Corrective Action Plans

Finding 551082 (2024-003)

Material Weakness 2024

Housing Authority of the Township of North Bergen

NJ

Questioned Costs HUD Housing Programs Eligibility

Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Public and Indian Housing and Section 8 Housing Choice Vouchers Programs to ensure that established internal control policies are bein...

Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Public and Indian Housing and Section 8 Housing Choice Vouchers Programs to ensure that established internal control policies are being followed on a timely basis. Julio Marenco, Interim Executive Director, will be responsible to implement this corrective action by June 30, 2025.

View Audit 352015 Questioned Costs: $1

Finding 551081 (2024-002)

Significant Deficiency 2024

Housing Authority of the Township of North Bergen

NJ

Questioned Costs Allowable Costs / Cost Principles HUD Housing Programs § 200.423 § 200.438 § 200.459 § 200.475

View of Responsible Officials and Corrective Actions: The Authority has recognized the deficiencies related to payroll and will implement internal control procedures that will ensure compliance with the Authority's internal control policies and personnel policy. Julio Marenco, Interim Executive Dire...

View of Responsible Officials and Corrective Actions: The Authority has recognized the deficiencies related to payroll and will implement internal control procedures that will ensure compliance with the Authority's internal control policies and personnel policy. Julio Marenco, Interim Executive Director, will be responsible to implement this corrective action by June 30, 2025.

View Audit 352015 Questioned Costs: $1

Finding 551074 (2024-003)

None 2024

Mountain Area Regional Transit Authority

CA

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

Identifying Number: SA 2024-003 Description of Finding: During the audit of payroll expense testing, it was noted that five samples have Personnel Action Forms (PAF) without the signature of the General Manager. In addition, one of those five samples has a variance between the pay rate per PAF and p...

Identifying Number: SA 2024-003 Description of Finding: During the audit of payroll expense testing, it was noted that five samples have Personnel Action Forms (PAF) without the signature of the General Manager. In addition, one of those five samples has a variance between the pay rate per PAF and pay rate per payroll register. Per current policies and procedures, for pay rate changes, a PAF should be created by the HR Manager and signed by the General Manager. Additionally, MARTA was unable to provide PAF for four samples. Corrective Actions Taken or Planned: 1. We will review our procedures on processing PAF, communicate more effectively to close loop on paperwork process, and confirm authorized signatures. 2. We will review all files for completed PAF forms and practice better diligence going forward in maintaining all documentation in personnel files. Personnel responsible for implementation: Jacob Phillips, HR Manager Anticipated completion date: Effective immediately

View Audit 352013

Finding 551073 (2024-002)

None 2024

Mountain Area Regional Transit Authority

CA

Procurement, Suspension & Debarment § 200.317 § 200.318 § 200.320 § 200.323 § 200.326

Identifying Number: SA 2024-002 Description of Finding: During the audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, "Purchases of supplies, services, and equipment costing more than five hundred ($500) ...

Identifying Number: SA 2024-002 Description of Finding: During the audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, "Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval". During the audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024. During the audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred were performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024. Corrective Actions Taken or Planned: We are in the process of updating our Procurement Policy. We will ensure that we follow these updated policies and procedures to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes. The updated Procurement Policy will be brought to our October 2025 Board of Directors meeting for Board review or approval. Personnel responsible for implementation: Sean Gillingham, Finance Manager Anticipated completion date: October 2025

View Audit 352013

Finding 551072 (2024-001)

None 2024

Mountain Area Regional Transit Authority

CA

Procurement, Suspension & Debarment Equipment & Real Property Management § 200.302 § 200.303 § 200.305 § 200.313 § 200.318

Identifying Number: SA 2024-001 Description of Finding: MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance: Equipment and Real Property Management MARTA has an Asset Inventory Policy and Procedure...

Identifying Number: SA 2024-001 Description of Finding: MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance: Equipment and Real Property Management MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e). Cash Management MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. Procurement, Suspension and Debarment MARTA has a Procurement policy, however, documented procedures are not well- defined regarding the purchase process for different types of procurement, obtaining quotations, bidding, and procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Corrective Actions Taken or Planned: We have an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked. We also have Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing resources available. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets. We are in the process of updating our Procurement Policy. We will review and update these policies and/or create new policies to make sure we are compliant with the Uniform Guidance. The updated or newly created policies will be brought to our October 2025 Board of Directors meeting for Board review or approval. Personnel responsible for implementation: Sean Gillingham, Finance Manager Anticipated completion date: October 2025

View Audit 352013

Finding 549905 (2024-018)

Significant Deficiency 2024

State of Utah

UT

Subrecipient Monitoring Allowable Costs / Cost Principles Significant Deficiency § 200.302 § 200.430

2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance State Agency: Utah State University Research & Development Federal Agency: Various 1) Potential Financial Impact USU retained Huron Higher Education Consulting to conduct a Uniform Guidance compliance r...

