FINDING 2024-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2024 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/ Cost Principles, Period of Performance Audit Findings: Material Weakness, Other Matters Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. Prior to the receipt of direct COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the City was responsible for the effective administration of the federal award, as well as the application of sound management practices and administration of federal funds in a manner consistent with program objectives and terms and conditions of the award. Recipients may use SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act, as added by section 9901 of the American Rescue Plan Act of 2021. The SLFRF program provides substantial flexibility for each recipient to meet local needs within four separate eligible use categories. Recipients may use SLFRF funds to: • Respond to the COVID-19 public health emergency and its negative economic impacts; • Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work; • Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient; and • Make necessary investments in water, sewer, or broadband infrastructure. The City elected to receive the standard revenue loss allowance, allowing it to claim its total SLFRF allocation of $3,821,386 as revenue loss to use for government services. The allocated funds may only be used to cover costs incurred from the period beginning on March 3, 2021, and ending on December 31, 2024. Obligations for costs incurred are required to be liquidated no later than December 31, 2026. INDIANA STATE BOARD OF ACCOUNTS 18 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During the audit period, the City completed one transfer of SLFRF funds from the Coronavirus State and Local Fi fund to the Grant Stipends fund in the amount of $30,000. The transfer was described as a reimbursement for stipends paid to essential workers. There was no documentation provided for audit to determine if the transfer was for allowable activities, met the cost objectives of the award, or that the associated expenditures were within the period of performance. The Grant Stipends fund was established in 2022, with total expenditures from the fund from 2022, 2023, and 2024 of only $28,009. Additionally, the transfer of SLFRF funds was commingled with other receipts into the Grant Stipends fund. Because the $30,000 transfer of SLFRF funds exceeded the total disbursements out of the Grant Stipends fund and because the City did not have an appropriate system in place to account for the federal expenditures separately from other grant and operating expenditures, we were unable to determine what, if any, expenditures from the Grant Stipends fund should be included in the population of federal expenditures under the award. Without a complete population of expenditures, we were unable to determine the City's compliance with the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. As such, the $30,000 transferred from the Coronavirus State and Local Fi fund is considered questioned costs. The City also did not have written procedures for determining the allowability of costs in accordance with subpart E of 2 CFR 200. The lack of effective internal controls and noncompliance were isolated to the situations described above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . . (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. . . . (g) be adequately documented. . . ." Cause A proper system of internal controls over the SLFRF expenditures was not designed by management of the City to ensure the SLFRF funds were being used appropriately. The City did not have policies and procedures in place to ensure that expenditures of federal awards were allowable and occurred within the period of performance. The City initiated a transfer of SLFRF funds from the grant fund to another fund without proper supporting documentation. The City was unable to differentiate expenditures made from federal and nonfederal funds within its ledger for the Grant Stipends fund. Effect Without the proper implementation of an effectively designed system of internal controls, a population of expenditures associated with the Grant Stipends fund could not be determined. As such, the City cannot ensure nor can we determine that expenditures of the grant were not unallowable, within the proper period, and adhered to established practices and policies. As a result, noncompliance in the form of questioned costs occurred and remained undetected. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. INDIANA STATE BOARD OF ACCOUNTS 20 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs Questioned costs in the amount of $30,000 were identified as noted in the Condition and Context. Recommendation We recommended the City's management establish a proper system of internal controls and develop policies and procedures to ensure that expenditures of federal awards are allowable and occur within the period of performance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Assistance Listing Number, Federal Agency, and Program Name - 93.323, U.S. Department of Health and Human Services, COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 2024 Pass through Entity - Wayne County Regional Educational Service Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.300(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 align with the 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). Per 2 CFR 200.403(g), costs must be adequately documented. Condition - The School District's controls did not prevent, or detect and correct in a timely manner, costs charged to the grant in excess of the related invoices. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A - Refer to context below. Context - In a sample of 13 non payroll related transactions, we identified 3 transactions where the costs charged to the grant exceeded the related invoices. The School District used a manual allocation process through a manual journal entry to charge expenses to the grant that resulted in the grant being charged $48,447 in excess of the supporting invoices. As of June 30, 2024, the School District had not yet requested reimbursement for the excess costs charged; the request was made and payment was received subsequent to year end. Upon identification of the error, the School District posted a manual journal entry to remove the duplicate costs of $48,447 from the grant fund and reduced the SEFA by this amount for the year ended June 30, 2024. The School District followed the guidance of the pass through entity provided subsequent to year end. Cause and Effect - Controls in place did not prevent, or detect and correct in a timely manner, an instance of noncompliance. The controls in place to verify that the manual adjusting journal entry was complete and accurate were not effective. As a result, the initial SEFA provided to the auditors was overstated by $48,447. The SEFA for the year ended June 30, 2024 was corrected. Recommendation - We recommend that the School District review its processes and controls to ensure the preparation and review of journal entries to charge costs to grant funds include a review for duplicate expenses. Views of Responsible Officials and Corrective Action Plan - The Grant Accounting team will develop a standard operating procedure on review and approval of journal entries. The Grant Account Team will provide training to Grant Compliance staff members on the defined process. Grant Compliance Senior Director and Assistant Director will be responsible for ensuring journal requests are submitted following the outlined operating procedure. Grant Accounting staff members will review submitted materials to ensure no invoice is overcharged and then process journal request.
