Corrective Action Plans

Finding 1166577 (2024-019)

Material Weakness 2024

CA

Period of Performance § 200.303

California Department of Fish and Wildlife • The Accounting Services Branch (ASB) will document the process by updating the respective desk procedures to clearly direct staff to only approve vouchers with dates consistent with the Project ID start and end date as identified on the FI$Cal Crosswalk. ...

California Department of Fish and Wildlife • The Accounting Services Branch (ASB) will document the process by updating the respective desk procedures to clearly direct staff to only approve vouchers with dates consistent with the Project ID start and end date as identified on the FI$Cal Crosswalk. • Ensure new staff within ASB are trained on the desk procedures before they begin approving vouchers in FI$Cal. Estimated Implementation Date: March 31, 2026 Contact: Jing Lin, Branch Chief, Accounting Services Branch California Department of Transportation The Division of Research, Innovation and System Information staff have developed the following corrective actions in response to the audit finding: TEC Charging Guidance and Training To ensure research project Contract Managers properly code a Travel Expense Claim (TEC), the following guidance and training actions will be implemented. • The Division’s Contract Manager Handbook and Training documentation will be updated to provide staff with guidance ensuring that TEC charging information aligns with the fiscal year (FY) in which the travel expenses occurred. • DRISI Contract Managers and their first- and second-line supervisors will be trained on the change and will receive the annual reminder. A record of attendance of training will be maintained. • New hires will receive TEC charging practices training within 30 days of their start date. Annual TEC Coding Reminder To ensure TECs are coded accurately to the correct Federal Project Number, an annual email reminder will be sent to DRISI staff beginning in the month of May for coding/charging TECs. • The reminder will instruct staff to code and charge TECs to the fiscal year and federal project number in which the expense was incurred. • A list of tasks and project IDs will be attached to the email to minimize errors and ensure consistency. In addition, the program will send a reminder to the TEC/Accounting Office to: • Charge and post TECs and non-encumbered Operating Expense (OE) charges to the fiscal year in which they were incurred. • This process will help avoid audit findings related to charges being posted to the incorrect fiscal year or federal award number. Estimated Implementation Date: March 31, 2026 Contact: Chief, Division of Research, Innovation and System Information

View Audit 377562

Finding 1166576 (2024-020)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Procurement, Suspension & Debarment § 200.303

The Cal OES Recovery Financial Administration Branch (FAB), which oversees Public Assistance funds, has revised its existing FFATA reporting procedures and has taken several actions to strengthen internal controls, resolve discrepancies among reporting systems, and ensure staff are fully trained to ...

The Cal OES Recovery Financial Administration Branch (FAB), which oversees Public Assistance funds, has revised its existing FFATA reporting procedures and has taken several actions to strengthen internal controls, resolve discrepancies among reporting systems, and ensure staff are fully trained to maintain compliance with all FFATA reporting requirements. In March of 2025, the Cal OES FAB developed the FAB FFATA SOP (attachment #2) for FFATA reporting which outlines steps for collecting subrecipient data, preparing reports, and submitting reports within the required time frames. In addition, the Cal OES FAB enhanced their existing FFATA reporting procedures using Salesforce to provide accurate data reports for federally funded grant projects. These reports are then used to ensure accurate reporting and timely updates to existing FFATA records. Furthermore, in July of 2025, Cal OES FAB was provided a comprehensive FFATA training course to ensure staff understand the process and reporting requirements for FFATA. The Recovery FAB analysts are responsible for submitting FFATA reporting and ensuring that all required fields are completed accurately. FFATA reporting is performed by Cal OES FAB analysts and is reviewed and approved by their respective peer reviewers and manager to verify accuracy and complete reporting. Estimated Implementation Date: Implemented Contact: • Heidi Palchik, Chief • Recovery Financial Administration Branch lnteragency Recovery Coordination Section Recovery • California Governor's Office of Emergency Services

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Finding 1166572 (2024-018)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring § 200.303 § 200.332

• In collaboration with the Watershed Restoration Grants Branch (WRGB), the Budget Branch, Federal Assistance Section (FAS) will revise the Subrecipient Risk Assessment (DFW 870) to capture all elements required by 2 CFR §200.332, including identifying which subrecipients are subject to Single Audit...

