Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award 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 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (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 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I amount reported on the Year 3 report ($266,367) did not agree to the underlying expenditure record ($96,019) for the period of July 1, 2021 through June 30, 2022. Additionally, the ESSER II and ESSER III amount reported on the Year 2 report ($1,433,207, and $643,771, respectively) did not agree to the underlying expenditure records ($1,400,698, and $630,465 respectively) for the period of July 1, 2021 through June 30, 2022. We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($4,291 and $1,522,378, respectively) did not agree to the underlying expenditure records ($4,590 and $1,774,722, respectively) for the period of July 1, 2022 through June 30, 2023. Additionally, the School Corporation was not able to provide any support for the 288 full-time equivalent (FTE) positions on September 30, 2022, reported on the Year 2 CrossAct report or the 338 full-time equivalent (FTE) positions on September 30, 2023, reported on the Year 3 CrossAct report. Crowe also noted that the School Corporation reported 0 full-time equivalent (FTE) positions paid by ESSER on September 2023, but there were ESSER positions reported in the ESSER applications. Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award 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 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (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 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I amount reported on the Year 3 report ($266,367) did not agree to the underlying expenditure record ($96,019) for the period of July 1, 2021 through June 30, 2022. Additionally, the ESSER II and ESSER III amount reported on the Year 2 report ($1,433,207, and $643,771, respectively) did not agree to the underlying expenditure records ($1,400,698, and $630,465 respectively) for the period of July 1, 2021 through June 30, 2022. We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($4,291 and $1,522,378, respectively) did not agree to the underlying expenditure records ($4,590 and $1,774,722, respectively) for the period of July 1, 2022 through June 30, 2023. Additionally, the School Corporation was not able to provide any support for the 288 full-time equivalent (FTE) positions on September 30, 2022, reported on the Year 2 CrossAct report or the 338 full-time equivalent (FTE) positions on September 30, 2023, reported on the Year 3 CrossAct report. Crowe also noted that the School Corporation reported 0 full-time equivalent (FTE) positions paid by ESSER on September 2023, but there were ESSER positions reported in the ESSER applications. Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-004 Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award 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 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (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 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Management misinterpreted the instructions for the reporting requirements and believed that they did not need to fill in the expense information as an LEA. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit one Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II amount reported for the reports covering the FY23 time period ($4,934,473) did not agree to the underlying expenditure records ($4,801,053) for the period of July 1, 2022 through June 30, 2023. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2023-006. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2024-032 - Inadequate Controls over and Noncompliance with Federal Financial Reporting State Entity: Louisiana Department of Health - Office of Public Health (OPH) Award Year: 2024 Award Number: NU90TP922016 Compliance Requirement: Reporting Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: The Louisiana Department of Health - Office of Public Health (OPH) did not have adequate controls in place to ensure that federal financial reports were accurate, current, and complete prior to being submitted to the federal agency for the Public Health Emergency Preparedness federal program for the June 30, 2024 reporting period. OPH's annual report for the reporting period June 30, 2024 improperly included expenditures totaling $146,598 from the period July 2024 through September 2024. Criteria: 2 CFR 200.302(b)(2) states accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements set forth in 2 CFR 200.328 and 200.329 is required. In addition, the U.S. Centers for Disease Control and Prevention guidance indicates that the report must include only those funds authorized and expended during the timeframe of the report. 2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: OPH did not have adequate controls in place to ensure the federal financial report only included expenditures for the period being reported prior to submission to the federal agency. Effect: Failure to establish adequate controls over financial reporting could result in inaccurate information being reported to the federal agency. Recommendation: OPH should design and implement controls to ensure all information contained in the financial reports submitted to federal agencies is accurate, current, and complete for the reporting period covered under the report. Management’s Response and Corrective Action Plan: Management did not concur with the finding stating that the amount in question is immaterial and does not misstate the federal financial report. To address the control weakness, management provided a corrective action plan (B-36).
