Finding Number: 2022-003 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 14.239 Program Name: HOME investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Portland Housing Bureau Grant Numbers: 311020 Federal Award Year: 2022 Control Deficiency Type: Significant deficiency in internal controls over compliance Instance of Noncompliance: Yes Compliance Requirement: Reporting Questioned Costs: None Repeat Finding: No Criteria: 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, and §200.302 (b), Financial Management. Identification, in its accounts, of all federal awards received and expended and the federal program under which they were received. Federal program and federal award identification must include, as applicable, the CFDA title and number, federal award identification number, name of the federal agency, and name of the pass-through entity, if any. Additional criteria: 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F – Audit Requirements, §200.510, Financial Statements. Schedule of Expenditures of Federal Awards – The auditee also must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements, which must include the total federal awards expended, as determined in accordance with §200.502, Basis for Determining Federal Awards Expended. At a minimum, the schedule must provide total federal awards expended for each individual federal program and the CFDA number or other identifying number when the CFDA information is not available. For a cluster of programs, also provide the total for the cluster. Condition: During the audit, we noted that the organization did not maintain a complete schedule of expenditures of federal awards. Cause: The organization did not adequately track federal expenditures and the required information needed to prepare a schedule of expenditures of federal awards. Effect: Failure to prepare an accurate and complete schedule of expenditures of federal awards results in noncompliance with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, §200.302, Financial Management, and Subpart F – Audit Requirements, §200.510, Financial Statements. Audit Recommendation: We recommend that the organization document and implement policies and procedures to ensure the schedule of expenditures of federal awards is accurate and complete in accordance with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, §200.302, Financial Management and Subpart F – Audit Requirements, §200.510, Financial Statements, in order to obtain accurate calculations of major federal programs for the single audit and to ensure the organization is in compliance with all of the reporting requirements as to identify the source and application of funds for federally-funded activities. Management’s Response: The SEFA was assigned to be prepared internally, but unfortunately was not submitted due to staff turnover during the course of the audit. This oversight will be corrected by improving procedures around internal task assignments when employee turnover is experienced in the Fiscal department during the course of the audit.
FINDING 2022-003 Information on the federal program: Subject: Water and Waste Disposal Systems for Rural Communities – Reporting Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.760 Federal Award Number: 92-02 92-03 Pass-Through Entity: N/A Compliance Requirements: Reporting Audit Findings: Significant Deficiency Criteria: 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: The City did not have proper controls in place to ensure that the annual report was accurately filled out and agreed to underlying detail. Cause: There were not sufficient internal controls in place to ensure the accuracy of the annual report prior to its submission. Effect: The failure to establish an effective internal control system placed the City at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: Variances to key line items were noted when comparing the Form RD442-2 and Form RD442-3 to supporting documents. Identification as a repeat finding, if applicable: No Recommendation: We recommend someone other than the preparer thoroughly review and document the review of the report 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.
Management did not have written internal control procedures for determining allowable costs and other requirements over federal awards specifically relating to the Uniform Guidance. 2 CFR 200, Subpart D, Section 200.302(b)(7) requires “written procedures for determining the allowability of costs in accordance with Subpart E – Cost Principles of this part and the terms and conditions of the Federal Award. no questioned costs. Lack of written controls to identify allowable costs and special tests and provisions. Costs may be disallowed and required to be repaid to the granting agency. Compliance requirements set forth in the grant agreements were not followed. Management should develop written internal control procedures in accordance with the Uniform Guidance. This was a repeat finding as Finding 2021-003.
Management did not have written internal control procedures for determining allowable costs and other requirements over federal awards specifically relating to the Uniform Guidance. 2 CFR 200, Subpart D, Section 200.302(b)(7) requires “written procedures for determining the allowability of costs in accordance with Subpart E – Cost Principles of this part and the terms and conditions of the Federal Award. no questioned costs. Lack of written controls to identify allowable costs and special tests and provisions. Costs may be disallowed and required to be repaid to the granting agency. Compliance requirements set forth in the grant agreements were not followed. Management should develop written internal control procedures in accordance with the Uniform Guidance. This was a repeat finding as Finding 2021-003.