• In collaboration with the Watershed Restoration Grants Branch (WRGB), the Budget Branch, Federal Assistance Section (FAS) will revise the Subrecipient Risk Assessment (DFW 870) to capture all elements required by 2 CFR §200.332, including identifying which subrecipients are subject to Single Audit requirements, obtaining and reviewing their audit reports on an annual basis, documenting verification of compliance, and ensuring timely follow-up on any corrective actions related to audit findings, as well as identifying the Assistance Listing Number and whether the award is Research and Development. • In collaboration with WRGB, FAS will create a new form to document the annual follow-up, the Subrecipient Risk Assessment (DFW 870A) to capture all elements required by 2 CFR §200.332, obtaining and reviewing their audit reports on an annual basis, documenting verification of compliance, and ensuring timely follow-up on any corrective actions related to audit findings, as well as identifying the Assistance Listing Number and whether the award is Research and Development. • FAS will establish an annual process to issue a Budget Branch memorandum to Department staff notifying them of the requirements of the DFW 870 and the DFW 870A, along with the requirements to complete the applicable forms in order for FAS to approve the use of federal funds to fund the subrecipient agreements. Estimated Implementation Date: March 31, 2026 Contact: • Nicole Nelson, Branch Chief, Budget Branch • Matt Wells, Branch Chief, Watershed Restoration Grants Branch

View Audit 377562

Finding 1166571 (2024-017)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring § 200.303 § 200.332 § 200.513 § 200.521

The Program Quality Improvement Branch (PQIB) has resolved the risk assessment application finding. Risk assessment criteria is applied and documented on all agencies annually. Documentation of the applied risk assessment is in the caseload spreadsheet. The Continuous Improvement Plan (CIP) process ...

The Program Quality Improvement Branch (PQIB) has resolved the risk assessment application finding. Risk assessment criteria is applied and documented on all agencies annually. Documentation of the applied risk assessment is in the caseload spreadsheet. The Continuous Improvement Plan (CIP) process was implemented in FY 24-25. The updated procedures have been applied for tracking. The process ensures reports are received for all programs requiring follow-up from outstanding findings identified during Contract Monitoring. FY 25-26 will be the first full year of implementation of this practice and the PQIB will conduct internal monitoring to ensure procedures are followed. A spreadsheet tracks all areas of the monitoring tool that require follow up. Additionally, the CDSS has fully adopted a process for audit report monitoring responsibilities of Local Education Agencies (LEA) and certain non-LEAs receiving Child Care and Development Fund (CCDF) Cluster program funds. This process applies to monitoring of FY24-25 audit reports and includes notifying contractors and certified public accountant (CPA) firms that the CDSS must be reported as the pass-through entity for the CCDF cluster on the Schedule of Expenditures of Federal Awards (SEFA) in single audit reports. When the CDSS audit monitoring discovers the CDE as the pass-through entity on SEFA, the CDSS will directly request the CPA to revise the SEFA. Estimated Implementation Date: Fully Corrected. Contact: • Jeff Fowler, Child Care Administration Bureau Chief • Central Operations Branch • Child Care and Development Division • California Department of Social Services

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Finding 1166569 (2024-016)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Allowable Costs / Cost Principles Reporting § 200.303

The Child Care and Development Division is working towards compliance with federal requirements for license-exempt health and safety monitoring with an anticipated completion date of July 1, 2029, assuming additional resources are secured. This plan has been outlined in Appendix A of the Federal Fis...

The Child Care and Development Division is working towards compliance with federal requirements for license-exempt health and safety monitoring with an anticipated completion date of July 1, 2029, assuming additional resources are secured. This plan has been outlined in Appendix A of the Federal Fiscal Year 2025-27 State Plan for California with Administration of Children and Families (State Plan). The State Plan can be provided upon request. Estimated Implementation Date: July 1, 2029 Contact: • Jeff Fowler, Child Care Administration Bureau Chief • Central Operations Branch • Child Care and Development Division • California Department of Social Services

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Finding 1166567 (2024-015)

Material Weakness 2024

State of California

CA

Reporting Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking § 200.303

The difference in reporting deadlines between the ACF-696 and SEFA reports will consistently result in a known discrepancy. To address this, as of September 2025, CDSS started conducting year-end reconciliations between the two reports to validate and confirm these discrepancies. Estimated Implement...

