Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Finding 2023-002: Preparation and Maintenance of Equipment Population Program Name: National Railroad Passenger Corporation Grants COVID-19 National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award No.: FR-AMT-0020-20 FR-AMT-0022-21 FR-AMT-0026-22 FR-AMT-0028-22 Federal Agency: U.S. Department of Transportation Criteria The code of federal regulations – 2 CFR 200.1 provides the following definition of Equipment: - Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000. The code of federal regulations – 2 CFR 200.313 Equipment requires that: - Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). The code of federal regulations – 2 CFR 200.303 – Internal Controls requires that non-Federal entities must: - Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The following exceptions to the criteria were observed during the performance of the audit procedures as it relates to completeness and accuracy of equipment population: 1. In reviewing the equipment population provided to EY as part of the audit for FY23, we noted the Company mapped FY23 equipment activity relating to FR-AMT-0020-20, FR-AMT-0022-21 and FR-AMT-0026-22 grants to older funding sources. Per inquiry of management, FY23 Overhauled equipment activity was originally mapped incorrectly to prior year grant awards and fund source years. 2. Population contained an asset that could not be observed as the nature of the purchased equipment was a combination of tools with each individually costing less than $5,000. 3. Population contained an asset that had been replaced in 2021, and as such should not have been included in the equipment listing. Questioned Costs None. Context Population of single audit equipment records is manually prepared each period where funding sources are assigned to each asset based on the unique asset identifier. The data source used by the Capital Accounting team did not take into consideration overhaul activity during the FY23 period that was undertaken over equipment assets acquired in 2014-2016 fiscal years. (Condition 1) One of the 60 selections made for testing could not be observed, as the underlying equipment maintenance systems did not have a record of this item due to the fact that items purchased consisted of tools that were individually less than $5,000 and as such did not meet the definition of Equipment as defined by 2 CFR 200.1. The population provided to EY incorrectly included an exception as described in the Condition section above, indicating that following internal control was not functioning as designed: “Monthly, Lead Accountant, Capital Accounting exports equipment data from PP into an Excel spreadsheet (the Equipment Spreadsheet) and manually determines the eligibility of the equipment. The determination is subsequently reviewed by the Senior Manager, Capital Accounting.” (Condition 2) In the initial population provided, we noted that one of the assets had been retired and replaced in 2021 and should have not been included within the population. This was an error that was not corrected during timely updates of the maintenance records. (Condition 3) Effect Amtrak’s control procedures in place as it relates to the preparation of equipment population were not designed in such a manner that would timely identify the conditions noted. Cause The exception from the criteria noted is attributed to the following cause: 1. Highly manual process required to reconcile data between multiple systems in order to maintain a complete and accurate record for each equipment asset. 2. Internal control procedures as designed are not detailed enough to review equipment purchases to be able to determine eligibility of the asset to be classified as equipment under 2 CFR equipment valuation thresholds. Identification as a Repeat Finding Not a repeat finding. Recommendation To address the Condition identified above, we recommend Amtrak to continue integration of the systems in such a way that appropriate funding source would be tagged to each asset automatically and that required property records would automatically be consolidated into one system of record and updated in that system. Ensure that adequate IT interface and business process application controls over the completeness, accuracy, validity, confidentiality, and availability of transactions and data during application processing (input, processing, output, etc.) are in place. Additionally, management should consider breaking out large purchase orders containing multiple items of equipment and tools under one purchase request, by creating separate level 2 WBSE codes in order to distinguish between different types of items being acquired, in order to be able to provide more appropriate classification. Views of Responsible Officials Amtrak agrees with the finding related to the equipment population and believes that strengthening procedures around the preparation and review of the population is needed to prevent errors in future populations. Amtrak recognizes that remediation of this finding will require enhancing documentation around the preparation of the population and documenting a set of procedures to follow for reviewing the population. Some of these efforts have already been enacted while others will be developed and implemented prior to September 30, 2024.