2024-024 - Inadequate Controls over Reporting and Matching Federal Compliance Requirements for the Medicaid and Children's Health Insurance Programs State Entity: Louisiana Department of Health (LDH) Award Years: 2023, 2024 Award Numbers: 2305LA5021, 2305LA5MAP, 2405LA5021, 2405LA5MAP Compliance Requirement: Matching, Level of Effort, Earmarking; Reporting Repeat Finding: Yes (Prior Year Finding No. 2023-022) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the second consecutive year, LDH did not have adequate controls in place to ensure compliance with reporting and matching requirements for the Medical Assistance Program (Medicaid) and the Children’s Health Insurance Program (CHIP) for all four quarters of fiscal year 2024. The following errors were noted throughout the Centers for Medicare and Medicaid Services (CMS) quarterly federal expenditure reports prepared by LDH: • For each quarter of fiscal year 2024, quarterly adjustment expenditures were either incorrectly recorded on the CMS quarterly federal expenditure reports and/or within the financial statements. • For both the March 31, 2024 and June 30, 2024 reports LDH incorrectly completed the Medicaid Drug Rebate Schedule 64.9R. For the March 31, 2024 report, an invoice amount of $0 was reported as the rebates invoiced in this quarter rather than the correct amount of $243,910,667. For the June 30, 2024 report, LDH incorrectly adjusted the schedule 64.9R resulting in numerous errors and a net understatement of $220,130,454 in an effort to correct the error from the March 31, 2024 report. • LDH incorrectly overstated federal fiscal year 2023 Disproportionate State Hospital (DSH) payments by $820,395 on schedule 64.9D for the September 30, 2023 report. Criteria: According to 2 CFR 200.302(b)(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 is required. The Medicaid and CHIP programs require quarterly reporting to CMS detailing expenditures by category of service for which states are entitled to federal reimbursement. The federal expenditures reported in the quarterly reports are used to reconcile the draws of federal funds. In addition, a good system of internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements. Cause: LDH did not have adequate controls in place to ensure the reconciliation of the expenditures recorded in LDH’s financial statements to the expenditures reported to CMS. In addition, the quarterly adjustments were not properly reviewed to ensure that adjustments affecting the financial statements were properly recorded. Effect: As a result, LDH failed to detect multiple errors between the financial statements and CMS quarterly federal expenditure reports, as well as errors on various schedules in the quarterly reports. Uncorrected errors in the reports increase the risk that federal funds will be overdrawn or underdrawn and place LDH in noncompliance with federal regulations. Recommendation: LDH management should strengthen controls over preparation and review of the quarterly federal expenditure reports and quarterly adjustments to ensure federal expenditures are accurately reported. In addition, LDH management should incorporate a reconciliation of federal expenditures in the financial statements to federal expenditures reported to CMS. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-17).
2024-024 - Inadequate Controls over Reporting and Matching Federal Compliance Requirements for the Medicaid and Children's Health Insurance Programs State Entity: Louisiana Department of Health (LDH) Award Years: 2023, 2024 Award Numbers: 2305LA5021, 2305LA5MAP, 2405LA5021, 2405LA5MAP Compliance Requirement: Matching, Level of Effort, Earmarking; Reporting Repeat Finding: Yes (Prior Year Finding No. 2023-022) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the second consecutive year, LDH did not have adequate controls in place to ensure compliance with reporting and matching requirements for the Medical Assistance Program (Medicaid) and the Children’s Health Insurance Program (CHIP) for all four quarters of fiscal year 2024. The following errors were noted throughout the Centers for Medicare and Medicaid Services (CMS) quarterly federal expenditure reports prepared by LDH: • For each quarter of fiscal year 2024, quarterly adjustment expenditures were either incorrectly recorded on the CMS quarterly federal expenditure reports and/or within the financial statements. • For both the March 31, 2024 and June 30, 2024 reports LDH incorrectly completed the Medicaid Drug Rebate Schedule 64.9R. For the March 31, 2024 report, an invoice amount of $0 was reported as the rebates invoiced in this quarter rather than the correct amount of $243,910,667. For the June 30, 2024 report, LDH incorrectly adjusted the schedule 64.9R resulting in numerous errors and a net understatement of $220,130,454 in an effort to correct the error from the March 31, 2024 report. • LDH incorrectly overstated federal fiscal year 2023 Disproportionate State Hospital (DSH) payments by $820,395 on schedule 64.9D for the September 30, 2023 report. Criteria: According to 2 CFR 200.302(b)(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 is required. The Medicaid and CHIP programs require quarterly reporting to CMS detailing expenditures by category of service for which states are entitled to federal reimbursement. The federal expenditures reported in the quarterly reports are used to reconcile the draws of federal funds. In addition, a good system of internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements. Cause: LDH did not have adequate controls in place to ensure the reconciliation of the expenditures recorded in LDH’s financial statements to the expenditures reported to CMS. In addition, the quarterly adjustments were not properly reviewed to ensure that adjustments affecting the financial statements were properly recorded. Effect: As a result, LDH failed to detect multiple errors between the financial statements and CMS quarterly federal expenditure reports, as well as errors on various schedules in the quarterly reports. Uncorrected errors in the reports increase the risk that federal funds will be overdrawn or underdrawn and place LDH in noncompliance with federal regulations. Recommendation: LDH management should strengthen controls over preparation and review of the quarterly federal expenditure reports and quarterly adjustments to ensure federal expenditures are accurately reported. In addition, LDH management should incorporate a reconciliation of federal expenditures in the financial statements to federal expenditures reported to CMS. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-17).
