payrolls from contractors on projects funded by the Highway Planning and Construction program. Questioned Costs: Assistance Listing # 20.205 Amount $0 Status: Corrective action in progress Corrective Action: In April 2019 and July 2020, the Department received management decision letters from the Federal Highway Administration (FHWA) in response to similar findings for the fiscal years 2018 and 2019, respectively, which stated: • FHWA approved the Department’s Construction Manual and Standard Specifications and confirmed that documented procedures contain the necessary controls to ensure reasonable compliance with 29 CFR 5.5 and the Davis-Bacon and Related Acts. • FHWA agreed that current processes in place are reasonable and satisfy the intent of the Department of Labor’s certified payroll requirements. • FHWA considers this finding to be resolved. The Department continues to strive for improvements in this area. To further address the audit recommendations, the Department is planning on taking the following actions by December 2024: • Update the Construction Manual to include language for certified payroll collection requirements when no work is performed on federal projects. • Review and update the Construction Manual, as needed, to clarify the authority to withhold payments regarding federal wage administration. • Standardize the required frequency of checking for certified payroll collection and the methods to document tracking. • Define “timely,” given the circumstances surrounding weekly collection of certified payrolls and sanctions on a monthly pay estimate, including: o Defining the timeline when the Department must communicate overdue certified payroll to the contractor and the allowable methods of that communication. o Defining the timeline for determining when the Department must consider imposing sanctions on the contractor after a certified payroll is overdue. o Defining the minimum required documentation that sanctions (e.g., partial deferral of payment) were considered against the contractor regarding an overdue certified payroll. • Communicate any changes to the Construction Manual to appropriate construction staff and partners. • Continue to work with our federal grantor, FHWA, for any further actions needed to resolve this finding. Completion Date: Agency Contact: Estimated December 2024 Jesse Daniels External Audit Liaison PO Box 47320 Olympia, WA 98504-7320 (360) 705-7035 danielje@wsdot.wa.gov

View Audit 306534

Finding 397195 (2023-012)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties

Finding: The Washington State Department of Transportation did not have adequate internal controls over and did not comply with requirements to perform risk assessments for subrecipients of the Highway Planning and Construction program. Questioned Costs: Assistance Listing # 20.205 Amount $0 St...

Finding: The Washington State Department of Transportation did not have adequate internal controls over and did not comply with requirements to perform risk assessments for subrecipients of the Highway Planning and Construction program. Questioned Costs: Assistance Listing # 20.205 Amount $0 Status: Corrective action in progress Corrective Action: The Washington State Department of Transportation (WSDOT) is committed to ensuring our grant programs comply with federal regulations regarding required risk assessments. Risk assessments for subrecipients under the Federal Highway Administration grant programs are the responsibility of WSDOT’s Regional Local Programs Engineers, located in the six WSDOT regions. The Department has attempted to complete a risk assessment at each phase of a project, however, staff turnover contributed to the lack of consistency and timeliness in completing these assessments. To help ensure consistency, the Department has updated position descriptions for Local Programs Engineers to reflect this requirement. The Department will: • Continue to communicate with Regional Local Programs Engineers to ensure risk assessments are performed and properly documented in accordance with the risk assessment program guidelines. • Continue to communicate with regional management to ensure required monitoring activities by staff are tracked, and the status of these activities are reported as part of annual performance evaluations. Completion Date: Estimated June 2024 Agency Contact: Jesse Daniels External Audit Liaison PO Box 47320 Olympia, WA 98504-7320 (360) 705-7035 danielje@wsdot.wa.gov

View Audit 306534

Finding 397189 (2023-010)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Special Tests & Provisions

Finding: The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it profiled all claimants under the Unemployment Insurance program to identify people likely to need reemployment services and ensure staff providing those service...

Finding: The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it profiled all claimants under the Unemployment Insurance program to identify people likely to need reemployment services and ensure staff providing those services received required training. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Department concurs with the recommendation to review the calculation of the profile score within the Unemployment Tax and Benefit (UTAB) system. The Department will explore a plan and review resource allocations to more effectively validate the profile score to ensure that coefficient values are correctly determined and assigned by the UTAB system. The Department partially concurs with the recommendation to reconcile the UTAB and Reemployment Appointment Scheduler (RAS) interface. There is currently a process in place to notify the RAS team if a record fails at the time of data transmission between UTAB and RAS. The Department will review its processes to verify the complete UTAB exit file was successfully received by RAS. The Department does not concur with the recommendation to implement additional internal controls over the claimant profiling process. The Department has coordinated closely with the U.S. Department of Labor (USDOL) to conduct the randomized control trial (RCT) to evaluate the Reemployment Services and Eligibility Assessments (RESEA). The Department has written approval from USDOL to utilize this method concurrently with the program’s established process. All program-eligible applicants are scored and provided a risk profile score based on both established standards and a random score for the purposes of carrying out the RCT. The Department does not concur with the recommendation to ensure all employees receive the required RESEA training before providing reemployment screening services to claimants. The Department has internal controls in place to ensure training requirements are met and staff are not granted access to schedule appointments for RESEA services without first receiving the required training. The exceptions noted by the auditors relate to the annual refresher training. In the fall of 2022, the Department implemented procedures to formally track the refresher training completed by RESEA staff. The audit exceptions identified were for two staff not currently providing RESEA services to clients. These individuals will receive the refresher training prior to providing RESEA services going forward. Completion Date: Estimated April 2025 Agency Contact: Jay Summers External Audit Manager PO Box 9046 Olympia, WA 98507-9046 (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 306534

