Finding Reference Number: 2024-023 NH Department of Energy Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2301NHLIEA, 2401NHLIEA Federal Award Year: 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Cash Management Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-014 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity 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. Condition During our testwork over federal reporting as part of the Low-Income Home Energy Assistance program (LIHEAP), we noted the New Hampshire Department of Energy (the Department) advances payments to subrecipients to ensure that they have sufficient cash on hand in order to pay for benefit payments. The Department advances payments to subrecipients to ensure that they have sufficient cash on hand to pay for benefit payments. The Department passed through $38,545,693 to subrecipients during the year ended June 30, 2024. During our testwork over cash management, we noted that for the 4 cash advance payment samples selected for testwork, while the Department properly tracks subrecipient's expenditures, the Department does not ensure that the amount of time the cash on hand is minimized. The engagement team noted that for all 4 samples tested, cash is on hand for over 30 days according to each tracking sheet maintained by management. Cause The cause of the condition found was primarily due to insufficient monitoring procedures and internal controls to ensure that subrecipients either utilized advanced funds timely or effectively evaluate the amount of funds the subrecipient would need to have on hand at the time of the advance payment. Effect The effect of the condition found is that the Department was not in compliance with 2 CFR section 200.204(b)(1). Questioned Costs: None. Recommendation We recommend that the Department continue to review its existing internal controls, policies, and procedures relating to advancing funds to subrecipients to ensure that excess cash held by the subrecipients does not exceed 30 days. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-023 NH Department of Energy Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2301NHLIEA, 2401NHLIEA Federal Award Year: 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Cash Management Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-014 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity 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. Condition During our testwork over federal reporting as part of the Low-Income Home Energy Assistance program (LIHEAP), we noted the New Hampshire Department of Energy (the Department) advances payments to subrecipients to ensure that they have sufficient cash on hand in order to pay for benefit payments. The Department advances payments to subrecipients to ensure that they have sufficient cash on hand to pay for benefit payments. The Department passed through $38,545,693 to subrecipients during the year ended June 30, 2024. During our testwork over cash management, we noted that for the 4 cash advance payment samples selected for testwork, while the Department properly tracks subrecipient's expenditures, the Department does not ensure that the amount of time the cash on hand is minimized. The engagement team noted that for all 4 samples tested, cash is on hand for over 30 days according to each tracking sheet maintained by management. Cause The cause of the condition found was primarily due to insufficient monitoring procedures and internal controls to ensure that subrecipients either utilized advanced funds timely or effectively evaluate the amount of funds the subrecipient would need to have on hand at the time of the advance payment. Effect The effect of the condition found is that the Department was not in compliance with 2 CFR section 200.204(b)(1). Questioned Costs: None. Recommendation We recommend that the Department continue to review its existing internal controls, policies, and procedures relating to advancing funds to subrecipients to ensure that excess cash held by the subrecipients does not exceed 30 days. View of Responsible Officials: Management concurs with the finding above.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024 Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 requires that non_x0002_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 statues, regulations, and the terms and conditions of the federal award. Condition: No identified control around the allocation of employee hours allocated to the Organization’s microloan program, between administration, pre-technical assistance, and post_x0002_technical assistance. With respect to the level of effort required under the Organization’s microloan grant agreement, the Organization must incur a minimum of 50% of reimbursable employee costs for post loan technical assistance. Additionally, the Organization submits for reimbursement of hours for pre and post loan technical assistance, while administration hours are used towards matching requirements. The Organization was unable to produce support for the allocation of administration and pre and post technical assistance hours included with required quarterly progress reports associated with the grant. Cause: Lack of formal control processes and related documentation around the allocation of employee hours allocated to the microloan program. Effect: Possibility of improper allocation of hours between administration, pre-technical assistance, and post-technical assistance, which could result in improper reporting of hours and incorrect reimbursement requests for payroll costs. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to document support gathered to allocate microloan program hours between administration, pre-technical assistance, and post technical assistance. Documentation over the allocation of employee hours, should be retained and made readily available for inspection, that supports the allocation of hours included on quarterly progress reporting, that is required under the microloan program. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to implement a control around the allocation of payroll hours. As of January 1, 2024, all staff will be required to specify Micro hours on timesheets by entering Admin, Pre, or Post in the note section. This will ensure payroll time allocation to the Microgrant is properly gathered and supported when submitting reimbursement requests.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024. Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 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 statues, regulations, and the terms and conditions of the federal award. Condition: Improper or lack of completion of the Organization’s internal loan checklist within microloan files tested, which was identified as an internal control over the completeness of loan file documentation. Cause: Loan checklists were not completed by responsible officials. Effect: Loan files subjected to testing did not include the required documents. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to eliminate the risk of loan documents not being included in the files, this includes the use of pre-approved checklists that ensure personnel reviewing the loan files notate that all required documentation is retained in the loan file, prior to final issuance of the loan. The checklists should be tailored to specific requirements for each relevant loan program, should required documentation among loan programs vary. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to utilize a checklist specific to each loan program to ensure all required documents are entered into files. The Organization has implemented a loan filing system for each loan program dividing out the necessary documents required to be inserted into each loan file. The Production and Servicing Departments will be responsible for completing and reviewing the files to ensure all sections have been completed and updated as needed.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024 Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 requires that non_x0002_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 statues, regulations, and the terms and conditions of the federal award. Condition: No identified control around the allocation of employee hours allocated to the Organization’s microloan program, between administration, pre-technical assistance, and post_x0002_technical assistance. With respect to the level of effort required under the Organization’s microloan grant agreement, the Organization must incur a minimum of 50% of reimbursable employee costs for post loan technical assistance. Additionally, the Organization submits for reimbursement of hours for pre and post loan technical assistance, while administration hours are used towards matching requirements. The Organization was unable to produce support for the allocation of administration and pre and post technical assistance hours included with required quarterly progress reports associated with the grant. Cause: Lack of formal control processes and related documentation around the allocation of employee hours allocated to the microloan program. Effect: Possibility of improper allocation of hours between administration, pre-technical assistance, and post-technical assistance, which could result in improper reporting of hours and incorrect reimbursement requests for payroll costs. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to document support gathered to allocate microloan program hours between administration, pre-technical assistance, and post technical assistance. Documentation over the allocation of employee hours, should be retained and made readily available for inspection, that supports the allocation of hours included on quarterly progress reporting, that is required under the microloan program. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to implement a control around the allocation of payroll hours. As of January 1, 2024, all staff will be required to specify Micro hours on timesheets by entering Admin, Pre, or Post in the note section. This will ensure payroll time allocation to the Microgrant is properly gathered and supported when submitting reimbursement requests.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024. Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 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 statues, regulations, and the terms and conditions of the federal award. Condition: Improper or lack of completion of the Organization’s internal loan checklist within microloan files tested, which was identified as an internal control over the completeness of loan file documentation. Cause: Loan checklists were not completed by responsible officials. Effect: Loan files subjected to testing did not include the required documents. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to eliminate the risk of loan documents not being included in the files, this includes the use of pre-approved checklists that ensure personnel reviewing the loan files notate that all required documentation is retained in the loan file, prior to final issuance of the loan. The checklists should be tailored to specific requirements for each relevant loan program, should required documentation among loan programs vary. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to utilize a checklist specific to each loan program to ensure all required documents are entered into files. The Organization has implemented a loan filing system for each loan program dividing out the necessary documents required to be inserted into each loan file. The Production and Servicing Departments will be responsible for completing and reviewing the files to ensure all sections have been completed and updated as needed.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024 Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 requires that non_x0002_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 statues, regulations, and the terms and conditions of the federal award. Condition: No identified control around the allocation of employee hours allocated to the Organization’s microloan program, between administration, pre-technical assistance, and post_x0002_technical assistance. With respect to the level of effort required under the Organization’s microloan grant agreement, the Organization must incur a minimum of 50% of reimbursable employee costs for post loan technical assistance. Additionally, the Organization submits for reimbursement of hours for pre and post loan technical assistance, while administration hours are used towards matching requirements. The Organization was unable to produce support for the allocation of administration and pre and post technical assistance hours included with required quarterly progress reports associated with the grant. Cause: Lack of formal control processes and related documentation around the allocation of employee hours allocated to the microloan program. Effect: Possibility of improper allocation of hours between administration, pre-technical assistance, and post-technical assistance, which could result in improper reporting of hours and incorrect reimbursement requests for payroll costs. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to document support gathered to allocate microloan program hours between administration, pre-technical assistance, and post technical assistance. Documentation over the allocation of employee hours, should be retained and made readily available for inspection, that supports the allocation of hours included on quarterly progress reporting, that is required under the microloan program. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to implement a control around the allocation of payroll hours. As of January 1, 2024, all staff will be required to specify Micro hours on timesheets by entering Admin, Pre, or Post in the note section. This will ensure payroll time allocation to the Microgrant is properly gathered and supported when submitting reimbursement requests.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024. Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 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 statues, regulations, and the terms and conditions of the federal award. Condition: Improper or lack of completion of the Organization’s internal loan checklist within microloan files tested, which was identified as an internal control over the completeness of loan file documentation. Cause: Loan checklists were not completed by responsible officials. Effect: Loan files subjected to testing did not include the required documents. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to eliminate the risk of loan documents not being included in the files, this includes the use of pre-approved checklists that ensure personnel reviewing the loan files notate that all required documentation is retained in the loan file, prior to final issuance of the loan. The checklists should be tailored to specific requirements for each relevant loan program, should required documentation among loan programs vary. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to utilize a checklist specific to each loan program to ensure all required documents are entered into files. The Organization has implemented a loan filing system for each loan program dividing out the necessary documents required to be inserted into each loan file. The Production and Servicing Departments will be responsible for completing and reviewing the files to ensure all sections have been completed and updated as needed.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024 Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 requires that non_x0002_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 statues, regulations, and the terms and conditions of the federal award. Condition: No identified control around the allocation of employee hours allocated to the Organization’s microloan program, between administration, pre-technical assistance, and post_x0002_technical assistance. With respect to the level of effort required under the Organization’s microloan grant agreement, the Organization must incur a minimum of 50% of reimbursable employee costs for post loan technical assistance. Additionally, the Organization submits for reimbursement of hours for pre and post loan technical assistance, while administration hours are used towards matching requirements. The Organization was unable to produce support for the allocation of administration and pre and post technical assistance hours included with required quarterly progress reports associated with the grant. Cause: Lack of formal control processes and related documentation around the allocation of employee hours allocated to the microloan program. Effect: Possibility of improper allocation of hours between administration, pre-technical assistance, and post-technical assistance, which could result in improper reporting of hours and incorrect reimbursement requests for payroll costs. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to document support gathered to allocate microloan program hours between administration, pre-technical assistance, and post technical assistance. Documentation over the allocation of employee hours, should be retained and made readily available for inspection, that supports the allocation of hours included on quarterly progress reporting, that is required under the microloan program. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to implement a control around the allocation of payroll hours. As of January 1, 2024, all staff will be required to specify Micro hours on timesheets by entering Admin, Pre, or Post in the note section. This will ensure payroll time allocation to the Microgrant is properly gathered and supported when submitting reimbursement requests.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024. Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 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 statues, regulations, and the terms and conditions of the federal award. Condition: Improper or lack of completion of the Organization’s internal loan checklist within microloan files tested, which was identified as an internal control over the completeness of loan file documentation. Cause: Loan checklists were not completed by responsible officials. Effect: Loan files subjected to testing did not include the required documents. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to eliminate the risk of loan documents not being included in the files, this includes the use of pre-approved checklists that ensure personnel reviewing the loan files notate that all required documentation is retained in the loan file, prior to final issuance of the loan. The checklists should be tailored to specific requirements for each relevant loan program, should required documentation among loan programs vary. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to utilize a checklist specific to each loan program to ensure all required documents are entered into files. The Organization has implemented a loan filing system for each loan program dividing out the necessary documents required to be inserted into each loan file. The Production and Servicing Departments will be responsible for completing and reviewing the files to ensure all sections have been completed and updated as needed.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024 Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 requires that non_x0002_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 statues, regulations, and the terms and conditions of the federal award. Condition: No identified control around the allocation of employee hours allocated to the Organization’s microloan program, between administration, pre-technical assistance, and post_x0002_technical assistance. With respect to the level of effort required under the Organization’s microloan grant agreement, the Organization must incur a minimum of 50% of reimbursable employee costs for post loan technical assistance. Additionally, the Organization submits for reimbursement of hours for pre and post loan technical assistance, while administration hours are used towards matching requirements. The Organization was unable to produce support for the allocation of administration and pre and post technical assistance hours included with required quarterly progress reports associated with the grant. Cause: Lack of formal control processes and related documentation around the allocation of employee hours allocated to the microloan program. Effect: Possibility of improper allocation of hours between administration, pre-technical assistance, and post-technical assistance, which could result in improper reporting of hours and incorrect reimbursement requests for payroll costs. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to document support gathered to allocate microloan program hours between administration, pre-technical assistance, and post technical assistance. Documentation over the allocation of employee hours, should be retained and made readily available for inspection, that supports the allocation of hours included on quarterly progress reporting, that is required under the microloan program. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to implement a control around the allocation of payroll hours. As of January 1, 2024, all staff will be required to specify Micro hours on timesheets by entering Admin, Pre, or Post in the note section. This will ensure payroll time allocation to the Microgrant is properly gathered and supported when submitting reimbursement requests.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024. Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 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 statues, regulations, and the terms and conditions of the federal award. Condition: Improper or lack of completion of the Organization’s internal loan checklist within microloan files tested, which was identified as an internal control over the completeness of loan file documentation. Cause: Loan checklists were not completed by responsible officials. Effect: Loan files subjected to testing did not include the required documents. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to eliminate the risk of loan documents not being included in the files, this includes the use of pre-approved checklists that ensure personnel reviewing the loan files notate that all required documentation is retained in the loan file, prior to final issuance of the loan. The checklists should be tailored to specific requirements for each relevant loan program, should required documentation among loan programs vary. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to utilize a checklist specific to each loan program to ensure all required documents are entered into files. The Organization has implemented a loan filing system for each loan program dividing out the necessary documents required to be inserted into each loan file. The Production and Servicing Departments will be responsible for completing and reviewing the files to ensure all sections have been completed and updated as needed.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024 Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 requires that non_x0002_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 statues, regulations, and the terms and conditions of the federal award. Condition: No identified control around the allocation of employee hours allocated to the Organization’s microloan program, between administration, pre-technical assistance, and post_x0002_technical assistance. With respect to the level of effort required under the Organization’s microloan grant agreement, the Organization must incur a minimum of 50% of reimbursable employee costs for post loan technical assistance. Additionally, the Organization submits for reimbursement of hours for pre and post loan technical assistance, while administration hours are used towards matching requirements. The Organization was unable to produce support for the allocation of administration and pre and post technical assistance hours included with required quarterly progress reports associated with the grant. Cause: Lack of formal control processes and related documentation around the allocation of employee hours allocated to the microloan program. Effect: Possibility of improper allocation of hours between administration, pre-technical assistance, and post-technical assistance, which could result in improper reporting of hours and incorrect reimbursement requests for payroll costs. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to document support gathered to allocate microloan program hours between administration, pre-technical assistance, and post technical assistance. Documentation over the allocation of employee hours, should be retained and made readily available for inspection, that supports the allocation of hours included on quarterly progress reporting, that is required under the microloan program. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to implement a control around the allocation of payroll hours. As of January 1, 2024, all staff will be required to specify Micro hours on timesheets by entering Admin, Pre, or Post in the note section. This will ensure payroll time allocation to the Microgrant is properly gathered and supported when submitting reimbursement requests.
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024. Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 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 statues, regulations, and the terms and conditions of the federal award. Condition: Improper or lack of completion of the Organization’s internal loan checklist within microloan files tested, which was identified as an internal control over the completeness of loan file documentation. Cause: Loan checklists were not completed by responsible officials. Effect: Loan files subjected to testing did not include the required documents. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to eliminate the risk of loan documents not being included in the files, this includes the use of pre-approved checklists that ensure personnel reviewing the loan files notate that all required documentation is retained in the loan file, prior to final issuance of the loan. The checklists should be tailored to specific requirements for each relevant loan program, should required documentation among loan programs vary. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to utilize a checklist specific to each loan program to ensure all required documents are entered into files. The Organization has implemented a loan filing system for each loan program dividing out the necessary documents required to be inserted into each loan file. The Production and Servicing Departments will be responsible for completing and reviewing the files to ensure all sections have been completed and updated as needed.