2024-024 - Inadequate Controls over Reporting and Matching Federal Compliance Requirements for the Medicaid and Children's Health Insurance Programs State Entity: Louisiana Department of Health (LDH) Award Years: 2023, 2024 Award Numbers: 2305LA5021, 2305LA5MAP, 2405LA5021, 2405LA5MAP Compliance Requirement: Matching, Level of Effort, Earmarking; Reporting Repeat Finding: Yes (Prior Year Finding No. 2023-022) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the second consecutive year, LDH did not have adequate controls in place to ensure compliance with reporting and matching requirements for the Medical Assistance Program (Medicaid) and the Children’s Health Insurance Program (CHIP) for all four quarters of fiscal year 2024. The following errors were noted throughout the Centers for Medicare and Medicaid Services (CMS) quarterly federal expenditure reports prepared by LDH: • For each quarter of fiscal year 2024, quarterly adjustment expenditures were either incorrectly recorded on the CMS quarterly federal expenditure reports and/or within the financial statements. • For both the March 31, 2024 and June 30, 2024 reports LDH incorrectly completed the Medicaid Drug Rebate Schedule 64.9R. For the March 31, 2024 report, an invoice amount of $0 was reported as the rebates invoiced in this quarter rather than the correct amount of $243,910,667. For the June 30, 2024 report, LDH incorrectly adjusted the schedule 64.9R resulting in numerous errors and a net understatement of $220,130,454 in an effort to correct the error from the March 31, 2024 report. • LDH incorrectly overstated federal fiscal year 2023 Disproportionate State Hospital (DSH) payments by $820,395 on schedule 64.9D for the September 30, 2023 report. Criteria: According to 2 CFR 200.302(b)(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 is required. The Medicaid and CHIP programs require quarterly reporting to CMS detailing expenditures by category of service for which states are entitled to federal reimbursement. The federal expenditures reported in the quarterly reports are used to reconcile the draws of federal funds. In addition, a good system of internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements. Cause: LDH did not have adequate controls in place to ensure the reconciliation of the expenditures recorded in LDH’s financial statements to the expenditures reported to CMS. In addition, the quarterly adjustments were not properly reviewed to ensure that adjustments affecting the financial statements were properly recorded. Effect: As a result, LDH failed to detect multiple errors between the financial statements and CMS quarterly federal expenditure reports, as well as errors on various schedules in the quarterly reports. Uncorrected errors in the reports increase the risk that federal funds will be overdrawn or underdrawn and place LDH in noncompliance with federal regulations. Recommendation: LDH management should strengthen controls over preparation and review of the quarterly federal expenditure reports and quarterly adjustments to ensure federal expenditures are accurately reported. In addition, LDH management should incorporate a reconciliation of federal expenditures in the financial statements to federal expenditures reported to CMS. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-17).
FINDING 2024-002 Subject: Title I Grants to Local Educational Agencies - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Number or Year (or Other Identifying Number): S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context Direct charges to a federal award are to be for allowable activities and allowable costs made in conformance with the applicable cost principles. The School Corporation did not have a process or internal controls in place to ensure expenditures for the 2021 Title I grant award were for allowable activities and costs and in conformance with the cost principles. The School Corporation was unable to provide supporting documentation for $43,141 worth of expenditures transferred out of the 2021 grant award fund 4121 from July 1, 2022 to December 1, 2022. These expenditures were originally expended from the Title I 2021 grant award fund 4121, requested for reimbursement and then the expenditures were moved to other funds. Because these expenditures were reappropriated, they were not an allowable activity or cost of the 2021 Title I grant award. In addition, the School Corporation was unable to provide supporting documentation for $6,646 worth of certified salary expenditures requested for reimbursement for the same grant award from February 17, 2022 to June 30, 2022. It was determined that this amount was double requested for reimbursement and were not an actual expenditure. The total amount of $49,787 was considered questioned costs. Subsequent to the 2021 Title I grant award, the School Corporation established and implemented a process and internal controls to ensure expenditures for the 2022 and 2023 awards from July 1, 2022 through December 31, 2023, were for allowable activities and costs and in conformance with the cost principles. The vendor expenditures are initiated by the Title I Director and the Title I Administrative Assistant. Payroll is reviewed each pay period by the Title I Administrative Assistant. The Business Manager/Treasurer prepares the reimbursement request using a detailed expenditure report from their accounting system. The Title I Administrative Assistant verifies the information entered into the reimbursement request by also comparing it to the detailed expenditure reports. The Title I Administrative Assistant also reconciles the Title I award to the expenditures. If the Title I Administrative Assistant identifies that a correction of errors needs to be made to a Title I fund, they fill out a Corrections Form. The Title I Director then reviews and signs the form and provides it to the Business Manager/Treasurer to make the correction in the accounting system prior to completing a request for reimbursement. After the corrections have been made, the Title I Administrative Assistant verifies the changes were correctly made. After all corrections are made, the reimbursement request is approved by the Title I Director and then submitted by the Business Manager/Treasurer. INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF STEUBEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) We tested 25 other nonjournal entry expenditures from all three Title I grant awards during the audit period and did not identify any additional noncompliance with these expenditures. The lack of internal controls and supporting documentation was isolated to the 2021 Title I grant award number S010A21001 from February 17, 2022 to December 31, 2022. 