Finding 2023-002: Preparation and Maintenance of Equipment Population Program Name: National Railroad Passenger Corporation Grants COVID-19 National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award No.: FR-AMT-0020-20 FR-AMT-0022-21 FR-AMT-0026-22 FR-AMT-0028-22 Federal Agency: U.S. Department of Transportation Criteria The code of federal regulations – 2 CFR 200.1 provides the following definition of Equipment: - Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000. The code of federal regulations – 2 CFR 200.313 Equipment requires that: - Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). The code of federal regulations – 2 CFR 200.303 – Internal Controls requires that non-Federal entities must: - Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The following exceptions to the criteria were observed during the performance of the audit procedures as it relates to completeness and accuracy of equipment population: 1. In reviewing the equipment population provided to EY as part of the audit for FY23, we noted the Company mapped FY23 equipment activity relating to FR-AMT-0020-20, FR-AMT-0022-21 and FR-AMT-0026-22 grants to older funding sources. Per inquiry of management, FY23 Overhauled equipment activity was originally mapped incorrectly to prior year grant awards and fund source years. 2. Population contained an asset that could not be observed as the nature of the purchased equipment was a combination of tools with each individually costing less than $5,000. 3. Population contained an asset that had been replaced in 2021, and as such should not have been included in the equipment listing. Questioned Costs None. Context Population of single audit equipment records is manually prepared each period where funding sources are assigned to each asset based on the unique asset identifier. The data source used by the Capital Accounting team did not take into consideration overhaul activity during the FY23 period that was undertaken over equipment assets acquired in 2014-2016 fiscal years. (Condition 1) One of the 60 selections made for testing could not be observed, as the underlying equipment maintenance systems did not have a record of this item due to the fact that items purchased consisted of tools that were individually less than $5,000 and as such did not meet the definition of Equipment as defined by 2 CFR 200.1. The population provided to EY incorrectly included an exception as described in the Condition section above, indicating that following internal control was not functioning as designed: “Monthly, Lead Accountant, Capital Accounting exports equipment data from PP into an Excel spreadsheet (the Equipment Spreadsheet) and manually determines the eligibility of the equipment. The determination is subsequently reviewed by the Senior Manager, Capital Accounting.” (Condition 2) In the initial population provided, we noted that one of the assets had been retired and replaced in 2021 and should have not been included within the population. This was an error that was not corrected during timely updates of the maintenance records. (Condition 3) Effect Amtrak’s control procedures in place as it relates to the preparation of equipment population were not designed in such a manner that would timely identify the conditions noted. Cause The exception from the criteria noted is attributed to the following cause: 1. Highly manual process required to reconcile data between multiple systems in order to maintain a complete and accurate record for each equipment asset. 2. Internal control procedures as designed are not detailed enough to review equipment purchases to be able to determine eligibility of the asset to be classified as equipment under 2 CFR equipment valuation thresholds. Identification as a Repeat Finding Not a repeat finding. Recommendation To address the Condition identified above, we recommend Amtrak to continue integration of the systems in such a way that appropriate funding source would be tagged to each asset automatically and that required property records would automatically be consolidated into one system of record and updated in that system. Ensure that adequate IT interface and business process application controls over the completeness, accuracy, validity, confidentiality, and availability of transactions and data during application processing (input, processing, output, etc.) are in place. Additionally, management should consider breaking out large purchase orders containing multiple items of equipment and tools under one purchase request, by creating separate level 2 WBSE codes in order to distinguish between different types of items being acquired, in order to be able to provide more appropriate classification. Views of Responsible Officials Amtrak agrees with the finding related to the equipment population and believes that strengthening procedures around the preparation and review of the population is needed to prevent errors in future populations. Amtrak recognizes that remediation of this finding will require enhancing documentation around the preparation of the population and documenting a set of procedures to follow for reviewing the population. Some of these efforts have already been enacted while others will be developed and implemented prior to September 30, 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