REFERENCE: 2024-103 CFDA NUMBER 84.425D – COVID 19 – EDUCATION STABILIZATION FUND CFDA NUMBER 84.425U – COVID 19 – EDUCATION STABILIZATION FUND U.S. DEPARTMENT OF EDUCATION – 2022 U.S. DEPARTMENT OF EDUCATION – 2023 U.S. DEPARTMENT OF EDUCATION – 2024 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBERS: S425D200038, S425D210038, S425U2100038 QUESTIONED COSTS N/A CONDITION For of 3 of 60 non-payroll transactions tested, documentation was not available to demonstrate that the cost was allowable and approved in the final grant application. The costs were removed from the completion report approved by the Arizona Department of Education on December 19, 2024. Additionally, a fiscal monitoring completed by the Arizona Department of Education in December 2024, that covered the period of March 15, 2020 through September 30, 2023, reported the following unallowable costs, associated with Education Stabilization Funds grants, that the School is required to repay. • $4,982.34 (ESSER I) for continual internet and phone services not included in the approved grant budget; • $547.82 (ESSER I) for an online foreign language program not included in the approved grant budget; • $631.14 (ESSER II) for outdoor play equipment not included in the approved grant budget. • $3,000.00 (ESSER II) for contracted technical coach services not approved in the approved grant budget. The total known questioned costs are $9,161.30. CRITERIA In accordance with OMB Compliance Supplement, Part 6 – Internal Control, 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. In accordance with Title 2 of the Code of Federal Regulations, Subtitle A Office of Management and Budget Guidance for Grants and Agreements, Chapter II Office of Management and Budget Guidance, Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E -Cost Principles 200.403 Factors Affecting Allowability of Costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a. Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b. Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c. Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the recipient or subrecipient. d. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e. Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). g. Be adequately documented. See also §§ 200.300 through 200.309 of this part. h. Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). EFFECT Program requirements were not complied with. The School did not maintain adequate documentation of all costs charged to the federal program. CAUSE Internal controls were not designed appropriately to ensure that all charges to the federal grant were allowable. RECOMMENDATION AND BENEFIT A control system should be developed and implemented to ensure that documentation of all purchases charged to a federal program include only allowable costs and that the costs are included in the grant applications. Any reviews should be documented. This will help ensure that program requirements are complied. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
REFERENCE: 2024-102 CFDA NUMBER 84.367 – IMPROVING TEACHER QUALITY U.S. DEPARTMENT OF EDUCATION – 2023 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S367A220049 QUESTIONED COSTS $28,100 CONDITION A fiscal monitoring completed by the Arizona Department of Education in December 2024, covering fiscal year 2023, reported $28,100 in unallowable costs for therapeutic services, not outlined in the approved grant budget, and that the School is required to repay. CRITERIA In accordance with Title 2 of the Code of Federal Regulations, Subtitle A Office of Management and Budget Guidance for Grants and Agreements, Chapter II Office of Management and Budget Guidance, Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E -Cost Principles 200.403 Factors Affecting Allowability of Costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a. Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b. Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c. Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the recipient or subrecipient. d. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e. Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). g. Be adequately documented. See also §§ 200.300 through 200.309 of this part. h. Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). In accordance with OMB Compliance Supplement, Part 6 – Internal Control, 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. EFFECT Program requirements were not complied with. The School did not maintain adequate documentation of all costs charged to the federal program. CAUSE Internal controls were not designed appropriately to ensure that all charges to the federal grant were allowable. RECOMMENDATION AND BENEFIT A control system should be developed and implemented to ensure that documentation of all purchases charged to a federal program include only allowable costs and that the costs are included in the grant applications. Any reviews should be documented. This will help ensure that program requirements are complied. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Finding: 2024-01: Written Policies and Procedures Criteria: The Organization is required to have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively). Condition: The Organization did not have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E for the year ended June 30, 2024. Effect: While the Organization did not have written policies, procedures, or standards of conduct in accordance with 2 CFR 200, Subparts D and E during the year ended June 30, 2024, we are not aware of any instances of noncompliance with respect to activities allowed or unallowed, allowable costs/cost principles, cash management, period of performance procurement, suspension and debarment or reporting. Cause: Management was not aware of the requirement under 2 CFR 200, Subparts D and E requiring the Organization to have written policies, procedures and standards of conduct. Recommendation: We recommend that management of the Organization adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual to meet Federal compliance requirements.
Finding: 2024-01: Written Policies and Procedures Criteria: The Organization is required to have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively). Condition: The Organization did not have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E for the year ended June 30, 2024. Effect: While the Organization did not have written policies, procedures, or standards of conduct in accordance with 2 CFR 200, Subparts D and E during the year ended June 30, 2024, we are not aware of any instances of noncompliance with respect to activities allowed or unallowed, allowable costs/cost principles, cash management, period of performance procurement, suspension and debarment or reporting. Cause: Management was not aware of the requirement under 2 CFR 200, Subparts D and E requiring the Organization to have written policies, procedures and standards of conduct. Recommendation: We recommend that management of the Organization adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual to meet Federal compliance requirements.