2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance State Agency: Utah State University Research & Development Federal Agency: Various 1) Potential Financial Impact USU retained Huron Higher Education Consulting to conduct a Uniform Guidance compliance review of compensation costs charged to federal sponsors. Huron Consulting routinely works with Carnegie R1 institutions to review research compliance issues. Huron conducted a detailed review of an extensive data set for ESC payments made to USU employees, focusing on employees who had salary charged to federal grants or designated as a grant cost share. This review identified limited instances (1) when salaries directly charged to sponsored projects included extra service compensation in the institutional base salary and (2) when extra service compensation was charged to federal sponsors. Overall, the review found that the vast majority of USU ESC payments (referred to as secondary payments in the internal audit) were not charged to federal sponsored awards. Out of a total population of $5.8 million ESC payments reviewed, the unallowed compensation costs related to ESC is approximately $140,000. USU is in the process of addressing the unallowable compensation costs by removing unallowable charges on open awards and refunding unallowable charges on closed awards. 2) Policies and required documentation for ESC. ESC Policies: USU is reviewing its policies associated with ESC and institutional base salary (IBS) (both currently defined in USU Policy 376: Extra Service Compensation). A working group has been established that includes the Provost’s Office, the President’s Office, the Office of Research and Human Resources to develop updated procedures for requesting ESC. Once in place, a new Extra Service Compensation website will be rolled out that will provide guidance on the policy, acceptable uses of extra-service Compensation, and training materials. In conjunction with the website development, a communication plan to inform stakeholders, especially approving department heads and administrators, will be developed. Institutional Base Salary Policy and Procedures: USU will create and implement an Institutional Base Salary policy that aligns with federal requirements and industry best practices and specifically defines salary components and the associated pay codes that are included and excluded from an employee’s institutional base salary. USU will also update its time and effort certification system with correct institutional base salary mapping. 3) Internal controls for sponsored program compensation USU will implement the following improvements in its internal controls: Revised ESC Form. USU has revised its ESC Form to include documentation / calculation demonstrating payment is commensurate with institutional base salary. Revised ESC Application and Approval Process: USU has already updated the internal ESC review process to include appropriate controls to ensure that all ESC requests are reviewed for Uniform Guidance and USU policy requirements. In this regard, all ESC requests at USU are now reviewed by the Office of Sponsored Programs in the context of all funding sources associated with the applicant (including cost share indexes). This change directly addresses prior routing based on the source of funding which resulted in the Office of Research/Sponsored Programs being bypassed for state-funded ESC requests. Certification language has been inserted at appropriate approval levels to ensure that employees are not receiving ESC related to their primary position/workload. Improved Definitions of Primary Work Statement: USU has initiated a collaborative effort between Human Resources, the Provost’s Office, and the Office of Research to clearly define the primary work assignment for faculty via the role statement or annual work plans to clarify the full workload associated with the IBS. Increased Compliance Monitoring: After-the-fact monthly review of ESC payments is being collaboratively performed between the Office of Research and Provost’s Office. Additionally, USU has reorganized its operations to house post-award research administrators within the Office of Research and added an additional supervisory position to manage post award compliance and management. USU will charge central-post award research administrators with monitoring salary charges to sponsored awards and cost share accounts as a secondary internal control. Research Incentive Programs: The Office of Research will establish permissible conditions and components for research incentive programs and any and all proposed programs will be reviewed and approved by the Office of Research before implementation. 4) Adequate training to university personnel regarding sponsored programs compensation compliance. Uniform Guidance training for faculty and staff: USU is building and incorporating new training modules for those managing federal awards which will include guidance on allowable compensation costs and determining institutional base salary. ESC Training: USU has developed a new required annual training for anyone requesting or approving ESC from all types of funding sources at USU (delivered via USU’s Learn Blue system). This training addresses requirements for ESC and employees’ role and responsibilities for compliance requirements. Additional training regarding time and effort certification will be developed. Pay Code Training: USU will provide additional training and education for departmental and payroll staff responsible for coding and processing salary across the institution. Responsible Person: Lisa M. Berreau Vice President for Research Utah State University 435-797-3509 Anticipated completion date of corrective action plan: Actively in progress and full completion by Jan. 1, 2026.

View Audit 352012

Finding 548761 (2024-008)

Significant Deficiency 2024

State of Utah

UT

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

2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews State Agency: University of Utah Research & Development Federal Agency: Department of Health and Human Services The Controller’s Office will work directly with the identified PI’s to provide additional training and understanding of ...

2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews State Agency: University of Utah Research & Development Federal Agency: Department of Health and Human Services The Controller’s Office will work directly with the identified PI’s to provide additional training and understanding of the importance of appropriate and timely approvals. In addition, the Controller will work with the Office of Sponsored Projects and the Financial Reporting & Accounting office to review current training processes, as well as the process for notification and follow up with those AE’s/PI’s who do not meet the standard set forth in policy. Contact Person: Steven Phillips Anticipated Correction Date: 6/30/2025

View Audit 352012

Finding 548758 (2024-005)

Significant Deficiency 2024

State of Utah

UT

Subrecipient Monitoring Significant Deficiency

2024-005. Required Health and Safety Surveys Not Performed Within Statutory Timeline State Agency: Department of Health and Human Services Federal Agency: Department of Health and Human Services To address this finding (and prior year finding number 2023-008), the Division of Licensing and Backgroun...