The difference in reporting deadlines between the ACF-696 and SEFA reports will consistently result in a known discrepancy. To address this, as of September 2025, CDSS started conducting year-end reconciliations between the two reports to validate and confirm these discrepancies. Estimated Implementation Date: March 2026 Contact: • Daniel During, Federal Reporting Section Chief • Accounting and Fiscal Systems Branch • Finance and Accounting Division • California Department of Social Services

View Audit 377562

Finding 1166565 (2024-014)

Material Weakness 2024

State of California

CA

Procurement, Suspension & Debarment Subrecipient Monitoring Allowable Costs / Cost Principles § 200.303

To ensure timely reporting, the Federal Reporting Section (FRS) has ensured that all staff understand the final deadline and all key milestones along the way. The FRS has broken down the report into smaller, manageable tasks within individual deadlines which help avoid last-minute rushes and ensure ...

To ensure timely reporting, the Federal Reporting Section (FRS) has ensured that all staff understand the final deadline and all key milestones along the way. The FRS has broken down the report into smaller, manageable tasks within individual deadlines which help avoid last-minute rushes and ensure steady progress. The FRS conducts regular check-ins to discuss progress, address any challenges early, and adjust the plan as needed to prevent delays. Estimated Implementation Date: Implemented in November 2024. Contact: • Daniel During, Federal Reporting Section Chief • Accounting and Fiscal Systems Branch • Finance and Accounting Division • California Department of Social Services

View Audit 377562

Finding 1166563 (2024-013)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Procurement, Suspension & Debarment § 200.303

The corrective action has already been implemented. This includes CDA hiring an employee in April 2024 to fulfill the FFATA duties, and CDA has now been able to keep current on FFATA reporting. The staff member has created FFATA procedures and caught up on the late FFATA reporting. Estimated Impleme...

The corrective action has already been implemented. This includes CDA hiring an employee in April 2024 to fulfill the FFATA duties, and CDA has now been able to keep current on FFATA reporting. The staff member has created FFATA procedures and caught up on the late FFATA reporting. Estimated Implementation Date: Currently implemented. Contact: Kim Elliot

View Audit 377562

Finding 1166558 (2024-012)

Material Weakness 2024

State of California

CA

Internal Control / Segregation of Duties Eligibility Special Tests & Provisions § 200.303

CHCQ will address the audit findings by increasing outreach to local District Office management and by providing ongoing oversight to frontline staff. CHCQ will emphasize the importance of completing CMS 1539 forms with proper documentation and signatures for all recertification surveys, including s...

CHCQ will address the audit findings by increasing outreach to local District Office management and by providing ongoing oversight to frontline staff. CHCQ will emphasize the importance of completing CMS 1539 forms with proper documentation and signatures for all recertification surveys, including surveys conducted by Accrediting Organizations. CHCQ has already taken steps by reiterating this requirement at a recent statewide management meeting. CHCQ will continue reminding staff of expectations at appropriate meetings and provide additional training as needed to ensure all offices follow consistent procedures when completing the required CMS 1539 forms. Headquarters management will provide oversight and conduct periodic audits to ensure staff complete and sign all CMS 1539 forms according to expectations. Estimated Implementation Date: Fiscal Year 2025-26 Contact: Nate Gilmore, State Surveyors Branch Chief, CHCQ

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Finding 1166553 (2024-011)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Eligibility Internal Control / Segregation of Duties § 200.303

Effective June 1, 2024, DHCS reinstated county performance standards and reintroduced Focused Reviews. As outlined in All County Welfare Directors Letter (ACWDL) 24-17—Enhancing County Medi-Cal Eligibility Performance, DHCS will resume monitoring county performance and timeliness standards. County p...