CONDITION: During my review of the District’s compliance with the requirements of the Public-School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, were obtained for the following vendors: Pittsburgh Area Community Schools Deborah Coppula Allegheny Intermediate Unit CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 using federal funding. QUESTIONED COST: Pittsburgh Area Community Schools - $42,000, Deborah Coppula - $30,950, and Allegheny Intermediate Unit - $37,513 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements of the Public-School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, were obtained for the following vendors: Pittsburgh Area Community Schools Deborah Coppula Allegheny Intermediate Unit CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 using federal funding. QUESTIONED COST: Pittsburgh Area Community Schools - $42,000, Deborah Coppula - $30,950, and Allegheny Intermediate Unit - $37,513 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements of the Public-School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, were obtained for the following vendors: Pittsburgh Area Community Schools Deborah Coppula Allegheny Intermediate Unit CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 using federal funding. QUESTIONED COST: Pittsburgh Area Community Schools - $42,000, Deborah Coppula - $30,950, and Allegheny Intermediate Unit - $37,513 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements of the Public-School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, were obtained for the following vendors: Pittsburgh Area Community Schools Deborah Coppula Allegheny Intermediate Unit CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 using federal funding. QUESTIONED COST: Pittsburgh Area Community Schools - $42,000, Deborah Coppula - $30,950, and Allegheny Intermediate Unit - $37,513 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements of the Public-School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, were obtained for the following vendors: Pittsburgh Area Community Schools Deborah Coppula Allegheny Intermediate Unit CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 using federal funding. QUESTIONED COST: Pittsburgh Area Community Schools - $42,000, Deborah Coppula - $30,950, and Allegheny Intermediate Unit - $37,513 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Voyager Sopris Learning ($49,117) and Questeq ($70,549). This is a repeat procurement finding from (2023-004) from the previous fiscal year. CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $119,666 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendor –– Beaver Valley Intermediate Unit ($332,200). This is a repeat procurement finding from (2023-005) from the previous fiscal year.CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $332,200 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Voyager Sopris Learning ($49,117) and Questeq ($70,549). This is a repeat procurement finding from (2023-004) from the previous fiscal year. CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $119,666 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendor –– Beaver Valley Intermediate Unit ($332,200). This is a repeat procurement finding from (2023-005) from the previous fiscal year.CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $332,200 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Voyager Sopris Learning ($49,117) and Questeq ($70,549). This is a repeat procurement finding from (2023-004) from the previous fiscal year. CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $119,666 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendor –– Beaver Valley Intermediate Unit ($332,200). This is a repeat procurement finding from (2023-005) from the previous fiscal year.CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $332,200 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
Assistance Listing Number, Federal Agency, and Program Name - 93.323, U.S. Department of Health and Human Services, COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 2024 Pass through Entity - Wayne County Regional Educational Service Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.300(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 align with the 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). Per 2 CFR 200.403(g), costs must be adequately documented. Condition - The School District's controls did not prevent, or detect and correct in a timely manner, costs charged to the grant in excess of the related invoices. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A - Refer to context below. Context - In a sample of 13 non payroll related transactions, we identified 3 transactions where the costs charged to the grant exceeded the related invoices. The School District used a manual allocation process through a manual journal entry to charge expenses to the grant that resulted in the grant being charged $48,447 in excess of the supporting invoices. As of June 30, 2024, the School District had not yet requested reimbursement for the excess costs charged; the request was made and payment was received subsequent to year end. Upon identification of the error, the School District posted a manual journal entry to remove the duplicate costs of $48,447 from the grant fund and reduced the SEFA by this amount for the year ended June 30, 2024. The School District followed the guidance of the pass through entity provided subsequent to year end. Cause and Effect - Controls in place did not prevent, or detect and correct in a timely manner, an instance of noncompliance. The controls in place to verify that the manual adjusting journal entry was complete and accurate were not effective. As a result, the initial SEFA provided to the auditors was overstated by $48,447. The SEFA for the year ended June 30, 2024 was corrected. Recommendation - We recommend that the School District review its processes and controls to ensure the preparation and review of journal entries to charge costs to grant funds include a review for duplicate expenses. Views of Responsible Officials and Corrective Action Plan - The Grant Accounting team will develop a standard operating procedure on review and approval of journal entries. The Grant Account Team will provide training to Grant Compliance staff members on the defined process. Grant Compliance Senior Director and Assistant Director will be responsible for ensuring journal requests are submitted following the outlined operating procedure. Grant Accounting staff members will review submitted materials to ensure no invoice is overcharged and then process journal request.
REFERENCE: 2024-103 CFDA NUMBER 84.425D – COVID 19 – EDUCATION STABILIZATION FUND CFDA NUMBER 84.425U – COVID 19 – EDUCATION STABILIZATION FUND U.S. DEPARTMENT OF EDUCATION – 2022 U.S. DEPARTMENT OF EDUCATION – 2023 U.S. DEPARTMENT OF EDUCATION – 2024 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBERS: S425D200038, S425D210038, S425U2100038 QUESTIONED COSTS N/A CONDITION For of 3 of 60 non-payroll transactions tested, documentation was not available to demonstrate that the cost was allowable and approved in the final grant application. The costs were removed from the completion report approved by the Arizona Department of Education on December 19, 2024. Additionally, a fiscal monitoring completed by the Arizona Department of Education in December 2024, that covered the period of March 15, 2020 through September 30, 2023, reported the following unallowable costs, associated with Education Stabilization Funds grants, that the School is required to repay. • $4,982.34 (ESSER I) for continual internet and phone services not included in the approved grant budget; • $547.82 (ESSER I) for an online foreign language program not included in the approved grant budget; • $631.14 (ESSER II) for outdoor play equipment not included in the approved grant budget. • $3,000.00 (ESSER II) for contracted technical coach services not approved in the approved grant budget. The total known questioned costs are $9,161.30. CRITERIA In accordance with OMB Compliance Supplement, Part 6 – Internal Control, 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. In accordance with Title 2 of the Code of Federal Regulations, Subtitle A Office of Management and Budget Guidance for Grants and Agreements, Chapter II Office of Management and Budget Guidance, Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E -Cost Principles 200.403 Factors Affecting Allowability of Costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a. Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b. Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c. Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the recipient or subrecipient. d. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e. Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). g. Be adequately documented. See also §§ 200.300 through 200.309 of this part. h. Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). EFFECT Program requirements were not complied with. The School did not maintain adequate documentation of all costs charged to the federal program. CAUSE Internal controls were not designed appropriately to ensure that all charges to the federal grant were allowable. RECOMMENDATION AND BENEFIT A control system should be developed and implemented to ensure that documentation of all purchases charged to a federal program include only allowable costs and that the costs are included in the grant applications. Any reviews should be documented. This will help ensure that program requirements are complied. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
REFERENCE: 2024-102 CFDA NUMBER 84.367 – IMPROVING TEACHER QUALITY U.S. DEPARTMENT OF EDUCATION – 2023 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S367A220049 QUESTIONED COSTS $28,100 CONDITION A fiscal monitoring completed by the Arizona Department of Education in December 2024, covering fiscal year 2023, reported $28,100 in unallowable costs for therapeutic services, not outlined in the approved grant budget, and that the School is required to repay. CRITERIA In accordance with Title 2 of the Code of Federal Regulations, Subtitle A Office of Management and Budget Guidance for Grants and Agreements, Chapter II Office of Management and Budget Guidance, Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E -Cost Principles 200.403 Factors Affecting Allowability of Costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a. Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b. Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c. Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the recipient or subrecipient. d. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e. Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). g. Be adequately documented. See also §§ 200.300 through 200.309 of this part. h. Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). In accordance with OMB Compliance Supplement, Part 6 – Internal Control, 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. EFFECT Program requirements were not complied with. The School did not maintain adequate documentation of all costs charged to the federal program. CAUSE Internal controls were not designed appropriately to ensure that all charges to the federal grant were allowable. RECOMMENDATION AND BENEFIT A control system should be developed and implemented to ensure that documentation of all purchases charged to a federal program include only allowable costs and that the costs are included in the grant applications. Any reviews should be documented. This will help ensure that program requirements are complied. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Finding: 2024-01: Written Policies and Procedures Criteria: The Organization is required to have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively). Condition: The Organization did not have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E for the year ended June 30, 2024. Effect: While the Organization did not have written policies, procedures, or standards of conduct in accordance with 2 CFR 200, Subparts D and E during the year ended June 30, 2024, we are not aware of any instances of noncompliance with respect to activities allowed or unallowed, allowable costs/cost principles, cash management, period of performance procurement, suspension and debarment or reporting. Cause: Management was not aware of the requirement under 2 CFR 200, Subparts D and E requiring the Organization to have written policies, procedures and standards of conduct. Recommendation: We recommend that management of the Organization adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual to meet Federal compliance requirements.