2024-005. Required Health and Safety Surveys Not Performed Within Statutory Timeline State Agency: Department of Health and Human Services Federal Agency: Department of Health and Human Services To address this finding (and prior year finding number 2023-008), the Division of Licensing and Background Checks (DLBC), Office of Licensing (OL) took the following corrective action to achieve compliance with required survey time frames: • Increased Health Facility Licensing fees by 43% to facilitate the hiring of 4 additional staff for the 2025 state fiscal year. • Dedicated one-time funds for contracting with a third-party surveyor and hired two, time- limited positions to help address the Health and Safety survey backlog in fiscal year 2024 and 2025. • Continued to work with the DHHS Office of Innovation to review the health facility team’s processes to improve efficiencies. • Organized a separate complaint investigation unit in August 2024 to help expedite complaint and survey completion. The DBLC, OL will continue to follow through with these additional resources in order to achieve compliance with the required survey timelines. In addition, the OL plans to streamline the writing and reporting procedures while ensuring compliance with CMS guidance. The goal is to shorten the time required to write reports and therefore increase the number of surveys completed. Implementation Date: July 1, 2026 Contact: Courtney Webb, Financial Manager, Division of Finance & Administration, courtneywebb@utah.gov

View Audit 352012

Finding 548755 (2024-004)

Significant Deficiency 2024

State of Utah

UT

Eligibility Subrecipient Monitoring Cash Management

2024-004. Inadequate Procedures to Identify Healthcare Providers with Expired Licenses State Agency: Department of Health and Human Services Federal Agency: Department of Health and Human Services Out-of-state providers and the provider whose license expired during the PHE. During the PHE an expire...

2024-004. Inadequate Procedures to Identify Healthcare Providers with Expired Licenses State Agency: Department of Health and Human Services Federal Agency: Department of Health and Human Services Out-of-state providers and the provider whose license expired during the PHE. During the PHE an expired license report was not properly monitored. Prospectively, DHHS will ensure license expiration notifications are reviewed on a monthly basis. Additionally, DHHS will work with the PRISM contractor to explore pathways to identify all providers (out-of-state and in-state) whose licenses may have already expired. DHHS will follow the current license expiration process and close those providers as appropriate. Provider initially granted eligibility in the legacy system. In any future event involving data conversion, DHHS will ensure that all relevant data from the existing system is thoroughly collected and reviewed prior to the conversion process. This will help guarantee data integrity and minimize the risk of issues arising during the transition. Implementation Date: July 31, 2025 Contact: Shandi Adamson, Director, Office of Medicaid Operations, shandiadamson@utah.gov

View Audit 352012

Finding 548753 (2024-003)

Significant Deficiency 2024

State of Utah

UT

Subrecipient Monitoring HUD Housing Programs Reporting

2024-003. Incomplete Pharmacy Rebate Reporting and Invoicing State Agency: Department of Health and Human Services Federal Agency: Department of Health and Human Services Following the launch of the Medicaid Provider Reimbursement Information System for Medicaid (PRISM) in April 2023, not all pharma...

2024-003. Incomplete Pharmacy Rebate Reporting and Invoicing State Agency: Department of Health and Human Services Federal Agency: Department of Health and Human Services Following the launch of the Medicaid Provider Reimbursement Information System for Medicaid (PRISM) in April 2023, not all pharmacy files from managed care entities and JCODE drugs properly transmitted to the third-party organization’s system. The key pharmacy claims files that needed to interface with the third-party organization’s system have now been rebuilt and are undergoing interface testing. After testing, the historic and more current files will be put into production and be transmitted to the third-party organization. Following receipt, the third-party organization will invoice and collect the unbilled rebates. Once this interface issue is resolved, all future required drug utilization data as well as rebate invoices will be sent to manufacturers within the required time frame. All claims received will be invoiced 60 days after the end of the current quarter they are received in, per CMS's rule. DHHS informed CMS of this issue in August 2024. At that time, CMS said the state was out of compliance and inquired on timelines to come into compliance. The state will provide updates to CMS when the backlogged files have been successfully transmitted and manufacturers have been invoiced. According to the third-party pharmacy organization, manufacturers were notified about this issue when it was discovered in May 2023 and advised that when the issues with invoicing these rebates is resolved they will be expected to pay the balance due. Implementation Date: May 30, 2025 Contact: Sepideh Daeery, Pharmacy Director, Division of Integrated Healthcare, sepidehdaeery@utah.gov Anticipated Correction Date: June 30, 2024

View Audit 352012

Finding 548751 (2024-011)

Significant Deficiency 2024

State of Utah

UT

Subrecipient Monitoring Reporting Significant Deficiency

2024-011. DWS-Adopted Guidelines Not Followed When Evaluating an Applicant Housing Project State Agency: Department of Workforce Services Federal Agency: Department of Housing and Urban Development The Housing and Community Development Division is in the process of completing a full HTF policy and p...