2 CFR 200.302(b)(6) requires that non-Federal entities establish written procedures to implement the requirements of 2 CFR 200.305. The FAR clause at 48 CFR section 52.216-7 applies to reimbursement payment. Paragraph (b)(1) of that clause requires that the non-federal entity request reimbursement for (a) only allocable, allowable, and reasonable contract costs that have already been paid, or (b) if the non-federal entity is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid. Article V, Section B states: 1. Periodically, but not more frequently than once every 30 calendar days, the Non-Federal Sponsor shall provide the Government with a sufficient invoice for costs the Non-Federal Sponsor has incurred for the Project. 2. Upon receipt of such sufficient invoice, the Government shall review the costs identified therein and shall determine: (a) the amount to be included in total project costs, subject to the limitations in Article II.C. of this Agreement; (b) the total costs incurred by the parties to date (including the value of lands, easements, rights-of-way, and relocations, and the costs of permits determined in accordance with Article V of this Agreement); (c) each party’s share of total project costs and the costs of data recovery activities associated with historic preservation in accordance with Article II.P. of this Agreement incurred by the parties to date; (d) the costs incurred by each party to date; (e) the total amount of reimbursements the Government has made to date in accordance with this paragraph; (f) the balance of Federal funds available for the Project, as of the date of such review; (g) the amount of reimbursement, if any, due to the Non-Federal Sponsor; and (h) the amount that actually will be paid to the Non-Federal Sponsor (hereinafter the “payment amount”) if the amount of reimbursement determined above cannot be fully paid due to an insufficiency of Federal funds or the limitations of the Section 594 Program Limit for Ohio or the Section 102 Limit. Article I, Section K state the term “sufficient invoice” shall mean documentation provided by the Non-Federal Sponsor containing the following: (1) a written certification by the Non-Federal Sponsor to the Government that it has made specified payments to contractors, suppliers, or employees for performance of work in accordance with this Agreement, or a written certification by the Non-Federal Sponsor to the Government that it has received bills from contractors, suppliers, or employees for performance of work in accordance with this Agreement; (2) copies of all relevant invoices and evidence of such payments or bills received; (3) written identification of such costs that have been paid with Federal program funds and a copy of the written verification from the Federal agency that provided the funds; and (4) a written request for reimbursement for the amount of such specified payments or bills received. The Village received funding from various sources for the project. Due to cash flow issues, the Village often used alternate funding to meet federal obligations, leaving an accumulation of federal funds on hand during the year. The Village also does not have any formal policies in place regarding cash management requirements. We recommend that the Village more closely monitor its reimbursement requests in relation to actual expenditures paid to ensure that the Village does not accumulate federal funds. Additionally, the Village should adopt formal policies and procedures that address cash management requirements.
2022-008 Grant Expenditures (Material Weakness) Criteria: Title 2 CFR Part 200 §200.400. Accounting practices must support the accumulation costs including maintaining adequate documentation to support costs charged to the Federal award. Title 2 CFR Part 200 §200.302 requires that the financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds. Condition: Actual grant expenses were not accumulated in the Organization’s accounting system by individual grant and indirect costs were not appropriately applied. As discussed at 2022-006, the Organization prepared grant submissions based on estimates of monthly average expenses to be incurred over the life of the grant as opposed to expenses actually incurred. This led to noncompliance of the grant provisions for reimbursement. Cause: The Organization’s accounting system is not properly designed to accumulate expenses by grant. Policies and procedures were not adequately designed for the appropriate level of oversight to ensure that grant submissions complied with grant agreements. Effect: Submissions for grants reimbursement exceeded actual expenses incurred. In addition, because of the failure to assign expenses to individual grants, there is an increased risk that expenditures could be inappropriately charged to government programs. Questioned Costs: Not determinable at the major program level. Perspective: Pervasive, this was not an isolated incident. Repeat Finding: Yes Recommendation: The Organization’s accounting system should be modified to accommodate expense tracking by individual grant and policies and procedures should be implemented to require direct expenses be assigned to specific grants. A method should be established to allocate indirect costs in accordance with federal regulations. Policies and procedures are also needed to provide appropriate oversight of all grant accounting including reporting. Views of Responsible Officials: Management acknowledges the control weaknesses related to the accumulation of grant expenses and accurate completion of grant reimbursement requests. The Organization has undertaken a review of its policies and procedures, including consultation of an outside accounting firm to implement policies and procedures to properly account for grant expenses and accurately prepared requests for reimbursement.