Finding: 2024-01: Written Policies and Procedures Criteria: The Organization is required to have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively). Condition: The Organization did not have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E for the year ended June 30, 2024. Effect: While the Organization did not have written policies, procedures, or standards of conduct in accordance with 2 CFR 200, Subparts D and E during the year ended June 30, 2024, we are not aware of any instances of noncompliance with respect to activities allowed or unallowed, allowable costs/cost principles, cash management, period of performance procurement, suspension and debarment or reporting. Cause: Management was not aware of the requirement under 2 CFR 200, Subparts D and E requiring the Organization to have written policies, procedures and standards of conduct. Recommendation: We recommend that management of the Organization adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual to meet Federal compliance requirements.
CONDITION: During my review of the District’s compliance with the requirements of the Public-School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, were obtained for the following vendors: Pittsburgh Area Community Schools Deborah Coppula Allegheny Intermediate Unit CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 using federal funding. QUESTIONED COST: Pittsburgh Area Community Schools - $42,000, Deborah Coppula - $30,950, and Allegheny Intermediate Unit - $37,513 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements of the Public-School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, were obtained for the following vendors: Pittsburgh Area Community Schools Deborah Coppula Allegheny Intermediate Unit CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 using federal funding. QUESTIONED COST: Pittsburgh Area Community Schools - $42,000, Deborah Coppula - $30,950, and Allegheny Intermediate Unit - $37,513 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements of the Public-School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, were obtained for the following vendors: Pittsburgh Area Community Schools Deborah Coppula Allegheny Intermediate Unit CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 using federal funding. QUESTIONED COST: Pittsburgh Area Community Schools - $42,000, Deborah Coppula - $30,950, and Allegheny Intermediate Unit - $37,513 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements of the Public-School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, were obtained for the following vendors: Pittsburgh Area Community Schools Deborah Coppula Allegheny Intermediate Unit CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 using federal funding. QUESTIONED COST: Pittsburgh Area Community Schools - $42,000, Deborah Coppula - $30,950, and Allegheny Intermediate Unit - $37,513 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements of the Public-School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, were obtained for the following vendors: Pittsburgh Area Community Schools Deborah Coppula Allegheny Intermediate Unit CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 using federal funding. QUESTIONED COST: Pittsburgh Area Community Schools - $42,000, Deborah Coppula - $30,950, and Allegheny Intermediate Unit - $37,513 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, and 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Voyager Sopris Learning ($49,117) and Questeq ($70,549). This is a repeat procurement finding from (2023-004) from the previous fiscal year. CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $119,666 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendor –– Beaver Valley Intermediate Unit ($332,200). This is a repeat procurement finding from (2023-005) from the previous fiscal year.CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $332,200 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Voyager Sopris Learning ($49,117) and Questeq ($70,549). This is a repeat procurement finding from (2023-004) from the previous fiscal year. CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $119,666 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendor –– Beaver Valley Intermediate Unit ($332,200). This is a repeat procurement finding from (2023-005) from the previous fiscal year.CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $332,200 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Voyager Sopris Learning ($49,117) and Questeq ($70,549). This is a repeat procurement finding from (2023-004) from the previous fiscal year. CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $119,666 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendor –– Beaver Valley Intermediate Unit ($332,200). This is a repeat procurement finding from (2023-005) from the previous fiscal year.CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $332,200 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
Federal program: ALN 21.011 - Capital Magnet Fund Federal award grant numbers and years: 211CM058790 - 2021; 201CM055174-2020 Federal agency: Department of Treasury - Community Development Financial Institutions Pass-through entity: None Criteria: The Authority is required to comploy with 2 CFR Subpart D 200.300 (b) which indicates that a non-Federal entity is responsible for complying with Federal Funding Accountability and Transparency Act (FFATA). FFATA requires prime grant recipients to file a FFATA sub-award report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition: During our testing of the reporting requirements, we noted subawards to subrecipients where the FFATA sub-award report was not filed timely. The amount of subawards required to be reported were $1,985,000. Subsequent to year end, the Authority prepared and submitted the FFATA sub-award reports. Cause: The Authority did not realize the FFATA reporting requirement was in addition to the performance reporting that the Authority was in compliance with and and adhering to. Effect: Potential loss or suspension of grant funding. Questioned costs: None Prevalance: The population of first-tier subawards subject to reporting requirements included in subawards. The sample size of two was determined using guidance in the American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guide - Government Auditing Standards and Single Audits. Our sample was not a statistical sample. Recommendation: We recommend the Authority implement procedures to comply with the requirements of FFATA. View of responsible officials of the auditee: Management agrees with the above finding and our response is included in the corrective action plan.