2024-011. DWS-Adopted Guidelines Not Followed When Evaluating an Applicant Housing Project State Agency: Department of Workforce Services Federal Agency: Department of Housing and Urban Development The Housing and Community Development Division is in the process of completing a full HTF policy and procedures rewrite with a robust internal controls process. This will include an updated HTF monitoring checklist and a quality control check of said monitoring checklist by the Program Manager. Anticipated correction date: March 31, 2025 Responsible person: Daniel Murphy, HCD Program Manager, 385-630-8368

View Audit 352012

Finding 548749 (2024-010)

Significant Deficiency 2024

State of Utah

UT

Eligibility Matching / Level of Effort / Earmarking Subrecipient Monitoring § 200.303

2024-010. HTF Project Does Not Meet Eligible Income Requirements State Agency: Department of Workforce Services Federal Agency: Department of Housing and Urban Development The Housing and Community Development Division is in the process of completing a full HTF policy and procedures rewrite with a r...

2024-010. HTF Project Does Not Meet Eligible Income Requirements State Agency: Department of Workforce Services Federal Agency: Department of Housing and Urban Development The Housing and Community Development Division is in the process of completing a full HTF policy and procedures rewrite with a robust internal controls process. This will include an updated HTF monitoring checklist and a quality control check of said monitoring checklist by the Program Manager. Anticipated correction date: March 31, 2025 Responsible person: Daniel Murphy, HCD Program Manager, 385-630-8368

View Audit 352012

Finding 548700 (2024-017)

None 2024

State of Utah

UT

Subrecipient Monitoring

2024-017. Working Capital Reserves in Excess of Federal Guidelines State Agency: Public Employee Health Program Federal Agency: Various State Medical Given that the PEHP State Medical Program reserves are just over 60 days, our corrective action plan focuses on continuous monitoring and financial st...

2024-017. Working Capital Reserves in Excess of Federal Guidelines State Agency: Public Employee Health Program Federal Agency: Various State Medical Given that the PEHP State Medical Program reserves are just over 60 days, our corrective action plan focuses on continuous monitoring and financial stewardship to ensure compliance with reserve requirements while maintaining the program's financial health. The program was below 60 days on June 30, 2023. There are inherent variabilities and risks associated with medical claims, and reserve fluctuations are expected due to factors such as claim experience, utilization trends, and cost variations. We do not anticipate issuing a refund unless there is a long-term trend of excess reserves over the next three years. PEHP will continue to track performance and adjust necessary to maintain levels. Long-Term Disability After the measurement date of June 30, 2024, the PEHP Board of Directors approved a refund of excess reserves of $3,468,201.87 to the state of Utah. PEHP issued a check on September 12, 2024, and requested State Finance to calculate the federal portion of the refund and distribute it appropriately to the federal government. Additionally, our corrective action plan focuses on ensuring financial stability while evaluating the impact of recent plan modifications introduced by Senate Bill 21 from the 2025 Utah Legislative Session. The bill introduced specific changes to the LTD program that may impact claims experience and long-term reserve requirements. A thorough actuarial analysis is underway to assess how these modifications will affect future liabilities. While excess reserves still exist, it is prudent to allow for the recent changes to fully materialize before making any further financial adjustments or refunds. PEHP closely monitors how these modifications affect benefit, utilization, and reserve levels. Medicare Supplement While PEHP did acknowledge we would issue a refund last year, the overall trend of the Medicare reserve is moving in the opposite direction. In fact, as of December 31, 2024, the preliminary calculated reserve has experienced a notable decrease compared prior year levels due to PEHP's proactive efforts to manage and optimize reserve levels. These efforts have focused on aligning reserves with claim experience, refining cost management strategies, and ensuring long-term sustainability. One such effort relates to recent Medicare Part D Program changes that eliminated the donut hole, reducing plan options from three to one. PEHP is year one of a three-year transition to a single Part D rate that will continue to draw reserves. We believe allowing these changes to fully materialize before any further financial adjustments or refunds is prudent.

View Audit 352012

Finding 548699 (2024-016)

None 2024

State of Utah

UT

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

2024-016. Working Capital Reserves in Excess of Federal Guidelines State Agency: Department of Governmental Operations Federal Agency: Various Division of Purchasing and General Services Cooperative Contract Management Fund – State Purchasing continues to decrease the administrative fees on state co...