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 200.403 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. (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. . . . (g) Be adequately documented. . . ." 2 CFR 200.302(b) states in part: "The recipient's and subrecipient's financial management system must provide for the following: . . . (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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 METROPOLITAN SCHOOL DISTRICT OF STEUBEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation. The School Corporation segregated duties of knowledgeable staff that were involved in the process of purchasing, entering claim information, processing claim and payroll information and using reliable financial data from the accounting system. However, they had not established a process or internal controls, for the 2021 Title I award number S010A21001, to ensure that all accounting corrections were made prior to processing a request for reimbursement. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation could not ensure that only expenditures for allowable activities and costs were made and requested for reimbursement. Any program funds the School Corporation reallocated to other funds or double requested for reimbursement would be unallowable, and the awarding agency could potentially recover them. Questioned Costs Questioned costs in the amount of $49,787 were identified as noted in the Condition and Context. Recommendation We recommended that Management of the School Corporation establish a proper system of internal controls and develop written policies and procedures to ensure that expenditures for all Title I grant awards are for allowable activities and costs, in conformance with the cost principles and support for all expenditures and journal entries is maintained for the date ranges of costs documented on the requests for reimbursement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (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, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (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, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (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, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (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, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (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. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (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. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (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. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (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. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (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. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (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. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (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. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (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. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (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. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding Number: 2024-004 Agency: Department of Health & Human Services Federal Program: Immunization Cooperative Agreement ALN: 93.268 Grant Number: Various Compliance Requirement: Cash Management Category: Significant Deficiency in Internal Control over Compliance Criteria 2 CFR 200.302 states that 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. 2 CFR 200.333 states that financial records, supporting documents, statistical records, and all other non-Federal entity records must be retained for a period of three years from the date of submission of the final expenditure report. For Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. Condition During our procedures, we found the following exceptions: a) In a sample of twenty-five (25) cash drawdown petitions for the Immunization Cooperative Agreement, we observed transactions with the check issued after the required time lapsed in accordance with the program advance type request. Cause Programs have not established written procedures and internal controls to properly follow up the finance division in order to pay to the suppliers and service providers on a timely basis. Effect Failure to minimize the time elapsed between the drawdown from the US Treasury to the actual check issue date may result in the calculation and determination by the Federal grantors of interest costs on the average balance of funds held beyond the reasonable time. This situation may also expose the PRDH to possible sanctions by federal grantors, such as withholding payments, or other special conditions. Questioned Costs None Perspective Information Finding represents a significant and repetitive problem. The Department will reinforce procedures over the disbursement process to ensure that all program payments are made within the 3 days timeframe. Prior Year Audit Finding None Recommendation The PRDH should establish written procedures that payments are issued promptly after the drawdown is made. This will minimize the time elapsed between the drawdown and the payment of funds. The PRDH should also establish a procedure to periodically monitor the cash balances of Federal programs for the possible identification, investigation, and resolution of unused funds. Views of responsible officials The PRDOH is working with the Finance Department to establish and strengthen our internal controls to ensure all payments comply with the guidelines established by the Federal Government. On the other hand, the PRDOH is working and verifying our own written procedures to ensure that payments are issued promptly after the drawdown is made. Responsible Officials Mrs. Camille Francisco Peguero Program Accountant 787-765-2929 ext. 3287 Dr. Angel M. Rivera Garcia Program Director 787-765-2929 ext. 3338 Estimated Completion Date The Completion date for the revised procedures will be by December 2025.