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Condition and Context Recipients may use COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021 and amended by the Consolidated Appropriations Act of 2023. The SLFRF program provides substantial flexibility for each recipient to meet local needs within seven separate eligible use categories. Recipients may use SLFRF funds to: Respond to the COVID-19 public health emergency and its negative economic impacts; Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work; Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient; Make necessary investments in water, sewer, or broadband infrastructure; Provide emergency relief from natural disasters or their negative economic impacts; Fund eligible Surface Transportation projects; and Fund Title I projects that are eligible activities under the Community Development Block Grant and Indiana Community Development Block Grant programs. As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The City did not properly design or implement such a system. The City elected to receive the standard revenue loss allowance, allowing it to claim its total SLFRF allocation of $2,290,914 as revenue loss to use for government services. The allocated funds may only be used to cover costs incurred from the period beginning on March 3, 2021, and ending on December 31, 2024. Obligations for costs incurred are required to be liquidated no later than December 31, 2026 (the end of the period of performance). During the audit period, the City completed three separate transfers of SLFRF funds from the ARPA Coronavirus Local Fiscal fund to the Comm Crossing Grant Fund and Water Utility-Operating funds, totaling $976,431 and $494,159, respectively. The transfers allowed for federal grant funds to be commingled with other grant and operating funds. Subsequently, expenditures were disbursed from the Comm Crossing Grant Fund and Water Utility-Operating funds. However, since the transfer of SLFRF funds into the Comm Crossing Grant Fund and Water Utility-Operating funds commingled receipts, and the City did not ensure there was an appropriate system of internal controls in place to account for the federal expenditures separately from other grant and operating expenditures, we were unable to determine a complete population of federal expenditures. Without a complete population of expenditures, we were unable to determine the City's compliance with the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. As such, the $976,431 and $494,159 transferred from the ARPA Coronavirus Local Fiscal fund are considered questioned costs. The lack of internal controls and appropriate documentation to test the compliance requirements was isolated to the situation described above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." Cause Due to the lack of internal controls, the City was unable to differentiate expenditures made from federal and nonfederal funds once it commingled other grant, operating, and federal grant awards into a single fund within its ledger without consideration of the need to separately identify and account for federal expenditures. Effect Without the proper implementation of an effectively designed system of internal controls, the Town cannot identify the expenditures paid with federal grant funds. As such the Town cannot ensure nor can we determine that expenditures of the grant were not unallowable and fell within the period of performance. Questioned Costs We identified $1,470,590 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that management of the City establish a system of internal controls to ensure that grant award funds are accounted for and tracked in a designated grant fund. All activity of the grant should be in this fund with supporting documentation for each transaction. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding: 2023-01: Written Policies and Procedures Criteria: The Organization is required to have written policies, procedures, and standards of conduct in accordance with 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively). Condition: The Organization did not have written policies, procedures, and standards of conduct in accordance with 2 CFR 200, Subparts D and E for the year ended December 31, 2023. Effect: While the Organization did not have written policies, procedures, or standards of conduct in accordance with 2 CFR 200, Subparts D and E during the year ended December 31, 2023, we are not aware of any instances of noncompliance with respect to activities allowed or unallowed or allowable costs/cost principles. Cause: Management was not aware of the requirement under 2 CFR 200, Subparts D and E requiring the Organization to have written policies, procedures and standards of conduct. Recommendation: We recommend that management of the Organization adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual to meet Federal compliance requirements.
Federal Agency: Department of Justice Federal Assistance Listing Number: 16.756 Program: Court Appointed Special Advocates Award Number: 15JDP-21-GK-02762-CASA Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: a) Be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). g) Be adequately documented. See also §200.300 through §200.309. h) Cost must be incurred during the approved budget period. The federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: National CASA/GAL allocated expenditures to programs during 2023 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding salaries), we noted in accordance with §200.403(g) that: • 4 of 60 transactions was partially charged in the incorrect fiscal period, though within the period of performance. The cost of these 4 transactions were $5,246. • 2 of 60 transactions had an error in the allocation rate utilized. The cost of these 8 transactions were $33. • 4 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. Cause: National CASA/GAL did not have procedures in place to document, and maintain the documentation of, the review and approval of the allocation methodology and the allocation of costs (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, National CASA/GAL could incorrectly charge expenditures to the federal programs. Known Questioned Costs: $5,279 Likely Questioned Costs: $131,271 Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs in 2023 were $3,612,154. The sample tested consisted of 60 transactions totaling $145,247. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: 2022-004 and 2022-008. Recommendation: We recommend that policies and procedures be updated to ensure underlying support, as well as support for allocations, is appropriately maintained as required by §200.403. Views of Responsible Officials: Management concurs with the finding that documentation of support and allocation of costs should be maintained. Policies and procedures were enhanced in 2023 and through 2024 to ensure compliance.
Finding: 2023-01: Written Policies and Procedures Criteria: The Organization is required to have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively). Condition: The Organization did not have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E for the year ended December 31, 2023. Effect: While the Organization did not have written policies, procedures, or standards of conduct in accordance with 2 CFR 200, Subparts D and E during the year ended December 31, 2023, we are not aware of any instances of noncompliance with respect to activities allowed or unallowed, allowable costs/cost principles, cash management, period of performance or reporting. Cause: Management was not aware of the requirement under 2 CFR 200, Subparts D and E requiring the Organization to have written policies, procedures and standards of conduct. Recommendation: We recommend that management of the Organization adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual to meet Federal compliance requirements.