2024-016. Working Capital Reserves in Excess of Federal Guidelines State Agency: Department of Governmental Operations Federal Agency: Various Division of Purchasing and General Services Cooperative Contract Management Fund – State Purchasing continues to decrease the administrative fees on state cooperative contracts as each contract expires and is rebid. This is a slow process since State Purchasing has nearly 1,300 cooperative contracts with an average 5-year term. With only about 20% of the contracts expiring each year, this is an ongoing and slow process. Although State Purchasing is allowed under law to collect up to a 1.0% administrative fee on each cooperative contract, currently the average administrative fee is 0.35%. The excess reserves are also being reallocated to other programs. These allocations are intended to both reduce the excess reserve balance and to create efficiencies within the division to better serve state agencies. Federal Surplus Property Fund – The excess reserves are to be used in relocating Surplus to the Taylorsville State Office Building in March 2025. Contact Person: Windy Aphayrath (waphayrath@utah.gov, 801-957-7138), Director, Division of Purchasing and General Services Anticipated Correction Date: June 30, 2025 Division of Finance Purchasing Cards Fund (P-Card) – The system implementation was completed at the end of calendar year 2024. State Finance is working to analyze the annual costs of the system, develop a cost allocation strategy between the travel and P-Card programs, and adjust travel rates to cover the travel program's ongoing costs. The P-Card program will then distribute any remaining P-Card rebates to state agencies respective to their spending, if applicable. This effort will eliminate any excess federal reserves in the P-Card fund by the end of fiscal year 2025. Contact Person: Allyson Branch (abranch@utah.gov, 801-597-3523), Assistant Director, Division of Finance Anticipated Correction Date: June 30, 2025 Division of Risk Management Workers’ Compensation Fund – The Division of Risk Management has received approval from the Utah Legislature to reduce rates for workers’ compensation in fiscal year 2026. This will take effect on July 1, 2025. The division will also request at the next Legislative session to reallocate excess reserves from the Workers’ Compensation Fund to the Property Fund. This will be completed by July 1, 2026. Contact Person: Rachel Terry (rachelgterry@utah.gov, 801-702-7445), Director, Division of Risk Management, Anticipated Correction Date: July 1, 2026 Division of Technology Services Communication Services – The Division has worked to reduce the excess reserves and has been successful in decreasing the balance compared to the previous year. In addition, the current year rate was calculated to continue decreasing the excess reserve balance. Next year rates have also been adjusted to further reduce the excess reserve balance. We are working to balance reductions in retained earnings while maintaining services until the products reach the end of their lifecycle. Network Services – The Division is estimating that excess reserves will decrease as a result of anticipated increases in expenses over fiscal years 2025, 2026, and 2027 to support the migration to a cloud-based platform. We will continue to monitor rates and expenses as the technology environment continually changes. Printing Services – The Division has set the current year rate to recover costs in order to reduce the excess reserves. The threshold for this program has a small limit for a product with a very high volume. Print demand this year has been low, and we are forecasting this to be fully corrected by the end of fiscal year 2025. Contact Person: Jake Hennessy (jakehennessy@utah.gov, 385-271-2301), Executive Finance Director, Department of Government Operations Anticipated Correction Date: June 30, 2025 Division of Human Resource Management Human Resources Field Services – A cost allocation plan was developed to better align expenses with the specific service area supported. Field Service rates were lowered for fiscal year 2025. We anticipate continuing to fine tune rates to bring the Field Service reserve balance down. Contact Person: John Barrand (jbarrand@utah.gov, 801-957-9350), Director, Division of Human Resource Management Anticipated Correction Date: June 30, 2025

View Audit 352012

Finding 548698 (2024-015)

Significant Deficiency 2024

State of Utah

UT

Subrecipient Monitoring Significant Deficiency Matching / Level of Effort / Earmarking § 200.303

2024-015. Reported Number of Homeowners Overstated State Agency: Department of Workforce Services Federal Agency: Department of the Treasury The Housing and Community Development Division will adopt a quality review process to address this finding. Fortunately, the Quarterly Reports are cumulative s...

2024-015. Reported Number of Homeowners Overstated State Agency: Department of Workforce Services Federal Agency: Department of the Treasury The Housing and Community Development Division will adopt a quality review process to address this finding. Fortunately, the Quarterly Reports are cumulative so we have updated the current report to reflect the accurate household counts with an AMI under 100%. Anticipated correction date: March 31, 2025 Responsible person: Ambra Peterson, HCD Program Manager, 385-312-6551

View Audit 352012

Finding 548697 (2024-014)

Significant Deficiency 2024

State of Utah

UT

Subrecipient Monitoring Reporting Significant Deficiency

2024-014. Errors in Coronavirus SLFRF Quarterly Reports State Agency: Governor’s Office of Planning and Budget Federal Agency: Department of the Treasury GOPB has not received a response from the Treasury Office of Recovery Programs regarding the application of the $10 million capital expenditure re...