2023-005 2023-005 Accuracy over Federal Reporting Requirements (Repeat Finding 2022-004) Program Name: State Opioid Response Federal Assistance Listing No.: 93.788 Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Pass-Through Entity Number: Unknown Applicable Pass-Through Entity: Ohio Department of Mental Health and Addiction Services and Cuyahoga County, Ohio Type of Finding: Material Weakness Compliance Requirement: Reporting Criteria: Under Section 200.303 of the Uniform Guidance, a non-federal entity must maintain effective internal controls to ensure compliance with federal statutes, regulations, and award terms. Point of Freedom needs to establish and document policies and procedures to meet control objectives outlined in 2 CFR Section 200.1, particularly ensuring accurate recording and accounting of transactions for reliable financial statements and federal reports. Condition: Our federal reports testing revealed inaccuracies in the reports, with supporting documentation failing to corroborate the submitted information. Additionally, management has not provided adequate support to verify the accuracy of these reports. Cause of Condition: The Organization's lack of developed policies and procedures for compliance has led to the identified deficiencies in federal reports. Effect: Inadequate controls in this compliance area pose a significant risk that the Organization may fail to meet federal award reporting requirements. Questioned Cost: Not Quantifiable Context: We selected three months' worth of monthly reports for ADAMHS and one closeout report for OHMAS. Recommendation: We recommend that management develop and implement policies and procedures that address compliance requirements. Additionally, provide comprehensive training to employees on these policies and ensure consistent monitoring to maintain accuracy and timeliness in federal reporting. We also suggest a review process. Views of Responsible Officials: POF's initial and current exposure a few months later to Single Audit compliance requirements have sharpened its focus on the need to purposefully identify and maintain corroborating evidence regarding its timely submission and acceptance by each of the respective funding sources. While POF believes that all these reporting requirements were timely met and accepted by all funding sources, it did not consistently maintain either the report itself, or the related documentation such as copies of the emails sent or the associated read-receipts as evidence of these reports. Effective July 1, POF routinely and consistently accumulated and organized these documents as well as ancillary evidence of their transmission to, receipt by, and acknowledgement of acceptance by the federal agency. POF will be more diligent in its transmissions to funders. POF noted that the 2022 Closeout Report was inexplicably re-submitted instead of the correct 2023 Closeout Report. This is unacceptable, and POF will add a second set of reviews by a second person to improve quality control in this area. As necessary, POF will seek professional education and advice in implementing policies, practices, and procedures in addition to those already described herein.
Criteria or Specific Requirement 2 CFR 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. One of the objectives of internal control over compliance as found in 2 CFR section 200.1 include that transactions should be properly recorded and accounted for in order to permit the preparation of reliable financial statements and federal reports. Condition This deficiency is related to the financial statements finding 2023-01, as listed in Part II above. The City’s financial statements required material audit adjusting journal entries for the financial statements to be presented in accordance with generally accepted accounting principles (GAAP). The financial statements are required to be the product of a financial reporting system that offers reasonable assurance that management is able to produce financial statements in accordance with GAAP. A portion of the adjustments were related to expenditures which were paid by and applied to funding provided by the ARPA Coronavirus State and Local Fiscal Recovery Funds Program. The issue pertained to the financial statement assertion of cutoff; the expenditures were allowable expenditures in accordance with the federal award requirements. Cause The City’s year-end procedures did not identify certain necessary adjustments in a timely manner in order to remove capital outlay expenditures that were incorrectly recorded during the fiscal year ended September 30, 2023. Effect or Potential Effect Adjusting journal entries were proposed as certain accounts were misstated on the unadjusted financial statements, resulting in expenditures being incorrectly included in the unadjusted schedule of expenditures of federal awards. Questioned Costs None. Context During testing of subsequent disbursements and the potential for unrecorded liabilities and during internal control and compliance testing of the major Federal program, it was noted there were two invoices, amounting to a total of $415,821, recorded within accounts payable as capital outlay expenditures which were improperly recorded in the fiscal year ended September 30, 2023. As evidenced by the invoice date and ship date within the invoices, the equipment was not shipped, and the equipment was not received by the City, until after year-end. The expenditures should be recorded in the fiscal year ended September 30, 2024. Repeat Finding This is a variation of a prior year finding from 2022. See summary schedule of prior audit findings. Recommendation Management should ensure year-end closing procedures are completed in a timely manner and are sufficient to assure accounts and financial statements are prepared in accordance with GAAP. Management should assess the risk associated with this condition and identify any additional processes that can be incorporated into their existing controls to improve the deficiency; such as, minimizing the likelihood of year-end material audit adjustments through review of transactions and balances for general propriety and accuracy within one month after year-end. Follow-up and inquiries can be made timely for any transactions for which proper recording is unclear to management, if any. The Grants Administrator should maintain an up-to-date listing of expenditures by award (for all federal, state, and local awards) and should communicate with the Finance Department on a monthly basis to review the listing and determine the proper period in which the expenditures should be recorded and presented.