Finding 397188 (2023-009)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Finding: The Employment Security Department did not have adequate internal controls over and did not comply with federal requirements to conduct case reviews for the Benefit Accuracy Measurement program of the Unemployment Insurance program in a timely manner. Questioned Costs: Assistance Listin...

Finding: The Employment Security Department did not have adequate internal controls over and did not comply with federal requirements to conduct case reviews for the Benefit Accuracy Measurement program of the Unemployment Insurance program in a timely manner. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: Historically, the Benefit Accuracy Measurement (BAM) unit has been challenged to maintain full levels of staffing. Staff turnover, long training requirements, and unique skill sets make these positions difficult to maintain. During the prior audit period, the Department was in a hiring freeze for Unemployment Insurance administrative funding, furthering the challenge to fully staff the unit and meet program requirements. The hiring freeze was lifted in April 2023 and the unit began filling vacant positions in May 2023. Due to the lengthy training timelines for new positions, the Department anticipated the unit would not meet federally mandated performance measures for case reviews for state fiscal year 2023. The Department continues to partner and frequently communicate with the U.S. Department of Labor (USDOL) Regional Offices to discuss staffing and training models. The Quality Assurance Manager and the Case Review Supervisor are committed to routinely monitor caseload, workload, and the overall assurance of meeting the BAM operations performance goals and measures as set forth by USDOL. The conditions noted in this finding were previously reported in findings 2022-006, 2021-005, and 2020-011. Completion Date: Estimated March 2025 Agency Contact: Jay Summers External Audit Manager PO Box 9046 Olympia, WA 98507-9046 (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 306534

Finding 397187 (2023-008)

Significant Deficiency 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Equipment & Real Property Management

Finding: The Employment Security Department did not have adequate internal controls to ensure it submitted accurate monthly reports for the Unemployment Insurance program. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action complete Correctiv...

Finding: The Employment Security Department did not have adequate internal controls to ensure it submitted accurate monthly reports for the Unemployment Insurance program. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: In response to the prior year’s finding, the Department immediately implemented the secondary review of the monthly ETA 9055 performance reports. However, the auditor’s recommendation and the Department’s implementation occurred after state fiscal year 2023 had begun. The Department expects adequate internal controls to be in place and functioning for fiscal year 2024 and onward. The conditions noted in this finding were previously reported in finding 2022-005. Completion Date: May 2023 Agency Contact: Jay Summers External Audit Manager PO Box 9046 Olympia, WA 98507-9046 (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 306534

Finding 397186 (2023-007)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Allowable Costs / Cost Principles

Finding: The Employment Security Department did not have adequate internal controls to ensure it submitted accurate financial reports for the Unemployment Insurance program. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action complete Correct...

Finding: The Employment Security Department did not have adequate internal controls to ensure it submitted accurate financial reports for the Unemployment Insurance program. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department has implemented procedures to ensure the ETA 9130 and ETA 2112 reports have a secondary review by management prior to submission to the federal grantor. Additionally, documentation of the review and submission will be maintained. Completion Date: February 2024 Agency Contact: Jay Summers External Audit Manager PO Box 9046 Olympia, WA 98507-9046 (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 306534

Finding 397182 (2023-003)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties

Finding: The Office of Superintendent of Public Instruction did not have adequate internal controls over and did not comply with requirements to ensure it communicated federal award identification elements to subrecipients of the Child and Adult Care Food Program. Questioned Costs: Assistance Li...

Finding: The Office of Superintendent of Public Instruction did not have adequate internal controls over and did not comply with requirements to ensure it communicated federal award identification elements to subrecipients of the Child and Adult Care Food Program. Questioned Costs: Assistance Listing # 10.558 Amount $0 Status: Corrective action in progress Corrective Action: In response to the audit finding, the Office: • Will establish policies and procedures and internal controls to communicate federal award information and requirements to all subrecipients. • Is consulting with the U.S. Department of Agriculture for additional guidance on communicating subaward information for programs that are reimbursement based. Completion Date: Estimated August 2024 Agency Contact: Leanne Eko Chief Nutrition Officer PO Box 47200 Olympia, WA 98504-7200 (360) 725-0410 Leanne.eko@k12.wa.us

View Audit 306534

Finding 397174 (2023-005)

Material Weakness 2023

Dakota Plains Legal Services, Inc.