Effective June 1, 2024, DHCS reinstated county performance standards and reintroduced Focused Reviews. As outlined in All County Welfare Directors Letter (ACWDL) 24-17—Enhancing County Medi-Cal Eligibility Performance, DHCS will resume monitoring county performance and timeliness standards. County performance standards measure the timeliness of county actions, while Focused Reviews evaluate both timeliness and accuracy of county determinations related to Medi-Cal applications, redeterminations, and Medi-Cal Eligibility Data System (MEDS) Alert processing. All counties will participate in a Focused Review on a biennial, rotating basis. Through the reinstatement of county performance standards and Focused Reviews, DHCS can identify and address eligibility concerns, such as the proper use of aid codes, and work with counties through the corrective action plan process to address staff training to ensure correct eligibility determinations for all Medi-Cal programs, including pregnancy programs. Estimated Implementation Date: Fully Implemented Contact: Sarah Crow, Medi-Cal Eligibility Division, Division Chief Harold Higgins, Medi-Cal Eligibility Division, Branch Chief Amy Halim, Medi-Cal Eligibility Division, Section Chief

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Finding 1166548 (2024-010)

Material Weakness 2024

State of California

CA

Eligibility Internal Control / Segregation of Duties § 200.303

Effective June 1, 2024, DHCS reinstated county performance standards and reintroduced Focused Reviews. As outlined in All County Welfare Directors Letter (ACWDL) 24-17—Enhancing County Medi-Cal Eligibility Performance. DHCS has resumed monitoring county performance and timeliness standards. County p...

Effective June 1, 2024, DHCS reinstated county performance standards and reintroduced Focused Reviews. As outlined in All County Welfare Directors Letter (ACWDL) 24-17—Enhancing County Medi-Cal Eligibility Performance. DHCS has resumed monitoring county performance and timeliness standards. County performance standards measure the timeliness of county actions, while Focused Reviews evaluate both timeliness and accuracy of county determinations related to Medi-Cal applications, redeterminations, and Medi-Cal Eligibility Data System (MEDS) Alert processing. All counties will participate in a Focused Review on a biennial, rotating basis. Additionally, DHCS resumed the Aid Code Cleanup effort in September 2025, as outlined in MEDIL I 25-19. The purpose of the aid code cleanup effort is to assist counties in identifying records that require eligibility re-evaluation to either transition individuals to the correct Medi-Cal aid code or appropriately discontinue coverage. Through these initiatives, DHCS can identify and address eligibility concerns, such as processing timeliness and proper aid code usage. Estimated Implementation Date: Fully Implemented Contact: Sarah Crow, Medi-Cal Eligibility Division, Division Chief Harold Higgins, Medi-Cal Eligibility Division, Branch Chief Amy Halim, Medi-Cal Eligibility Division, Section Chief

View Audit 377562

Finding 1166546 (2024-009)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Procurement, Suspension & Debarment § 200.1 § 200.303 § 200.332 § 200.414

In response to the previous audit finding, CDPH submitted the required risk assessment as of January 2025, along with supporting documentation. Moving forward, CDPH will establish formal procedures to ensure that all required federal award information – such as the Assistance Listings Number, Title,...

In response to the previous audit finding, CDPH submitted the required risk assessment as of January 2025, along with supporting documentation. Moving forward, CDPH will establish formal procedures to ensure that all required federal award information – such as the Assistance Listings Number, Title, and FAIN – is clearly identified in all agreements with subrecipients. Estimated Implementation Date: March 2026 Contact: • Melissa Relles • Assistant Deputy Director • Center for Preparedness and Response

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Finding 1166545 (2024-008)

Material Weakness 2024

State of California

CA

Procurement, Suspension & Debarment § 200.303

CDPH is reviewing its existing procedures for verifying the suspension and debarment status of vendors prior to entering into any agreements involving federal funds. CDPH will enhance these procedures as necessary to ensure full compliance. Estimated Implementation Date: March 2026 Contact: • Meliss...