Federal Agency: Department of Housing and Urban Development Federal Program Name: Continuum of Care Program Assistance Listing Number: 14.267 Federal Award Identification Numbers: MN0087L5K052114, MN0014L5K002114, MN0186L5K112110 Award Periods: 4/1/22-3/31/23; 7/1/22-6/30/23; 8/1/22-7/31/23 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR 200.1 defines period of performance as the total estimated time interval between the start of an initial Federal award and the planned end date. Costs recorded to a grant must not be incurred prior to the start of the period of performance unless authorized by the federal awarding agency. Costs recorded to a grant must also not be incurred after the period of performance. Condition: During our audit testing, we noted costs were charged outside of the period of performance for three different awards. Questioned costs: $5,645 Context: We tested 40 transactions from the beginning of the period of performance, noting 2 exceptions where grants were charged for costs incurred prior to the period of performance. We tested 40 transactions from the ending of the period of performance, noting 3 exceptions where grants were charged after the period of performance. Cause: Invoices were charged based on payment date instead of the incurred date. Effect: Grants were charged for costs outside the period of performance. Management repaid the questioned costs to the grantor during the audit. Repeat finding: Not a repeat finding Recommendation: We recommend the Organization put procedures in place to identify the performance period when charging invoices to grants, particularly during the start and end of the period of performance. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Housing and Urban Development Federal Program Name: Continuum of Care Program Assistance Listing Number: 14.267 Federal Award Identification Numbers: MN0087L5K052114, MN0014L5K002114, MN0186L5K112110 Award Periods: 4/1/22-3/31/23; 7/1/22-6/30/23; 8/1/22-7/31/23 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR 200.1 defines period of performance as the total estimated time interval between the start of an initial Federal award and the planned end date. Costs recorded to a grant must not be incurred prior to the start of the period of performance unless authorized by the federal awarding agency. Costs recorded to a grant must also not be incurred after the period of performance. Condition: During our audit testing, we noted costs were charged outside of the period of performance for three different awards. Questioned costs: $5,645 Context: We tested 40 transactions from the beginning of the period of performance, noting 2 exceptions where grants were charged for costs incurred prior to the period of performance. We tested 40 transactions from the ending of the period of performance, noting 3 exceptions where grants were charged after the period of performance. Cause: Invoices were charged based on payment date instead of the incurred date. Effect: Grants were charged for costs outside the period of performance. Management repaid the questioned costs to the grantor during the audit. Repeat finding: Not a repeat finding Recommendation: We recommend the Organization put procedures in place to identify the performance period when charging invoices to grants, particularly during the start and end of the period of performance. Views of responsible officials: There is no disagreement with the audit finding.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.
Finding 2023-002: Preparation and Maintenance of Equipment Population Program Name: National Railroad Passenger Corporation Grants COVID-19 National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award No.: FR-AMT-0020-20 FR-AMT-0022-21 FR-AMT-0026-22 FR-AMT-0028-22 Federal Agency: U.S. Department of Transportation Criteria The code of federal regulations – 2 CFR 200.1 provides the following definition of Equipment: - Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000. The code of federal regulations – 2 CFR 200.313 Equipment requires that: - Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). The code of federal regulations – 2 CFR 200.303 – Internal Controls requires that non-Federal entities must: - Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The following exceptions to the criteria were observed during the performance of the audit procedures as it relates to completeness and accuracy of equipment population: 1. In reviewing the equipment population provided to EY as part of the audit for FY23, we noted the Company mapped FY23 equipment activity relating to FR-AMT-0020-20, FR-AMT-0022-21 and FR-AMT-0026-22 grants to older funding sources. Per inquiry of management, FY23 Overhauled equipment activity was originally mapped incorrectly to prior year grant awards and fund source years. 2. Population contained an asset that could not be observed as the nature of the purchased equipment was a combination of tools with each individually costing less than $5,000. 3. Population contained an asset that had been replaced in 2021, and as such should not have been included in the equipment listing. Questioned Costs None. Context Population of single audit equipment records is manually prepared each period where funding sources are assigned to each asset based on the unique asset identifier. The data source used by the Capital Accounting team did not take into consideration overhaul activity during the FY23 period that was undertaken over equipment assets acquired in 2014-2016 fiscal years. (Condition 1) One of the 60 selections made for testing could not be observed, as the underlying equipment maintenance systems did not have a record of this item due to the fact that items purchased consisted of tools that were individually less than $5,000 and as such did not meet the definition of Equipment as defined by 2 CFR 200.1. The population provided to EY incorrectly included