2024-014. Errors in Coronavirus SLFRF Quarterly Reports State Agency: Governor’s Office of Planning and Budget Federal Agency: Department of the Treasury GOPB has not received a response from the Treasury Office of Recovery Programs regarding the application of the $10 million capital expenditure reporting threshold. GOPB is working with the National Association of State Budget Officers to see if they can receive a response. GOPB will add a new capital expenditure section to each ARPA SLFRF Appropriation Tracking and Documentation Form to document the applicability of capital expense requirements for the project. If a project requires additional justification, based on clarification provided by the Treasury, GOPB and the agency will record the justification and documentation on the form and submit that information in the next quarterly ARPA SLFRF P&E Report-Quarter 4 2024. While preparing the October 2024 ARPA SLFRF P&E Report-Quarter 3 2024, GOPB will reconcile all reported obligations with backup documents. This reconciliation will be completed for future reports. Contact Person: Darcy Jaimez, Fiscal Grant Manager, 385-377-3373 Anticipated Correction Date: October 31, 2024

View Audit 352012

Finding 548696 (2024-013)

Significant Deficiency 2024

State of Utah

UT

Questioned Costs Subrecipient Monitoring Internal Control / Segregation of Duties

2024-013. Misunderstanding Caused Improper Spending of Coronavirus State and Local Fiscal Recovery Funds (SLFRF) State Agency: Governor’s Office of Planning and Budget Federal Agency: Department of the Treasury GOPB agrees with the finding. We acknowledge that GOEO mistakenly recorded $559,900 of e...

2024-013. Misunderstanding Caused Improper Spending of Coronavirus State and Local Fiscal Recovery Funds (SLFRF) State Agency: Governor’s Office of Planning and Budget Federal Agency: Department of the Treasury GOPB agrees with the finding. We acknowledge that GOEO mistakenly recorded $559,900 of expenditures to the SLFRF program and identified the same error during the quarterly expenditure review process. Upon identifying this error, GOPB promptly addressed the issue with GOEO so that expenditures could be corrected in the financial system before the end of the FY 2024 closeout and the July 2024 quarterly ARPA SLFRF report. Corrective Action Plan: To improve oversight and monitoring of expenditures, GOPB will work closely with GOEO to ensure that all expenditures charged to SLFRF projects comply with program requirements. GOPB will also add content to agency SLFRF trainings about regularly reviewing project ARPA SLFRF Appropriation Tracking and Documentation Forms, which outline the budget, scope, eligibility, and coding for ARPA SLFRF projects. The training will specifically emphasize the importance of each agency establishing effective internal controls for recording and reviewing ARPA SLFRF expenditures. In addition to updating its general training materials, GOPB will provide additional training to agency staff managing new projects so they understand policies and procedures. Contact Person: Duncan Evans, Senior Managing Director of Budget and Operations, 801-538-1592 Anticipated Correction Date: Completed October 31, 2024 State Agency: Governor’s Office of Economic Opportunity 1. GOEO will work with GOPB to ensure that all expenditures charged to SLFRF projects comply with program requirements. GOEO will participate in SLFRF trainings about regularly reviewing project ARPA SLFRF Appropriation Tracking and Documentation Forms, which outline the budget, scope, eligibility, and coding for ARPA SLFRF projects. Implementation of this plan has already begun and will be ongoing. 2. GOEO has improved internal controls. This includes improved review procedures by financial analysts and improved approval procedures by financial managers. Implementation of this plan is complete. Contact of Persons Responsible for Corrective Action: Kamron Dalton, Managing Director of Operations Jason Marden, Director of Finance Greg Jeffs, Agency Internal Audit Director (not responsible, but please cc communications)

View Audit 352012 Questioned Costs: $1

Finding 548695 (2024-012)

Significant Deficiency 2024

State of Utah

UT

Subrecipient Monitoring § 200.332

2024-012. Inadequate SLFRF Subrecipient Monitoring State Agency: Governor’s Office of Planning and Budget Federal Agency: Department of the Treasury To help staff at DEQ, DNR, and other agencies managing SLFRF funding improve their understanding of the subrecipient requirements and improve internal ...