Finding Number: 2024-004 Agency: Department of Health & Human Services Federal Program: Immunization Cooperative Agreement ALN: 93.268 Grant Number: Various Compliance Requirement: Cash Management Category: Significant Deficiency in Internal Control over Compliance Criteria 2 CFR 200.302 states that 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. 2 CFR 200.333 states that financial records, supporting documents, statistical records, and all other non-Federal entity records must be retained for a period of three years from the date of submission of the final expenditure report. For Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. Condition During our procedures, we found the following exceptions: a) In a sample of twenty-five (25) cash drawdown petitions for the Immunization Cooperative Agreement, we observed transactions with the check issued after the required time lapsed in accordance with the program advance type request. Cause Programs have not established written procedures and internal controls to properly follow up the finance division in order to pay to the suppliers and service providers on a timely basis. Effect Failure to minimize the time elapsed between the drawdown from the US Treasury to the actual check issue date may result in the calculation and determination by the Federal grantors of interest costs on the average balance of funds held beyond the reasonable time. This situation may also expose the PRDH to possible sanctions by federal grantors, such as withholding payments, or other special conditions. Questioned Costs None Perspective Information Finding represents a significant and repetitive problem. The Department will reinforce procedures over the disbursement process to ensure that all program payments are made within the 3 days timeframe. Prior Year Audit Finding None Recommendation The PRDH should establish written procedures that payments are issued promptly after the drawdown is made. This will minimize the time elapsed between the drawdown and the payment of funds. The PRDH should also establish a procedure to periodically monitor the cash balances of Federal programs for the possible identification, investigation, and resolution of unused funds. Views of responsible officials The PRDOH is working with the Finance Department to establish and strengthen our internal controls to ensure all payments comply with the guidelines established by the Federal Government. On the other hand, the PRDOH is working and verifying our own written procedures to ensure that payments are issued promptly after the drawdown is made. Responsible Officials Mrs. Camille Francisco Peguero Program Accountant 787-765-2929 ext. 3287 Dr. Angel M. Rivera Garcia Program Director 787-765-2929 ext. 3338 Estimated Completion Date The Completion date for the revised procedures will be by December 2025.
Finding Number: 2024-006 Agency: Department of Health & Human Services Federal Program: Epidemiology and Laboratory Capacity for Infectious Diseases ALN: 93.323 Grant Number: Various Compliance Requirement: Cash Management Category: Significant Deficiency in Internal Control over Compliance Criteria 2 CFR 200.302 states that 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. 2 CFR 200.333 states that financial records, supporting documents, statistical records, and all other non-Federal entity records must be retained for a period of three years from the date of submission of the final expenditure report. For Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. Condition During our procedures, we found the following exceptions: a) In a sample of fifteen (25) cash drawdown petitions for Epidemiology and Laboratory Capacity for Infectious Diseases, we observed transactions with the check issued after the required time lapsed in accordance with the program advance type request. Cause Programs have not established written procedures and internal controls to properly follow up the finance division in order to pay to the suppliers and service providers on a timely basis. Effect Failure to minimize the time elapsed between the drawdown from the US Treasury to the actual check issue date may result in the calculation and determination by the Federal grantors of interest costs on the average balance of funds held beyond the reasonable time. This situation may also expose the PRDH to possible sanctions by federal grantors, such as withholding payments, or other special conditions. Questioned Costs None Perspective Information Finding represents a significant and repetitive problem. The Department will reinforce procedures over the disbursement process to ensure that all program payments are made within the 3 days timeframe. Prior Year Audit Finding None Recommendation The PRDH should establish written procedures that payments are issued promptly after the drawdown is made. This will minimize the time elapsed between the drawdown and the payment of funds. The PRDH should also establish a procedure to periodically monitor the cash balances of Federal programs for the possible identification, investigation, and resolution of unused funds. Views of responsible officials The PRDOH is working with the Finance Department to establish and strengthen our internal controls to ensure all payments comply with the guidelines established by the Federal Government. On the other hand, the PRDOH is working and verifying our own written internal procedures to ensure that payments are issued promptly after the drawdown is made. Responsible Officials Mrs. Sylvianette Luna Anavitate Program Director 787-765-2929 ext. 3121 Mr. Bryan Santos Martínez Financial and Accountant Analyst 787-765-2929 ext. 3361 Estimated Completion Date The Completion date for the revised procedures will be by December 2025.