SD

Special Tests & Provisions Subrecipient Monitoring Material Weakness

Legal Services Corporation CFDA #09-742018 Legal Services Corporation - Basic Field - General CFDA #09-742018 Legal Services Corporation - Basic Field - Native American Special Tests & Provisions -Accounting Requirements Material Weakness in Internal Control over Compliance Condition: DPLS has not...

Legal Services Corporation CFDA #09-742018 Legal Services Corporation - Basic Field - General CFDA #09-742018 Legal Services Corporation - Basic Field - Native American Special Tests & Provisions -Accounting Requirements Material Weakness in Internal Control over Compliance Condition: DPLS has not performed an annual risk assessment since 2021, nor tested an emergency disaster prevention and recovery plan. Management Response: DPLS is going to seek outside assistance to have a complete risk assessment and review of our emergency disaster and recovery plans completed. After the assessment is finished, management will review the findings, and make every effort to enact the recommendations made to the program. Responsible Individuals: Lori Stanford, Deputy Director, Tom Mortland, Executive Director. Anticipated Completion Date: December 31, 2024.

View Audit 306525

Finding 397170 (2023-003)

Significant Deficiency 2023

Dakota Plains Legal Services, Inc.

SD

Internal Control / Segregation of Duties Cash Management Eligibility

Legal Services Corporation FFAL #09-742018 Legal Services Corporation - Basic Field - General FFAL #09-742018 Legal Services Corporation - Basic Field - Native American Eligibility Significant Deficiency in Internal Control over Compliance and Noncompliance Condition: The auditor's testing detecte...

Legal Services Corporation FFAL #09-742018 Legal Services Corporation - Basic Field - General FFAL #09-742018 Legal Services Corporation - Basic Field - Native American Eligibility Significant Deficiency in Internal Control over Compliance and Noncompliance Condition: The auditor's testing detected two instances in which U.S. Citizen Attestation was not retained. Management's Response: All employees have received additional training on compliance procedures, and new employees will receive the same. All files being closed are now reviewed first for accuracy by the case handler of that file. The files are double checked by the office secretary. At the end of the quarter, all files are sent to compliance for a third review. Any needed corrections are noted by compliance and the file is then sent back to the office where it originated from to be corrected. Then the corrections to the file are reported back to compliance to verify that they have been made. All Legal Secretary staff have just completed a mandatory two-day in-person training session, which in large part covered this and other compliance related issues. By the end of June 2024, all case handlers will receive in-person training on compliance issues. The program has also started a new procedure where any client coming into an office is asked to complete an attestation statement which can be added to the client file if needed. Responsible Individuals: Dawn Marshall, Co-Compliance Officer, Kaeleigh Lundberg, Co-Compliance Officer, Tom Mortland, Executive Director, Lori Stanford, Deputy Director. Anticipated Completion Date: July 31, 2024.

View Audit 306525

Finding 397162 (2023-001)

Significant Deficiency 2023

City of Texas City, Texas

TX

Internal Control / Segregation of Duties Subrecipient Monitoring HUD Housing Programs

Please note the following corrective action plan regarding the CD BG-CAPER for the single audit report for FY-2023. Should you have any questions or require additional information, please contact me at your convenience. I. Corrective Action Plan Finding #2023-001 - Entitlement Grants Cluster; Perfo...

Please note the following corrective action plan regarding the CD BG-CAPER for the single audit report for FY-2023. Should you have any questions or require additional information, please contact me at your convenience. I. Corrective Action Plan Finding #2023-001 - Entitlement Grants Cluster; Performance Reporting Corrective Action Plan The City will identify and assign additional personnel to cross-train on CAPER preparation as well as filing protocols for subsequent periods. Anticipated Completion Date September 30, 2024 Auditee Contact Person Jon R. Branson, Executive Director of Management Services

View Audit 306520

Finding 397078 (2023-002)

Significant Deficiency 2023

Legal Aid of Nebraska

NE

Equipment & Real Property Management Internal Control / Segregation of Duties

FINDING 2023-002: SUPPORT FOR LSC FUNDED PROPERTY Please provide an explanation of how your Organization plans to resolve any further issues surrounding eligibility moving forward. Legal Aid will continue to follow up with last year’s auditors to obtain the necessary information. If these attempts a...