2024-012. Inadequate SLFRF Subrecipient Monitoring State Agency: Governor’s Office of Planning and Budget Federal Agency: Department of the Treasury To help staff at DEQ, DNR, and other agencies managing SLFRF funding improve their understanding of the subrecipient requirements and improve internal controls to ensure compliance with these requirements, GOPB will review its ARPA Reference Guide and other ARPA SLFRF training materials to make sure these materials provide adequate guidance, policies, and procedures to agencies managing ARPA SLFRF funding. GOPB will specifically review guidance on the following: • Establishing and following agency policies and procedures to ensure compliance with subrecipient monitoring requirements. • Communicating required federal award information to sub-recipients • Evaluating each subrecipients risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward. • Monitor subrecipients according to their assessed risk and as required by 2 CFR 200.332. As part of the process of reviewing these materials, GOPB will work with DEQ and DNR to understand specific areas of guidance, training, or compliance that need to be strengthened. After reviewing and updating the ARPA Reference Guide and other ARPA SLFRF training materials, GOPB will distribute the updated guide to all agencies managing ARPA SLFRF funding. Additionally, GOPB will hold a dedicated training session with both DEQ and DNR, focusing on key areas such as subrecipient compliance requirements, internal controls, risk-based monitoring, Single Audit requirements, and federal compliance standards. GOPB will also maintain a schedule of regular training, site visits, and reviews to ensure ongoing adherence to monitoring protocols and to reinforce internal controls across all agencies. Contact Person: Duncan Evans, Senior Managing Director of Budget and Operations, 801-538-1592 Anticipated Correction Date: November 30, 2024 State Agency: Department of Natural Resources The Department of Natural Resources will review the ARPA Reference Guide and other GOPB ARPA SLFRF training materials provided by Governor’s Office of Planning and Budget to ensure our agency is compliant with managing all SLFRF subrecipient requirements and improve internal controls. DNR will work with GOPB to ensure that key personnel in our agency are doing the following: • Gaining a better understanding of subrecipient requirements and associated internal controls. Water Resources will review the ARPA Reference Guide and GOPB ARPA SLRF training materials to identify internal control weaknesses so they can be addressed. The Finance Manager, Contract/Grants Analyst and Project Funding Section Manager at the Division of Water Resources will also meet directly with GOPB by December 16, 2024 to ensure we understand all subrecipient monitoring requirements. • Establishing and following written policies and procedures to ensure compliance with subrecipient monitoring requirements. The Finance Manager will establish written policies and procedures by December 16, 2024 to ensure compliance with subrecipient monitoring requirements. • Communicating required federal award information to sub-recipients. Federal award information is included in all ARP A contracts executed by the Division of Water Resources and has been since June 2023. Federal award information associated with ARPA contracts executed before June 2023 were subsequently distributed to those grant applicants so that all grantees have the required federal award information. We will continue to review and ensure we are compliant with this requirement. • Evaluating each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward. Since May 2024 Water Resources has been requiring each ARPA grant applicant to fill out a risk assessment questionnaire. We will continue to assess responses to our grant recipients. The Finance Manager and the Project Funding manager will distribute a risk assessment questionnaire to all other grant recipients who have not filled one out yet so we have this information on file for all of our ARPA grantees. This will be completed by December 16, 2024. • Monitoring subrecipients according to their assessed risk and as required by 2 CFR 200.332. The Finance Manager and the Project Funding Manager will meet prior to December 16, 2024 to determine if additional monitoring tools are necessary for any of our subrecipients, which could include site visits, technical assistance, or additional monitoring based upon potential risk. As part of the process of reviewing these requirements, DNR will work with GOPB to understand specific areas of guidance, training, or compliance that need to be strengthened. DNR will work closely with GOPB to ensure specific personnel are trained, focusing on key areas such as subrecipient compliance requirements, internal controls, risk-based monitoring, Single Audit requirements, and federal compliance standards. DNR will ensure that this corrective action plan is implemented and adhered to. State Agency: Department of Environmental Quality DEQ is in the process of hiring a new FTE, one of whose responsibilities will be to review and monitor DEQ’s compliance with sub-recipient monitoring requirements for ARPA and other federal funds. This will ensure that risk assessments, Single Audit report reviews, and other monitoring activities are completed timely, properly documented, and in compliance with federal requirements. Responsible Person: Craig Silotti, Finance Director, 801 536-4460 Anticipated Completion Date: January 31, 2024

View Audit 352012

Finding 548694 (2024-009)

Significant Deficiency 2024

State of Utah

UT

Questioned Costs Internal Control / Segregation of Duties Subrecipient Monitoring § 200.303

2024-009. Unallowable Cash Medical Assistance Benefit Issuances State Agency: Department of Workforce Services Federal Agency: Department of the Treasury All cases cited in error have been reviewed, and all corrective actions have been completed. One-on-one meetings with individual staff who took ap...

2024-009. Unallowable Cash Medical Assistance Benefit Issuances State Agency: Department of Workforce Services Federal Agency: Department of the Treasury All cases cited in error have been reviewed, and all corrective actions have been completed. One-on-one meetings with individual staff who took approval actions on these cases will be scheduled to discuss what led to the incorrect decision and review the policy and procedure for learning. In addition, all eligibility workers who manage refugee programs will receive training on common error elements. All one-on-one meetings and team training will be completed by April 30, 2025. Anticipated correction date: April 30, 2025 Responsible person: Muris Prses, Division Director, Eligibility Services Division, 801-889-9712

View Audit 352012 Questioned Costs: $1

Finding 548693 (2024-007)

Significant Deficiency 2024

State of Utah

UT

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring

2024-007. Refugee Grant Expenditures Charged Outside Award Period State Agency: Department of Workforce Services Federal Agency: Department of Health and Human Services The department will implement a more detailed and thorough review of transactions to ensure that costs are attributed to the applic...