Finding Number: 2024-006 Agency: Department of Health & Human Services Federal Program: Epidemiology and Laboratory Capacity for Infectious Diseases ALN: 93.323 Grant Number: Various Compliance Requirement: Cash Management Category: Significant Deficiency in Internal Control over Compliance Criteria 2 CFR 200.302 states that 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. 2 CFR 200.333 states that financial records, supporting documents, statistical records, and all other non-Federal entity records must be retained for a period of three years from the date of submission of the final expenditure report. For Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. Condition During our procedures, we found the following exceptions: a) In a sample of fifteen (25) cash drawdown petitions for Epidemiology and Laboratory Capacity for Infectious Diseases, we observed transactions with the check issued after the required time lapsed in accordance with the program advance type request. Cause Programs have not established written procedures and internal controls to properly follow up the finance division in order to pay to the suppliers and service providers on a timely basis. Effect Failure to minimize the time elapsed between the drawdown from the US Treasury to the actual check issue date may result in the calculation and determination by the Federal grantors of interest costs on the average balance of funds held beyond the reasonable time. This situation may also expose the PRDH to possible sanctions by federal grantors, such as withholding payments, or other special conditions. Questioned Costs None Perspective Information Finding represents a significant and repetitive problem. The Department will reinforce procedures over the disbursement process to ensure that all program payments are made within the 3 days timeframe. Prior Year Audit Finding None Recommendation The PRDH should establish written procedures that payments are issued promptly after the drawdown is made. This will minimize the time elapsed between the drawdown and the payment of funds. The PRDH should also establish a procedure to periodically monitor the cash balances of Federal programs for the possible identification, investigation, and resolution of unused funds. Views of responsible officials The PRDOH is working with the Finance Department to establish and strengthen our internal controls to ensure all payments comply with the guidelines established by the Federal Government. On the other hand, the PRDOH is working and verifying our own written internal procedures to ensure that payments are issued promptly after the drawdown is made. Responsible Officials Mrs. Sylvianette Luna Anavitate Program Director 787-765-2929 ext. 3121 Mr. Bryan Santos Martínez Financial and Accountant Analyst 787-765-2929 ext. 3361 Estimated Completion Date The Completion date for the revised procedures will be by December 2025.
Finding Number: 2024-005 Agency: Department of Health & Human Services Federal Program: Maternal and Child Health Services Block Grant to the State ALN: 93.994 Grant Number: Various Compliance Requirement: Cash Management Category: Significant Deficiency in Internal Control over Compliance Criteria 2 CFR 200.302 states that 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. 2 CFR 200.333 states that financial records, supporting documents, statistical records, and all other non-Federal entity records must be retained for a period of three years from the date of submission of the final expenditure report. For Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. Condition During our procedures, we found the following exceptions: a) In a sample of fifteen (25) cash drawdown petitions for Maternal and Child Health Services Block Grant to the State, we observed transactions with the check issued after the required time lapsed in accordance with the program advance type request. Cause Programs have not established written procedures and internal controls to properly follow up the finance division in order to pay to the suppliers and service providers on a timely basis. Effect Failure to minimize the time elapsed between the drawdown from the US Treasury to the actual check issue date may result in the calculation and determination by the Federal grantors of interest costs on the average balance of funds held beyond the reasonable time. This situation may also expose the PRDH to possible sanctions by federal grantors, such as withholding payments, or other special conditions. Questioned Costs None Perspective Information Finding represents a significant and repetitive problem. The Department will reinforce procedures over the disbursement process to ensure that all program payments are made within the 3 days timeframe. Prior Year Audit Finding None Recommendation The PRDH should establish written procedures that payments are issued promptly after the drawdown is made. This will minimize the time elapsed between the drawdown and the payment of funds. The PRDH should also establish a procedure to periodically monitor the cash balances of Federal programs for the possible identification, investigation, and resolution of unused funds. Views of responsible officials The PRDOH is working with the Finance Department to establish and strengthen our internal controls to ensure all payments comply with the guidelines established by the Federal Government. On the other hand, the PRDOH is working and verifying our own written procedures to ensure that payments are issued promptly after the drawdown is made. Responsible Officials Dr. Manuel Vargas Bernier Program Director 787-765-2929 ext. 4583 Mrs. Diana Ferrer Rivera Senior Accountant 787-765-2929 ext. 4551 Mrs. Lydia Magaly Cabrera Accountant 787-765-2929 ext. 4587 Estimated Completion Date The Completion date for the revised procedures will be by December 2025.
Finding 2024-002: Support for Schedule of Expenditures of Federal Awards in the Accounting System Information on the Federal Programs: ALN 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 (financial management) the auditee must be able to identify all Federal awards received and expenses and the Federal programs under which they were received. Condition: Detailed invoices were available to support the amounts reported on the Schedule of Expenditures of Federal Awards (SEFA), however, the expenses had not been accurately classified by award within the general ledger. It is not possible to extract a program income statement to support the expenditures reported for each grant within the Federal program from the accounting system. Cause: Although they do have categories set up by program, NEW was not tracking the charges reimbursed by the Federal Government separately within the general ledger. Effect or Potential Effect: If the information on the SEFA cannot be traced back to the information within the accounting system, there is an increased potential for inaccurate reporting. Questioned Costs: None noted. Context: The account structure was not set up to track the expenses charged to the Federal Government separately from other programs. Identification as a Repeat Finding, if Applicable: Finding 2022-002, 2023-002 Recommendation: We recommend that NEW ensure that support for the Schedule of Expenditures of Federal Awards (SEFA) can be extracted from the accounting system.