Finding: 2023-01: Written Policies and Procedures Criteria: The Organization is required to have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively). Condition: The Organization did not have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E for the year ended December 31, 2023. Effect: While the Organization did not have written policies, procedures, or standards of conduct in accordance with 2 CFR 200, Subparts D and E during the year ended December 31, 2023, we are not aware of any instances of noncompliance with respect to activities allowed or unallowed, allowable costs/cost principles, cash management, period of performance or reporting. Cause: Management was not aware of the requirement under 2 CFR 200, Subparts D and E requiring the Organization to have written policies, procedures and standards of conduct. Recommendation: We recommend that management of the Organization adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual to meet Federal compliance requirements.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): PO 20011717 Pass-Through Entity: Indiana State Department of Health Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context The County Department of Health, a department within the County, was awarded the Health Issues and Challenges grant through the Indiana State Department of Health financed through the American Rescue Plan Act for the purpose of funding programs that focus on the improvement of chronic disease, specifically, elevated blood lead level reduction. The Health Issues and Challenges grant is a reimbursable grant, whereby the County received reimbursement on a per-case basis at a stated rate for Case Management and Environmental Investigation activities performed. The County Department of Health received federal receipts related to the grant in the amount of $130,479 during 2023. As part of sound management of the federal award, the County Department of Health was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The County Department of Health did not properly design or implement such a system. Receipts of the program were adequately identified through the use of an account number within the County Health Fund (285) in the County's ledger (ledger) which was unique to the Health Issues and Challenges grant receipts. However, the ledger did not adequately identify the expenditures of the grant program within the County Health Fund. Through inquiry with the County Department of Health employees and review of unit-prepared support of grant expenditures, we determined expenditures were made with grant funds during the audit period; however, we were unable to distinguish between the expenditures of the Health Issues and Challenges grant and all other activities of the County Department of Health in the County Health fund. Due to the lack of separate identification of expenditures in the financial records, we were not able to establish a population from which to audit the Health Issues and Challenges grant for compliance with the following compliance requirements of the program: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance Procurement and Suspension and Debarment As such, the full award amount of $130,479, as reported on the Schedule of Expenditures of Federal Awards, was determined to be questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." Cause The County Department of Health was unable to differentiate expenditures made from federal and non-federal funds within its ledger for the Heath Issues and Challenges grant. Effect Without the proper implementation of an effectively designed system of internal controls, a population of expenditures associated with the Health Issues and Challenges grant could not be determined. As such, the County Department of Health cannot ensure nor can we determine that expenditures of the grant were not unallowable, within the proper period, and adhered to established practices and policies. Questioned Costs We identified $130,479 in known questioned costs as noted in the Condition and Context. Recommendation We recommended that management of the County Department of Health establish a system of internal controls to ensure that grant award funds are adequately accounted for and tracked in such a manner as to determine the activity, receipts, and disbursements associated with the grant. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2 CFR § 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR § 200.303(a) which requires that 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. 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). 2 CFR § 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR § 200.403 which states except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). State ex rel. McClure v. Hagerman, 155 Ohio St. 320 (1951) provides that expenditures made by a governmental unit should serve a public purpose. Typically, the determination of what constitutes a “proper public purpose” rests with the judgment of the governmental entity, unless such determination is arbitrary or unreasonable. Even if a purchase is reasonable, Ohio Attorney General Opinion 82-006 indicates that it must be memorialized by a duly enacted ordinance or resolution and may have a prospective effect only. Auditor of State Bulletin 2003-005 Expenditure of Public Funds/Proper “Public Purpose” states, in part, the Auditor of State’s Office will only question expenditures where the legislative determination of a public purpose is manifestly arbitrary and incorrect. The Lima-Allen County Regional Planning Commission, administrator of the Community Housing Impact and Preservation Program - CHIP (#B-C-21-1AB-1) for Allen County, incurred a charge of $4,386 for Admin January 2023 charges on invoice #106558 dated February 7, 2023 from the Great Lakes Community Action Partnership. On July 6, 2023, check number 7330652 was issued by Allen County which included payment of $4,386 on invoice number 106558. On August 3, 2023, check number 7332670 was issued by Allen County which included payment of $4,386 on invoice number 106558 which was approved by Tara Bales, Executive Director of the Lima-Allen County Regional Planning Commission. As a result, possibly due to the failure of an existing control or procedure, invoice number 106558 was paid twice resulting an overpayment of $4,386. On October 2, 2024, the Great Lakes Community Action Partnership refunded the overpayment with check number 20765 in the amount of $4,386. This refund was recorded in the Community Development Grant Fund (2414). The Lima-Allen County Regional Planning Commission should implement an additional control(s) and/or procedure(s) to prevent the duplicate payment of invoices.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): PO 20011717 Pass-Through Entity: Indiana State Department of Health Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context The County Department of Health, a department within the County, was awarded the Health Issues and Challenges grant through the Indiana State Department of Health financed through the American Rescue Plan Act for the purpose of funding programs that focus on the improvement of chronic disease, specifically, elevated blood lead level reduction. The Health Issues and Challenges grant is a reimbursable grant, whereby the County received reimbursement on a per-case basis at a stated rate for Case Management and Environmental Investigation activities performed. The County Department of Health received federal receipts related to the grant in the amount of $130,479 during 2023. As part of sound management of the federal award, the County Department of Health was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The County Department of Health did not properly design or implement such a system. Receipts of the program were adequately identified through the use of an account number within the County Health Fund (285) in the County's ledger (ledger) which was unique to the Health Issues and Challenges grant receipts. However, the ledger did not adequately identify the expenditures of the grant program within the County Health Fund. Through inquiry with the County Department of Health employees and review of unit-prepared support of grant expenditures, we determined expenditures were made with grant funds during the audit period; however, we were unable to distinguish between the expenditures of the Health Issues and Challenges grant and all other activities of the County Department of Health in the County Health fund. Due to the lack of separate identification of expenditures in the financial records, we were not able to establish a population from which to audit the Health Issues and Challenges grant for compliance with the following compliance requirements of the program: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance Procurement and Suspension and Debarment As such, the full award amount of $130,479, as reported on the Schedule of Expenditures of Federal Awards, was determined to be questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." Cause The County Department of Health was unable to differentiate expenditures made from federal and non-federal funds within its ledger for the Heath Issues and Challenges grant. Effect Without the proper implementation of an effectively designed system of internal controls, a population of expenditures associated with the Health Issues and Challenges grant could not be determined. As such, the County Department of Health cannot ensure nor can we determine that expenditures of the grant were not unallowable, within the proper period, and adhered to established practices and policies. Questioned Costs We identified $130,479 in known questioned costs as noted in the Condition and Context. Recommendation We recommended that management of the County Department of Health establish a system of internal controls to ensure that grant award funds are adequately accounted for and tracked in such a manner as to determine the activity, receipts, and disbursements associated with the grant. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Federal program: ALN 21.011 - Capital Magnet Fund Federal award grant numbers and years: 211CM058790 - 2021; 201CM055174-2020 Federal agency: Department of Treasury - Community Development Financial Institutions Pass-through entity: None Criteria: The Authority is required to comploy with 2 CFR Subpart D 200.300 (b) which indicates that a non-Federal entity is responsible for complying with Federal Funding Accountability and Transparency Act (FFATA). FFATA requires prime grant recipients to file a FFATA sub-award report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition: During our testing of the reporting requirements, we noted subawards to subrecipients where the FFATA sub-award report was not filed timely. The amount of subawards required to be reported were $1,985,000. Subsequent to year end, the Authority prepared and submitted the FFATA sub-award reports. Cause: The Authority did not realize the FFATA reporting requirement was in addition to the performance reporting that the Authority was in compliance with and and adhering to. Effect: Potential loss or suspension of grant funding. Questioned costs: None Prevalance: The population of first-tier subawards subject to reporting requirements included in subawards. The sample size of two was determined using guidance in the American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guide - Government Auditing Standards and Single Audits. Our sample was not a statistical sample. Recommendation: We recommend the Authority implement procedures to comply with the requirements of FFATA. View of responsible officials of the auditee: Management agrees with the above finding and our response is included in the corrective action plan.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Condition and Context Recipients may use COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021 and amended by the Consolidated Appropriations Act of 2023. The SLFRF program provides substantial flexibility for each recipient to meet local needs within seven separate eligible use categories. Recipients may use SLFRF funds to: Respond to the COVID-19 public health emergency and its negative economic impacts; Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work; Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient; Make necessary investments in water, sewer, or broadband infrastructure; Provide emergency relief from natural disasters or their negative economic impacts; Fund eligible Surface Transportation projects; and Fund Title I projects that are eligible activities under the Community Development Block Grant and Indiana Community Development Block Grant programs. As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The City did not properly design or implement such a system. The City elected to receive the standard revenue loss allowance, allowing it to claim its total SLFRF allocation of $2,290,914 as revenue loss to use for government services. The allocated funds may only be used to cover costs incurred from the period beginning on March 3, 2021, and ending on December 31, 2024. Obligations for costs incurred are required to be liquidated no later than December 31, 2026 (the end of the period of performance). During the audit period, the City completed three separate transfers of SLFRF funds from the ARPA Coronavirus Local Fiscal fund to the Comm Crossing Grant Fund and Water Utility-Operating funds, totaling $976,431 and $494,159, respectively. The transfers allowed for federal grant funds to be commingled with other grant and operating funds. Subsequently, expenditures were disbursed from the Comm Crossing Grant Fund and Water Utility-Operating funds. However, since the transfer of SLFRF funds into the Comm Crossing Grant Fund and Water Utility-Operating funds commingled receipts, and the City did not ensure there was an appropriate system of internal controls in place to account for the federal expenditures separately from other grant and operating expenditures, we were unable to determine a complete population of federal expenditures. Without a complete population of expenditures, we were unable to determine the City's compliance with the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. As such, the $976,431 and $494,159 transferred from the ARPA Coronavirus Local Fiscal fund are considered questioned costs. The lack of internal controls and appropriate documentation to test the compliance requirements was isolated to the situation described above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." Cause Due to the lack of internal controls, the City was unable to differentiate expenditures made from federal and nonfederal funds once it commingled other grant, operating, and federal grant awards into a single fund within its ledger without consideration of the need to separately identify and account for federal expenditures. Effect Without the proper implementation of an effectively designed system of internal controls, the Town cannot identify the expenditures paid with federal grant funds. As such the Town cannot ensure nor can we determine that expenditures of the grant were not unallowable and fell within the period of performance. Questioned Costs We identified $1,470,590 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that management of the City establish a system of internal controls to ensure that grant award funds are accounted for and tracked in a designated grant fund. All activity of the grant should be in this fund with supporting documentation for each transaction. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding: 2023-01: Written Policies and Procedures Criteria: The Organization is required to have written policies, procedures, and standards of conduct in accordance with 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively). Condition: The Organization did not have written policies, procedures, and standards of conduct in accordance with 2 CFR 200, Subparts D and E for the year ended December 31, 2023. Effect: While the Organization did not have written policies, procedures, or standards of conduct in accordance with 2 CFR 200, Subparts D and E during the year ended December 31, 2023, we are not aware of any instances of noncompliance with respect to activities allowed or unallowed or allowable costs/cost principles. Cause: Management was not aware of the requirement under 2 CFR 200, Subparts D and E requiring the Organization to have written policies, procedures and standards of conduct. Recommendation: We recommend that management of the Organization adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual to meet Federal compliance requirements.
Federal Agency: Department of Justice Federal Assistance Listing Number: 16.756 Program: Court Appointed Special Advocates Award Number: 15JDP-21-GK-02762-CASA Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: a) Be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). g) Be adequately documented. See also §200.300 through §200.309. h) Cost must be incurred during the approved budget period. The federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: National CASA/GAL allocated expenditures to programs during 2023 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding salaries), we noted in accordance with §200.403(g) that: • 4 of 60 transactions was partially charged in the incorrect fiscal period, though within the period of performance. The cost of these 4 transactions were $5,246. • 2 of 60 transactions had an error in the allocation rate utilized. The cost of these 8 transactions were $33. • 4 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. Cause: National CASA/GAL did not have procedures in place to document, and maintain the documentation of, the review and approval of the allocation methodology and the allocation of costs (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, National CASA/GAL could incorrectly charge expenditures to the federal programs. Known Questioned Costs: $5,279 Likely Questioned Costs: $131,271 Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs in 2023 were $3,612,154. The sample tested consisted of 60 transactions totaling $145,247. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: 2022-004 and 2022-008. Recommendation: We recommend that policies and procedures be updated to ensure underlying support, as well as support for allocations, is appropriately maintained as required by §200.403. Views of Responsible Officials: Management concurs with the finding that documentation of support and allocation of costs should be maintained. Policies and procedures were enhanced in 2023 and through 2024 to ensure compliance.