2024-007. Refugee Grant Expenditures Charged Outside Award Period State Agency: Department of Workforce Services Federal Agency: Department of Health and Human Services The department will implement a more detailed and thorough review of transactions to ensure that costs are attributed to the applicable period of performance in which the work was performed, and expenses were incurred and will ensure that costs are subsequently charged to the corresponding grant award. Anticipated correction date: January 31, 2025 Responsible person: Nathan Harrison, Executive Finance Director, 801-808-0676

View Audit 352012 Questioned Costs: $1

Finding 548692 (2024-006)

Significant Deficiency 2024

State of Utah

UT

Subrecipient Monitoring Reporting Significant Deficiency § 200.303

2024-006. TANF ACF-204 Report Does Not Match Supporting Documentation State Agency: Department of Workforce Services Federal Agency: Department of Health and Human Services The report processes will be updated to add internal controls. The program manager will coordinate with finance staff to review...

2024-006. TANF ACF-204 Report Does Not Match Supporting Documentation State Agency: Department of Workforce Services Federal Agency: Department of Health and Human Services The report processes will be updated to add internal controls. The program manager will coordinate with finance staff to review all finance documentation utilized for the report. Prior to submission of the report, it will be reviewed by division and finance leadership to ensure the report aligns with documentation and is correct. Anticipated correction date: December 31, 2024 Responsible person: Liz Carver, Division Director, 801-514-1017

View Audit 352012

Finding 548687 (2024-004)

Significant Deficiency 2024

Wilberforce University

OH

Cash Management Subrecipient Monitoring Reporting

We concur with the auditor’s finding. The University has engaged a third party to review our reconciliation procedures and to make recommendations on improvements to our current policy. The recommendations will also include any additional documentation showing proof that the reconciliation has been ...

We concur with the auditor’s finding. The University has engaged a third party to review our reconciliation procedures and to make recommendations on improvements to our current policy. The recommendations will also include any additional documentation showing proof that the reconciliation has been completed as timely as required. The Vice President of Business & Finance and the Director of Student Financial Aid will review the reconciliations. Monitoring reports will be completed and shared with senior management and relevant department leaders. Implementation date: Immediately. Persons Responsible: Vice President for Business and Finance, Controller, and Director of Student Financial Aid.

View Audit 352009

Finding 548686 (2024-005)

Significant Deficiency 2024

Wilberforce University

OH

Student Financial Aid Matching / Level of Effort / Earmarking Eligibility

Management agrees with the auditors and has initiated the necessary corrective action plan to mitigate the deficiency from occuring again. The plan is to implement new procedures to ensure the reporting to the NSLDS is done on a timely basis.

View Audit 352009

Finding 548682 (2024-001)

Significant Deficiency 2024

City of San Buenaventura

CA

Reporting § 200.327

The City staff will be stricter in following its established internal control procedures to ensure that all reporting requirements are met and submitted timely. The City will also establish access to the Integrated Disbursement and Information System (IDIS) for another member of the Finance Departme...

The City staff will be stricter in following its established internal control procedures to ensure that all reporting requirements are met and submitted timely. The City will also establish access to the Integrated Disbursement and Information System (IDIS) for another member of the Finance Department in a backup capacity. Where applicable, the City will request an extension from the funding agency and maintain a record of the approval when a report cannot be submitted by the due date.

View Audit 352008

Finding 548679 (2024-002)

Significant Deficiency 2024

City of San Bernardino

CA

Subrecipient Monitoring Reporting

Subrecipient Agreements Significant Deficiency and Non-Material Noncompliance Recommendation: We recommend the City review 2CFR200 to ensure information required in subrecipient agreements is properly included. Corrective Action: The Housing and Homelessness Division is aware of the deficiency ident...

Subrecipient Agreements Significant Deficiency and Non-Material Noncompliance Recommendation: We recommend the City review 2CFR200 to ensure information required in subrecipient agreements is properly included. Corrective Action: The Housing and Homelessness Division is aware of the deficiency identified and is actively coordinating with the City’s legal department to incorporate the required information into the City’s subrecipient agreement templates. Staff will review the 2CFR200 and ensure the required information is incorporated into the City’s sub-recipient agreement templates. Person Responsible for Corrective Action: The Housing and Division Managers, Senior Management Analyst, City’s Legal Department. Anticipated Completion Date for Corrective Action: 8 Weeks from approval of this corrective action plan 2024-03 – Subaward Reporting Requirements for Federal Funding Accountability and Transparency Act (FFATA) Significant Deficiency and Non-Material Noncompliance Recommendation: We recommend the City implement a tracking system to remind staff of the various reports due and respective deadlines. Corrective Action: Develop and implement an agreement routing cover page or other tracking system for all agreements, including sub-recipient agreements. This system will consist of required action items, including various Federal, State, and Local reports due and respective deadlines necessary to comply with sub-award reporting requirements consistent with the Federal Funding Accountability and Transparency Act (FFATA) and other applicable reporting requirements. Person Responsible for Corrective Action: The Housing and Homelessness Division’s Senior Management Analyst Anticipated Completion Date for Corrective Action: 4 Weeks from approval of this corrective action plan.

View Audit 351999

Corrective Action Plans

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