CDPH is reviewing its existing procedures for verifying the suspension and debarment status of vendors prior to entering into any agreements involving federal funds. CDPH will enhance these procedures as necessary to ensure full compliance. Estimated Implementation Date: March 2026 Contact: • Melissa Relles • Assistant Deputy Director • Center for Preparedness and Response

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Finding 1166544 (2024-007)

Material Weakness 2024

State of California

CA

Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.303

SWRCB Program Manager acknowledges and understands the recommendation. During the December 2023 period, the SWRCB Program Manager held a meeting with staff and reviewed the information prior to approving the information being inputted into the CDOF Portal. Information being submitted to the CDOF Por...

SWRCB Program Manager acknowledges and understands the recommendation. During the December 2023 period, the SWRCB Program Manager held a meeting with staff and reviewed the information prior to approving the information being inputted into the CDOF Portal. Information being submitted to the CDOF Portal aligns with the FI$Cal KK Report per the direction of CDOF. For information provided by the SWRCB for the CDOF Quarterly Reporting, the SWRCB started formally documenting the approval of information starting the quarter after the December 2023 period. Corrective action plan: SWRCB Program Manager has implemented a process for the recommendation provided. As of the quarter following December 2023 period, a formal process that documents the information and approval of that information for CDOF portal updates is being used. The information submitted to the CDOF Portal aligns with the FI$Cal KK Report per the direction of CDOF. Estimated Implementation Date: March 2024 Contact: Selica Potter

View Audit 377562

Finding 1166543 (2024-006)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Reporting § 200.303 § 200.332

On November 25, 2025, it was brought to the attention of DLA that significantly more Assistance Listing Numbers (ALNs) have been created to correlate to specific programs awarded by FHWA. While the Caltrans Division of Local Assistance does not have the capacity to electronically identify the ALNs, ...

On November 25, 2025, it was brought to the attention of DLA that significantly more Assistance Listing Numbers (ALNs) have been created to correlate to specific programs awarded by FHWA. While the Caltrans Division of Local Assistance does not have the capacity to electronically identify the ALNs, the Caltrans Office of Federal Resources (OFR) owns the database that DLA uses to process federal requests for authorizations. By January 31, 2026, DLA and OFR will meet with FHWA to determine how they may transmit the ALN into Caltrans’ database. By June 30, 2026, the DLA will determine how to upload the data into the program supplement agreement or finance letter, which will be transmitted to subrecipients. Estimated Implementation Date: 6/30/2026 Contact: Dee Lam, Division of Local Assistance

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Finding 1166541 (2024-005)

Material Weakness 2024

State of California

CA

Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.303

The HQ Budgets OFR will update FPFT guidance and development documentation to include specific references to a new required secondary data validation for the more complex funding scenarios. A set of core FPFT standard templates will be modified to include an automated requirement for secondary data ...

The HQ Budgets OFR will update FPFT guidance and development documentation to include specific references to a new required secondary data validation for the more complex funding scenarios. A set of core FPFT standard templates will be modified to include an automated requirement for secondary data validation for any project that includes complex funding scenarios, including cooperative agreements, multiple funding priorities, multiple federal program codes, multiple state funding programs, and funding earmarks. Calculated data cells for federal reimbursement ratios will be added, as well as an automated check for the total sum of funding line percentages to ensure any rounding errors are eliminated. Consistent training will be provided for key HQ Budgets OFR staff on a regular basis, including live sessions for practical FPFT case reviews and FPFT development during monthly team meetings. Estimated Implementation Date: • Updated FPFT guidance documentation: 11/25/2025 • Updated FPFT template (automated secondary validation): 12/01/2025 • Monthly live training sessions (1st Thursday each month): 12/04/2025 Contact: • Raul Lerma, Chief, Program and Project Management Branch, Office of Federal Resources, HQ Division of Budgets • Keith Duncan, Division Chief, HQ Division of Budgets

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Finding 1166539 (2024-004)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Allowable Costs / Cost Principles Eligibility § 200.303

The EDD has policies, procedures, and training in place instructing employees to include applicable penalty amounts when establishing overpayments in the database. When the overpayment for the sample in question was established, the employee did not follow the proper procedure to include the penalty...