an exception as described in the Condition section above, indicating that following internal control was not functioning as designed: “Monthly, Lead Accountant, Capital Accounting exports equipment data from PP into an Excel spreadsheet (the Equipment Spreadsheet) and manually determines the eligibility of the equipment. The determination is subsequently reviewed by the Senior Manager, Capital Accounting.” (Condition 2) In the initial population provided, we noted that one of the assets had been retired and replaced in 2021 and should have not been included within the population. This was an error that was not corrected during timely updates of the maintenance records. (Condition 3) Effect Amtrak’s control procedures in place as it relates to the preparation of equipment population were not designed in such a manner that would timely identify the conditions noted. Cause The exception from the criteria noted is attributed to the following cause: 1. Highly manual process required to reconcile data between multiple systems in order to maintain a complete and accurate record for each equipment asset. 2. Internal control procedures as designed are not detailed enough to review equipment purchases to be able to determine eligibility of the asset to be classified as equipment under 2 CFR equipment valuation thresholds. Identification as a Repeat Finding Not a repeat finding. Recommendation To address the Condition identified above, we recommend Amtrak to continue integration of the systems in such a way that appropriate funding source would be tagged to each asset automatically and that required property records would automatically be consolidated into one system of record and updated in that system. Ensure that adequate IT interface and business process application controls over the completeness, accuracy, validity, confidentiality, and availability of transactions and data during application processing (input, processing, output, etc.) are in place. Additionally, management should consider breaking out large purchase orders containing multiple items of equipment and tools under one purchase request, by creating separate level 2 WBSE codes in order to distinguish between different types of items being acquired, in order to be able to provide more appropriate classification. Views of Responsible Officials Amtrak agrees with the finding related to the equipment population and believes that strengthening procedures around the preparation and review of the population is needed to prevent errors in future populations. Amtrak recognizes that remediation of this finding will require enhancing documentation around the preparation of the population and documenting a set of procedures to follow for reviewing the population. Some of these efforts have already been enacted while others will be developed and implemented prior to September 30, 2024.
Finding 2023-002: Preparation and Maintenance of Equipment Population Program Name: National Railroad Passenger Corporation Grants COVID-19 National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award No.: FR-AMT-0020-20 FR-AMT-0022-21 FR-AMT-0026-22 FR-AMT-0028-22 Federal Agency: U.S. Department of Transportation Criteria The code of federal regulations – 2 CFR 200.1 provides the following definition of Equipment: - Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000. The code of federal regulations – 2 CFR 200.313 Equipment requires that: - Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). The code of federal regulations – 2 CFR 200.303 – Internal Controls requires that non-Federal entities must: - Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The following exceptions to the criteria were observed during the performance of the audit procedures as it relates to completeness and accuracy of equipment population: 1. In reviewing the equipment population provided to EY as part of the audit for FY23, we noted the Company mapped FY23 equipment activity relating to FR-AMT-0020-20, FR-AMT-0022-21 and FR-AMT-0026-22 grants to older funding sources. Per inquiry of management, FY23 Overhauled equipment activity was originally mapped incorrectly to prior year grant awards and fund source years. 2. Population contained an asset that could not be observed as the nature of the purchased equipment was a combination of tools with each individually costing less than $5,000. 3. Population contained an asset that had been replaced in 2021, and as such should not have been included in the equipment listing. Questioned Costs None. Context Population of single audit equipment records is manually prepared each period where funding sources are assigned to each asset based on the unique asset identifier. The data source used by the Capital Accounting team did not take into consideration overhaul activity during the FY23 period that was undertaken over equipment assets acquired in 2014-2016 fiscal years. (Condition 1) One of the 60 selections made for testing could not be observed, as the underlying equipment maintenance systems did not have a record of this item due to the fact that items purchased consisted of tools that were individually less than $5,000 and as such did not meet the definition of Equipment as defined by 2 CFR 200.1. The population provided to EY incorrectly included an exception as described in the Condition section above, indicating that following internal control was not functioning as designed: “Monthly, Lead Accountant, Capital Accounting exports equipment data from PP into an Excel spreadsheet (the Equipment Spreadsheet) and manually determines the eligibility of the equipment. The determination is subsequently reviewed by the Senior Manager, Capital Accounting.” (Condition 2) In the initial population provided, we noted that one of the assets had been retired and replaced in 2021 and should have not been included within the population. This was an error that was not corrected during timely updates of the maintenance records. (Condition 3) Effect Amtrak’s control procedures in place as it relates to the preparation of equipment population were not designed in such a manner that would timely identify the conditions noted. Cause The exception from the criteria noted is attributed to the following cause: 1. Highly manual process required to reconcile data between multiple systems in order to maintain a complete and accurate record for each equipment asset. 