Finding 2024-002: Support for Schedule of Expenditures of Federal Awards in the Accounting System Information on the Federal Programs: ALN 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 (financial management) the auditee must be able to identify all Federal awards received and expenses and the Federal programs under which they were received. Condition: Detailed invoices were available to support the amounts reported on the Schedule of Expenditures of Federal Awards (SEFA), however, the expenses had not been accurately classified by award within the general ledger. It is not possible to extract a program income statement to support the expenditures reported for each grant within the Federal program from the accounting system. Cause: Although they do have categories set up by program, NEW was not tracking the charges reimbursed by the Federal Government separately within the general ledger. Effect or Potential Effect: If the information on the SEFA cannot be traced back to the information within the accounting system, there is an increased potential for inaccurate reporting. Questioned Costs: None noted. Context: The account structure was not set up to track the expenses charged to the Federal Government separately from other programs. Identification as a Repeat Finding, if Applicable: Finding 2022-002, 2023-002 Recommendation: We recommend that NEW ensure that support for the Schedule of Expenditures of Federal Awards (SEFA) can be extracted from the accounting system.
Finding 2024-002: Support for Schedule of Expenditures of Federal Awards in the Accounting System Information on the Federal Programs: ALN 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 (financial management) the auditee must be able to identify all Federal awards received and expenses and the Federal programs under which they were received. Condition: Detailed invoices were available to support the amounts reported on the Schedule of Expenditures of Federal Awards (SEFA), however, the expenses had not been accurately classified by award within the general ledger. It is not possible to extract a program income statement to support the expenditures reported for each grant within the Federal program from the accounting system. Cause: Although they do have categories set up by program, NEW was not tracking the charges reimbursed by the Federal Government separately within the general ledger. Effect or Potential Effect: If the information on the SEFA cannot be traced back to the information within the accounting system, there is an increased potential for inaccurate reporting. Questioned Costs: None noted. Context: The account structure was not set up to track the expenses charged to the Federal Government separately from other programs. Identification as a Repeat Finding, if Applicable: Finding 2022-002, 2023-002 Recommendation: We recommend that NEW ensure that support for the Schedule of Expenditures of Federal Awards (SEFA) can be extracted from the accounting system.
Finding 2024-002: Support for Schedule of Expenditures of Federal Awards in the Accounting System Information on the Federal Programs: ALN 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 (financial management) the auditee must be able to identify all Federal awards received and expenses and the Federal programs under which they were received. Condition: Detailed invoices were available to support the amounts reported on the Schedule of Expenditures of Federal Awards (SEFA), however, the expenses had not been accurately classified by award within the general ledger. It is not possible to extract a program income statement to support the expenditures reported for each grant within the Federal program from the accounting system. Cause: Although they do have categories set up by program, NEW was not tracking the charges reimbursed by the Federal Government separately within the general ledger. Effect or Potential Effect: If the information on the SEFA cannot be traced back to the information within the accounting system, there is an increased potential for inaccurate reporting. Questioned Costs: None noted. Context: The account structure was not set up to track the expenses charged to the Federal Government separately from other programs. Identification as a Repeat Finding, if Applicable: Finding 2022-002, 2023-002 Recommendation: We recommend that NEW ensure that support for the Schedule of Expenditures of Federal Awards (SEFA) can be extracted from the accounting system.
Assistance Listing Number: 21.027 Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Award Number: N/A Federal Award Year: 2023/2024 Pass Through Entity: Chicago Cook Workforce Partnership Criteria: In accordance with 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Organization is either lacking or has nonconforming written policies and procedures for the following administrative functions, required by0 the Uniform Guidance: 1. Financial management - 2 CFR 200.302(b)(6) - spacing 2. Allowable Costs - 2 CFR 200.302(b)(7) 3. Federal payment - 2 CFR 200.305(b)(1) 4. Procurement - 2 CFR 200.318(a) and 2 CFR 200.318(c)(1) 5. Competition - 2 CFR 200.319(d) 6. Methods of procurement to be followed - 2 CFR 200.320 7. Compensation (Personal Services) - 2 CFR 200.430(a)(1) 8. Compensation (Fringe Benefits - Leave) - 2 CFR 200.431(b)(1) 9. Relocation costs of employees - 2 CFR 200.464(a)(2) 10. Travel costs - 2 CFR 200.474 Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our review of the Organization’s policies and procedures, which were found to be not in accordance with Uniform Guidance. Cause: The Organization was not aware of the specific Uniform Guidance requirements for certain written policies and procedures. Effect: The Organization did not have these policies and procedures in place to reasonably ensure that program functions are achieved effectively, efficiently and in compliance with Federal statutes, regulations, and the terms and conditions of the award. The Organization was not in compliance with the administrative requirements set forth in the Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization design procedures and implement internal control procedures to ensure that the Uniform Guidance administrative requirements are met. Views of Responsible Officials and Corrective Action Plan: See corrective action plan attached to financial statements.
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.