The EDD has policies, procedures, and training in place instructing employees to include applicable penalty amounts when establishing overpayments in the database. When the overpayment for the sample in question was established, the employee did not follow the proper procedure to include the penalty. EDD accepts this oversight and is committed to reviewing its applicable policies and procedures to ensure they are clear, and the penalty requirements are emphasized. Regarding internal controls, EDD leverages a process known as the Field Office Basic Evaluation System (FOBES). This process includes a standardized form that is utilized by leadership to evaluate the quality of their employees’ work on a variety of processes, including overpayment processing. EDD continues to review and modernize the existing assessment form and FOBES process to ensure effectiveness and consistency while evaluating employee compliance with policies and procedures Estimated Implementation Date: Currently Implemented Contact: Diane Underwood, Division Chief, Unemployment Insurance Branch, California Employment Development Department

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Finding 1166537 (2024-003)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Reporting Allowable Costs / Cost Principles § 200.303

Recognizing that the finding does not include any questioned costs, EDD agrees with the recommendation as it relates to the need for a formal reconciliation process between the U.S. DOL (DOL) ETA Financial Report, form ETA-9130 (ETA-9130) and the general ledger. EDD will take steps to formally docum...

Recognizing that the finding does not include any questioned costs, EDD agrees with the recommendation as it relates to the need for a formal reconciliation process between the U.S. DOL (DOL) ETA Financial Report, form ETA-9130 (ETA-9130) and the general ledger. EDD will take steps to formally document the process, including roles and responsibilities, a more regular reconciliation schedule and a plan to resolve variances with documented approvals. Also, as recommended, updates will be made to financial reporting procedures and staff that are part of this process will receive training. Estimated Implementation Date: June 2026 Contact: Diane Underwood, Division Chief, Unemployment Insurance Branch, California Employment Development Department

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Finding 1166535 (2024-002)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Procurement, Suspension & Debarment § 200.303

Cal OES agrees with CLA's recommendation. Cal OES Grants Management which oversees Crime Victim Assistance funds has revised its existing FFATA reporting procedures and has taken several actions to strengthen internal controls and ensure staff are fully trained to maintain compliance with all FFATA ...

Cal OES agrees with CLA's recommendation. Cal OES Grants Management which oversees Crime Victim Assistance funds has revised its existing FFATA reporting procedures and has taken several actions to strengthen internal controls and ensure staff are fully trained to maintain compliance with all FFATA reporting requirements. In March of 2025, Cal OES Grants Management centralized FFATA reporting responsibilities and are currently under the purview of the Grants Management Support (GMS) Unit. Cal OES Grants Management also implemented the Grants Centralized System (GCS) which automates the grant application process and assists in generating required FFATA data effective Fiscal Year 2024-2025. In addition, in March of 2025, the Cal OES GMS Unit was provided a comprehensive FFATA training course to ensure staff understand the federal reporting requirements and provided the updated FFATA Reporting Guide Standard Operating Procedure (SOP) (attachment #1). The FFATA Reporting Guide SOP outlines steps for collecting subrecipient data, preparing reports, and submitting reports within the required time frames. Furthermore, FFATA reporting is now performed by Cal OES GMS Unit analysts and is reviewed and approved by their respective unit leads and manager to verify accuracy and complete reporting. Estimated Implementation Date: Implemented Contact: • Negin Sabbaghian, Chief • Grants Processing Division • Compliance Processing Section • Grants Management • California Governor's Office of Emergency Services

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Finding 1166020 (2024-006)

Material Weakness 2024

ELDRED BOROUGH WATER AUTHORITY

NY

Internal Control / Segregation of Duties Reporting § 200.303

Segregation of Duties - Auditor’s Recommendations: We recommend that the Authority assess the current structure and implement compensating controls where full segregation of duties is not feasible due to staffing limitations. These may include enhanced supervisory review, periodic oversight by the b...