2. Internal control procedures as designed are not detailed enough to review equipment purchases to be able to determine eligibility of the asset to be classified as equipment under 2 CFR equipment valuation thresholds. Identification as a Repeat Finding Not a repeat finding. Recommendation To address the Condition identified above, we recommend Amtrak to continue integration of the systems in such a way that appropriate funding source would be tagged to each asset automatically and that required property records would automatically be consolidated into one system of record and updated in that system. Ensure that adequate IT interface and business process application controls over the completeness, accuracy, validity, confidentiality, and availability of transactions and data during application processing (input, processing, output, etc.) are in place. Additionally, management should consider breaking out large purchase orders containing multiple items of equipment and tools under one purchase request, by creating separate level 2 WBSE codes in order to distinguish between different types of items being acquired, in order to be able to provide more appropriate classification. Views of Responsible Officials Amtrak agrees with the finding related to the equipment population and believes that strengthening procedures around the preparation and review of the population is needed to prevent errors in future populations. Amtrak recognizes that remediation of this finding will require enhancing documentation around the preparation of the population and documenting a set of procedures to follow for reviewing the population. Some of these efforts have already been enacted while others will be developed and implemented prior to September 30, 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs Federal Program: 93.XXX U.S. Department of Health and Human Services Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized. Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)). Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds. Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds. Questioned Costs: None noted. Repeat Finding: No. Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds. Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.
2023-005 2023-005 Accuracy over Federal Reporting Requirements (Repeat Finding 2022-004) Program Name: State Opioid Response Federal Assistance Listing No.: 93.788 Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Pass-Through Entity Number: Unknown Applicable Pass-Through Entity: Ohio Department of Mental Health and Addiction Services and Cuyahoga County, Ohio Type of Finding: Material Weakness Compliance Requirement: Reporting Criteria: Under Section 200.303 of the Uniform Guidance, a non-federal entity must maintain effective internal controls to ensure compliance with federal statutes, regulations, and award terms. Point of Freedom needs to establish and document policies and procedures to meet control objectives outlined in 2 CFR Section 200.1, particularly ensuring accurate recording and accounting of transactions for reliable financial statements and federal reports. Condition: Our federal reports testing revealed inaccuracies in the reports, with supporting documentation failing to corroborate the submitted information. Additionally, management has not provided adequate support to verify the accuracy of these reports. Cause of Condition: The Organization's lack of developed policies and procedures for compliance has led to the identified deficiencies in federal reports. Effect: Inadequate controls in this compliance area pose a significant risk that the Organization may fail to meet federal award reporting requirements. Questioned Cost: Not Quantifiable Context: We selected three months' worth of monthly reports for ADAMHS and one closeout report for OHMAS. Recommendation: We recommend that management develop and implement policies and procedures that address compliance requirements. Additionally, provide comprehensive training to employees on these policies and ensure consistent monitoring to maintain accuracy and timeliness in federal reporting. We also suggest a review process. Views of Responsible Officials: POF's initial and current exposure a few months later to Single Audit compliance requirements have sharpened its focus on the need to purposefully identify and maintain corroborating evidence regarding its timely submission and acceptance by each of the respective funding sources. While POF believes that all these reporting requirements were timely met and accepted by all funding sources, it did not consistently maintain either the report itself, or the related documentation such as copies of the emails sent or the associated read-receipts as evidence of these reports. Effective July 1, POF routinely and consistently accumulated and organized these documents as well as ancillary evidence of their transmission to, receipt by, and acknowledgement of acceptance by the federal agency. POF will be more diligent in its transmissions to funders. POF noted that the 2022 Closeout Report was inexplicably re-submitted instead of the correct 2023 Closeout Report. This is unacceptable, and POF will add a second set of reviews by a second person to improve quality control in this area. As necessary, POF will seek professional education and advice in implementing policies, practices, and procedures in addition to those already described herein.