2024-018. USU Extension Extra Services Compensation Program Non-Compliance with Uniform Guidance (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Various Assistance Listing Number and Title: Various Federal Award Number: Various Questioned Costs: Undetermined Pass-through Entity: Various Prior Year Single Audit Report Finding Number: N/A Utah State University’s (University) Internal Audit performed a review of the University’s Extension Service (Extension) within the College of Agriculture and Applied Science. The review determined that Extension’s Extra Service Compensation (ESC) program violates Uniform Guidance requirements and University policy, bypasses critical internal controls, and provides employees with additional compensation for extra-service work related to their primary job duties without sponsor approval. Extension’s mission, under the University’s land grant mission, provides research-based programs and resources to Utah’s population using a mix of local, state, federal and sponsored funding. To incentivize its personnel to apply for grants, Extension created an ESC program that allowed personnel to replace a portion of their primary position institution-funded salary with grant-funded salary. Personnel could then request up to 20 percent of their primary position salary through an ESC secondary position funded with the replaced institution-funded salary. However, Extension’s justified purpose for the ESC secondary position was “caused by and associated with the grant.” In doing so, Extension made it possible to bypass the University’s policy and internal controls for extra-service pay by obscuring the work duties and funding source for the secondary position. Below is an illustrative example from the USU Internal Audit Report of an ESC professor with an institutional base salary of $50,000: Payment to Employee Before Receiving Award (Source: USU Internal Audit Report IAS-23-53) Uniform Guidance maintains strict requirements with regard to the allowability of compensation, including special consideration for substantial increases, particularly with: • federal award ratios (2 CFR 200.430(e)), • institutional base salary charges, including federal award proportionate shares (2 CFR 200.430(h)(2)), • prior approvals by federal awarding agencies for incidental activities with supplemental compensation (2 CFR 200.430(h)(1)), • intra-institution consulting within higher education (2 CFR 200.430(h)(3)), • institutional policy definitions to conclusively determine work resulting in extra service pay (2 CFR 200.430(h)(4), and • relevant internal controls (2 CFR 200.302(b)(4). Internal Audit cites that the ESC program does not comply with Uniform Guidance, as well as University policy (Extra-Service Compensation Policy 376), which formalizes the University’s approach to compliance with Uniform Guidance for these activities. Internal Audit identified that University personnel did not follow or were unfamiliar with established policies in addition to procedural changes that did not require sufficient level of documentation for proper approvals. Detailed fieldwork by Internal Audit identified instances of questioned costs for funding (both federal and non-federal) in excess of $25,000. Fieldwork covered the period between January 1, 2020 and June 14, 2023, but also identified evidence of noncompliance as far back as 2009 to 2018. After Internal Audit issued its report in September 2024, the University took action to begin determining the potential financial impact of noncompliance through an external third-party. A report by this external third-party has not been completed as of the date of this finding; therefore, the amount of questioned costs related to federal programs cannot be determined. The University has also taken steps to immediately address policy and control deficiencies across the institution. Recommendations: We recommend the University do the following relative to University-wide procedures: 1. Determine the potential financial impact of noncompliance with grant sponsors. 2. Evaluate and improve its policies and required documentation for extra-service compensation. 3. Evaluate and improve its internal controls for sponsored program compensation. 4. Provide adequate training to University personnel regarding sponsored programs compensation compliance. USU’s Response: Utah State University (“USU”) generally agrees with Finding One. As detailed in USU internal audit IAS-23-53, USU Extension established a program to incentivize and reward its personnel to apply for grants (referred to by Extension and within USU internal audit IAS-23-53 as the “incentive program”). While the Uniform Guidance permits incentive programs (see CFR 200.430(f)) and such programs are readily used by universities, the USU Extension incentive program was established and carried out in manner that violated USU’s policy governing extra service compensation (“ESC”) and in a manner that bypassed critical internal controls. Notably, USU Internal Audit IAS-23-53 tested compliance with USU’s extra-service compensation policy but did not review actual costs charged to federal sponsors as this was outside the scope of the audit. Consistent with the recommendations to determine the potential impact of noncompliance, USU worked with an outside consultant to review payment of ESC to all employees working on federal grants. This work identified (1) limited instances when salaries directly charged to sponsored projects included extra service compensation in the base salary and (2) limited instances when extra service compensation was charged to federal sponsors without sponsor approval. The majority of ESC payments made pursuant the USU Extension incentive program was not charged to grant sponsor or included in the institutional base salary charged to the grant. Accordingly, noncompliance with the Uniform Guidance clauses related to compensation costs was limited to a small subset of payments made under the USU Extension incentive program. Based on these findings, USU agrees with the corrective actions recommended and, as outlined in the corrective action plan summary below, has already completed and/or initiated these actions.