Segregation of Duties - Auditor’s Recommendations: We recommend that the Authority assess the current structure and implement compensating controls where full segregation of duties is not feasible due to staffing limitations. These may include enhanced supervisory review, periodic oversight by the board or executive leadership, documentation of independent reviews, and rotation of duties when possible. Authority’s Response: The board reviews the reports monthly. A printed payroll report and checks written from meeting to meeting are provided and are approved and initialed. Also provided is a report of the bank statements for the board to review what has been received and what has been paid. Before any bills are paid they are approved at the meeting. If an error is made when inputting a deposit received into C/A, the correction is printed and initialed approving the correction.

View Audit 376845

Finding 1165618 (2024-244)

Material Weakness 2024

State of Idaho

ID

Reporting Internal Control / Segregation of Duties § 200.303 § 200.510

Finding 2024-244: The Department’s original Schedule of Expenditures of Federal Awards submitted to the Office of the State Controller underreported the amount disbursed to subrecipients by $3,500,000 under the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) program. Related to Prior Findi...

Finding 2024-244: The Department’s original Schedule of Expenditures of Federal Awards submitted to the Office of the State Controller underreported the amount disbursed to subrecipients by $3,500,000 under the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) program. Related to Prior Finding: N/A Agency’s view: Agree Corrective Action Plan: The Department will improve training and the review process for the SEFA closing package to ensure appropriate reporting of subrecipient expenditures on the SEFA. The Department will review the FY 2025 SEFA closing package that was submitted to the Office of the State Controller to ensure the appropriate subrecipient expenditures were reported. Anticipated Corrective Action Date: November 30, 2025 Responsible for Corrective Action: Sascha Marston Financial Officer (208) 287-4819 Sascha.marston@idwr.idaho.gov

View Audit 376229

Finding 1165617 (2024-243)

Material Weakness 2024

State of Idaho

ID

Allowable Costs / Cost Principles § 200.303 § 200.403

Finding 2024-243: The Division did not properly evaluate costs related to the Rehabilitation Services- Vocational Rehabilitation Grants to States and direct costs were incorrectly recorded as indirect costs for the grant. Related to Prior Finding: N/A Agency’s view: Agree 7.1 Corrective Action Plan:...

Finding 2024-243: The Division did not properly evaluate costs related to the Rehabilitation Services- Vocational Rehabilitation Grants to States and direct costs were incorrectly recorded as indirect costs for the grant. Related to Prior Finding: N/A Agency’s view: Agree 7.1 Corrective Action Plan: Establish and Document Clear Cost Classification Procedures: Develop written procedures defining and distinguishing between direct and indirect costs. 7.2 Strengthen Internal Controls Over Cost Allocation: Implement review and approval controls to verify proper cost classification before posting transactions to Luma or inclusion in the indirect cost pool. 7.3 Enhance Staff Training and Knowledge: Provide targeted training for fiscal staff to ensure understanding of allowable cost principles and consistent application of cost classification policies. 7.4 Ensure Documentation Retention and Review: Maintain complete documentation supporting all cost allocations, including approval records, cost pool calculations, and reconciliations. 7.5 Perform Regular Monitoring and Verification: Conduct periodic reviews of both direct and indirect cost transactions to confirm classification accuracy and identify any required adjustments. Anticipated Corrective Action Date: 04/01/2026 Responsible for Corrective Action: Eric Bjork, Fiscal Officer

View Audit 376229

Finding 1165616 (2024-242)

Material Weakness 2024

State of Idaho

ID

Reporting Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.303 § 200.510

Finding 2024-242: The Division did not accurately report federal grant expenditures on the Schedule of Expenditures of Federal Awards (SEFA) Closing Package. Related to Prior Finding: N/A Agency’s view: Agree 6.1 Corrective Action Plan: Develop and Implement Written SEFA Procedures: Create formal wr...