Finding: 2023-01: Written Policies and Procedures Criteria: The Organization is required to have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively). Condition: The Organization did not have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E for the year ended December 31, 2023. Effect: While the Organization did not have written policies, procedures, or standards of conduct in accordance with 2 CFR 200, Subparts D and E during the year ended December 31, 2023, we are not aware of any instances of noncompliance with respect to activities allowed or unallowed, allowable costs/cost principles, cash management, period of performance or reporting. Cause: Management was not aware of the requirement under 2 CFR 200, Subparts D and E requiring the Organization to have written policies, procedures and standards of conduct. Recommendation: We recommend that management of the Organization adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual to meet Federal compliance requirements.
Finding: 2023-01: Written Policies and Procedures Criteria: The Organization is required to have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively). Condition: The Organization did not have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E for the year ended December 31, 2023. Effect: While the Organization did not have written policies, procedures, or standards of conduct in accordance with 2 CFR 200, Subparts D and E during the year ended December 31, 2023, we are not aware of any instances of noncompliance with respect to activities allowed or unallowed, allowable costs/cost principles, cash management, period of performance or reporting. Cause: Management was not aware of the requirement under 2 CFR 200, Subparts D and E requiring the Organization to have written policies, procedures and standards of conduct. Recommendation: We recommend that management of the Organization adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual to meet Federal compliance requirements.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): PO 20011717 Pass-Through Entity: Indiana State Department of Health Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context The County Department of Health, a department within the County, was awarded the Health Issues and Challenges grant through the Indiana State Department of Health financed through the American Rescue Plan Act for the purpose of funding programs that focus on the improvement of chronic disease, specifically, elevated blood lead level reduction. The Health Issues and Challenges grant is a reimbursable grant, whereby the County received reimbursement on a per-case basis at a stated rate for Case Management and Environmental Investigation activities performed. The County Department of Health received federal receipts related to the grant in the amount of $130,479 during 2023. As part of sound management of the federal award, the County Department of Health was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The County Department of Health did not properly design or implement such a system. Receipts of the program were adequately identified through the use of an account number within the County Health Fund (285) in the County's ledger (ledger) which was unique to the Health Issues and Challenges grant receipts. However, the ledger did not adequately identify the expenditures of the grant program within the County Health Fund. Through inquiry with the County Department of Health employees and review of unit-prepared support of grant expenditures, we determined expenditures were made with grant funds during the audit period; however, we were unable to distinguish between the expenditures of the Health Issues and Challenges grant and all other activities of the County Department of Health in the County Health fund. Due to the lack of separate identification of expenditures in the financial records, we were not able to establish a population from which to audit the Health Issues and Challenges grant for compliance with the following compliance requirements of the program: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance Procurement and Suspension and Debarment As such, the full award amount of $130,479, as reported on the Schedule of Expenditures of Federal Awards, was determined to be questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." Cause The County Department of Health was unable to differentiate expenditures made from federal and non-federal funds within its ledger for the Heath Issues and Challenges grant. Effect Without the proper implementation of an effectively designed system of internal controls, a population of expenditures associated with the Health Issues and Challenges grant could not be determined. As such, the County Department of Health cannot ensure nor can we determine that expenditures of the grant were not unallowable, within the proper period, and adhered to established practices and policies. Questioned Costs We identified $130,479 in known questioned costs as noted in the Condition and Context. Recommendation We recommended that management of the County Department of Health establish a system of internal controls to ensure that grant award funds are adequately accounted for and tracked in such a manner as to determine the activity, receipts, and disbursements associated with the grant. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2 CFR § 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR § 200.303(a) which requires that 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. 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). 2 CFR § 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR § 200.403 which states except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). State ex rel. McClure v. Hagerman, 155 Ohio St. 320 (1951) provides that expenditures made by a governmental unit should serve a public purpose. Typically, the determination of what constitutes a “proper public purpose” rests with the judgment of the governmental entity, unless such determination is arbitrary or unreasonable. Even if a purchase is reasonable, Ohio Attorney General Opinion 82-006 indicates that it must be memorialized by a duly enacted ordinance or resolution and may have a prospective effect only. Auditor of State Bulletin 2003-005 Expenditure of Public Funds/Proper “Public Purpose” states, in part, the Auditor of State’s Office will only question expenditures where the legislative determination of a public purpose is manifestly arbitrary and incorrect. The Lima-Allen County Regional Planning Commission, administrator of the Community Housing Impact and Preservation Program - CHIP (#B-C-21-1AB-1) for Allen County, incurred a charge of $4,386 for Admin January 2023 charges on invoice #106558 dated February 7, 2023 from the Great Lakes Community Action Partnership. On July 6, 2023, check number 7330652 was issued by Allen County which included payment of $4,386 on invoice number 106558. On August 3, 2023, check number 7332670 was issued by Allen County which included payment of $4,386 on invoice number 106558 which was approved by Tara Bales, Executive Director of the Lima-Allen County Regional Planning Commission. As a result, possibly due to the failure of an existing control or procedure, invoice number 106558 was paid twice resulting an overpayment of $4,386. On October 2, 2024, the Great Lakes Community Action Partnership refunded the overpayment with check number 20765 in the amount of $4,386. This refund was recorded in the Community Development Grant Fund (2414). The Lima-Allen County Regional Planning Commission should implement an additional control(s) and/or procedure(s) to prevent the duplicate payment of invoices.