FINDING 2023-002: SUPPORT FOR LSC FUNDED PROPERTY Please provide an explanation of how your Organization plans to resolve any further issues surrounding eligibility moving forward. Legal Aid will continue to follow up with last year’s auditors to obtain the necessary information. If these attempts are unsuccessful, we will collaborate with LSC to determine if they have the information on file. Should neither of these avenues yield results, we will review physical audit files from previous years in an attempt to retrieve the information retroactively. Reasonable completion date: December 31st, 2024 Responsible Party: Stephanie Kitselman, Interim CFO – this will transition to the new inhouse Finance Director upon hire in 2024.

View Audit 306498

Finding 397067 (2023-001)

Significant Deficiency 2023

The University of Vermont Health Network INC

VT

Allowable Costs / Cost Principles Cash Management Reporting § 200.303

Management’s Views and Corrective Action Plan 2023-001 Significant deficiency in reporting for lack of submitting required documentation related to HRSA for previously reported Provider Relief Funds Cluster: Not applicable Federal Granting Agency: Health Resources and Services Administration (HRSA) ...

Management’s Views and Corrective Action Plan 2023-001 Significant deficiency in reporting for lack of submitting required documentation related to HRSA for previously reported Provider Relief Funds Cluster: Not applicable Federal Granting Agency: Health Resources and Services Administration (HRSA) Award Year: 1/1/2020 6/30/2023 Assistance Listing #: 93.498 Assistance Listing Title: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Pass-through entity: Not applicable Management has reassessed its internal controls over the review and approval of PRF submissions. The Network has now completed all PRF portal submissions, and this program has come to an end. Leadership Responsible: Steve Warren, Network Mgr. Grants Management Finance; Melissa Laurie, Network VP/Corporate Controller Anticipated Completion Date: 3/1/2024

View Audit 306487

Finding 397034 (2023-007)

Material Weakness 2023

George Washington Carver Academy

MI

Special Tests & Provisions Procurement, Suspension & Debarment Material Weakness

Corrective Action Plan: The Academy along with its new management company are reviewing, revising, and developing internal controls as necessary in order to comply with compliance requirements relevant to federal programs. Responsible Department: School Leadership and Board and Financial Service ...

Corrective Action Plan: The Academy along with its new management company are reviewing, revising, and developing internal controls as necessary in order to comply with compliance requirements relevant to federal programs. Responsible Department: School Leadership and Board and Financial Service Provider together with which includes the bookkeeping, payroll, grants management, and purchasing functions. Responsible Person: Laura Carpenter, Comptroller, CS Partners Planned Completion Date: Immediate

View Audit 306409

Finding 397024 (2023-002)

Significant Deficiency 2023

Town of Swansea

MA

Special Tests & Provisions Significant Deficiency Matching / Level of Effort / Earmarking

Moving forward, internal controls have been updated to require all projects that necessitate prevailing wage rates have the proper backup and documentation.

View Audit 306406

Finding 396994 (2023-006)

Material Weakness 2023

City of Idaho Falls, Idaho

ID

Reporting Material Weakness Internal Control / Segregation of Duties § 200.329

Federal Agency Name: U.S. Treasury Department; Assistance Listing Number: 21.027; Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds; Material Weakness in Internal Control Over Compliance – Compliance Requirement – Reporting Finding Summary: The City’s submitted quarterly r...

Federal Agency Name: U.S. Treasury Department; Assistance Listing Number: 21.027; Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds; Material Weakness in Internal Control Over Compliance – Compliance Requirement – Reporting Finding Summary: The City’s submitted quarterly reports as required, but the reports contained errors including incorrect amounts and reporting information on the incorrect line items. Corrective Action Planned: The City concurs with the auditors’ findings. The City is working to coordinate and maintain supporting documentation used to prepare and review quarterly reports prior to submission to ensure the accuracy of the reports submitted. Responsible Individual(s): Mark Hagedorn, Finance Manager/Treasurer; Brooks Slyter, Assistant Finance Manager; Lisa Farris, Grant Administrator Anticipated Completion Date: October 2024

View Audit 306396

Finding 396987 (2023-002)

Material Weakness 2023

Connected Lane County

OR

Material Weakness Internal Control / Segregation of Duties

Finding 2023-002 Corrective Action Planned : Management is already tracking federal expenditures throughout the year. Management will review annual federal expenditures in a timely manner to ensure that we understand whether we need to undergo a single audit. Date by which corrective action will be ...

Finding 2023-002 Corrective Action Planned : Management is already tracking federal expenditures throughout the year. Management will review annual federal expenditures in a timely manner to ensure that we understand whether we need to undergo a single audit. Date by which corrective action will be implemented: July 2024, following the close of year-end. Person(s) Responsible: Heidi Larwick, Executive Director and Mary Bell , Finance Specialist

View Audit 306391

Corrective Action Plans

Filters