Finding 2024-242: The Division did not accurately report federal grant expenditures on the Schedule of Expenditures of Federal Awards (SEFA) Closing Package. Related to Prior Finding: N/A Agency’s view: Agree 6.1 Corrective Action Plan: Develop and Implement Written SEFA Procedures: Create formal written procedures describing how SEFA amounts are compiled, reconciled, reviewed, and approved prior to submission within Grants Management Manual. 6.2 Strengthen Internal Controls and Oversight: Implement internal review and approval steps that require documented verification of SEFA amounts against Luma accounting records. 6.3 Ensure Accurate Grant Coding: Review and correct all federal grant fund transactions not assigned to specific grants, ensuring proper coding and allocation in Luma. 6.4 Training and Staff Development: Provide training to fiscal staff on SEFA preparation, reconciliation, and documentation requirements. 6.5 Establish Continuous Monitoring: Perform periodic reviews of federal expenditure coding and SEFA data to identify discrepancies before year-end reporting. Anticipated Corrective Action Date: 04/01/2026 Responsible for Corrective Action: Eric Bjork, Fiscal Officer

View Audit 376229

Finding 1165615 (2024-241)

Material Weakness 2024

State of Idaho

ID

Procurement, Suspension & Debarment Subrecipient Monitoring § 200.303

Finding 2024-241: The Division did not verify that vendors receiving payments from the Rehabilitation Services – Vocational Rehabilitation Grants to States program, were not suspended or debarred prior to making federal grant payments. Related to Prior Finding: N/A Agency’s view: Agree 5.1 Correctiv...

Finding 2024-241: The Division did not verify that vendors receiving payments from the Rehabilitation Services – Vocational Rehabilitation Grants to States program, were not suspended or debarred prior to making federal grant payments. Related to Prior Finding: N/A Agency’s view: Agree 5.1 Corrective Action Plan: Policy Development and Alignment: Revise the Division’s procurement and grant management procedures to include mandatory ongoing verification and documentation of suspension and debarment status for all vendors involved in covered transactions. 5.2 Systematic Verification Process: Implement a standardized process to verify vendor eligibility by: 5.2.1 Checking the System for Award Management (SAM.gov) exclusion list. 5.2.2 Retaining a copy of the verification record or certification in the procurement or vendor file. 5.2.3 Incorporating a suspension/debarment verification clause into agreements, contracts, authorizations for purchase, and purchase orders. 5.3 Ongoing Monitoring: Establish a control to periodically re-verify vendor status at least annually to identify changes in eligibility after the initial onboarding. 5.4 Training and Accountability: Provide training to all fiscal staff on: 5.4.1 Federal suspension and debarment requirements. 5.4.2 Verification methods and documentation expectations. 5.4.3 Proper retention of evidence. 5.4.4 Compliance Reviews: Implement periodic internal compliance reviews to ensure continued adherence to suspension and debarment verification requirements. Anticipated Corrective Action Date: 04/01/2026 Responsible for Corrective Action: Eric Bjork, Fiscal Officer

View Audit 376229

Finding 1165614 (2024-240)

Material Weakness 2024

State of Idaho

ID

Procurement, Suspension & Debarment § 200.303 § 200.317

Finding 2024-240: The Division is not following Idaho Administrative Rules for Purchasing as required by federal requirements. Related to Prior Finding: N/A Agency’s view: Agree 4.1 Corrective Action Plan: Policy Alignment: Review and revise internal procurement policies and procedures to align with...

Finding 2024-240: The Division is not following Idaho Administrative Rules for Purchasing as required by federal requirements. Related to Prior Finding: N/A Agency’s view: Agree 4.1 Corrective Action Plan: Policy Alignment: Review and revise internal procurement policies and procedures to align with IDAPA 38.05.01, 2 CFR 200.317, and 2 CFR 200.303 requirements. 4.2 Training and Awareness: Provide training to all staff to ensure understanding of: 4.2.1 Purchasing thresholds and categories (small, informal, and formal purchases). 4.2.2 Documentation and approval requirements. 4.2.3 Process and documentation requirements for purchases requiring exemptions. 4.3 Internal Control Strengthening: Develop and implement internal control mechanisms to ensure compliance with State and Federal purchasing requirements. 4.4 Monitoring and Accountability: Establish a quality assurance and compliance monitoring process to perform monitoring of procurement transactions to verify compliance with Division policies and procedures. Anticipated Corrective Action Date: 06/30/2026 Responsible for Corrective Action: Contracts and Vendor Relations Officer, To be Hired Position Oversight: MiKayla Monaghan, Internal Operations and Stakeholder Relations Manager

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