2022-009 Cash Disbursements (Material Weakness) Criteria: CFR 200 §200.403. Allowable costs under Federal awards must be necessary and reasonable for the performance of the Federal award and be allocable thereto. CFR 200 §200.302. Effective control and accountability must be maintained, all assets must be safeguarded and used solely for authorized purposes. Condition: In June 2022, the former Executive Director authorized bonuses for himself and two other senior management members without the knowledge of the board of directors and accounting staff. In December 2022, holiday bonuses were paid without documentation to ensure the expenditure was reasonable and necessary. In addition, approval was not documented on invoices selected for testing. Cause: As discussed at Finding 2022-003, the Organization’s policies and procedures were not adequately designed for the proper segregation of accounting and banking functions. As discussed at Finding 2022-004, the Organization’s policy requiring two signatures on all checks over $1,000 was not followed and no policy existed to ensure all invoices are approved and evidence of approval retained. Effect: Disbursements were made that were not in compliance with applicable regulations and grant agreement. Allowing these functions to be performed without separating incompatible duties and requiring appropriate documentation and review increases the risk that errors or misappropriation could occur. Questioned Costs: Unauthorized bonuses $39,342. Perspective: The unauthorized bonuses are a known amount (not projected). As noted at 2022-004, none of the transactions selected for testing contained evidence of approval. Repeat Finding: Yes Recommendation: We recommend policies and procedures over the segregation of duties between the accounting and banking functions be strengthened. In addition, policies and procedures should be implemented to ensure support for expenditures is retained and includes evidence of approval. Additional oversight should be provided by those charged with governance. Views of Responsible Officials: Management acknowledges the control weaknesses as described above as there was not a proper segregation of duties in place. The Organization has undertaken a review of its policies and procedures, including consultation of an outside accounting firm to ensure proper control procedures are in place including appropriate segregation of duties.
2 CFR § 200.303 (a) states, in part, 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 statues, regulations, and the terms and conditions of the federal award. 2 CFR 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. In addition, maintaining organized documentation and support for federal transactions is essential in assuring the Townships Schedule of Federal Awards is complete and accurate and that costs and activities are allowable. We noted that the Township did not maintain underlying documentation and support for 4 of 7 nonpayroll FEMA expenditures. However, we were able to obtain such invoices directly from the Ohio Emergency Management Agency to determine allowability. For the remaining 3 invoices that the Township did maintain support for, there was no indication that management reviewed these expenditures for allowability. This weakness could result in unallowable expenditures being charged to the FEMA grant. Formal written procedures should be developed, implemented, and consistently applied to the approval of federal grant expenditures prior to payment. Procedures should include how approvals by management or administrators are documented for each expenditure and the approvals should be done by personnel knowledgeable about the federal program. Implementing a formal control process with help ensure only allowable expenditures are made using federal grant funds. The Township should also maintain all invoices for transaction to ensure allowability.
2022-005 — Activities Allowed and Unallowed and Allowable Costs/Cost Principles (Significant Deficiency) Federal Program Information: Funding agency: U.S. Department of Health and Human Services Title: Provider Relief Fund and American Rescue Plan Rural Distribution Assistance listing number: 93.498 Award year: 2022 Award period: 2022 Criteria: The Uniform Guidance 2 CFR 200.302 requires that organizations maintain complete and detailed records that document the source and application of federal funds. Adequate recordkeeping is essential for financial accountability and compliance with accounting standards. Condition/Context: Of a sample of 25 transactions charged to the major program, 5 of the sampled transactions lacked itemized source documentation (such as receipts or invoices), 10 transactions lacked reconciliations tying expense to source documentation, and 3 transactions lacked evidence of review and approval by appropriate personnel. Cause: The Hospital experienced turnover and extended vacancies in key finance department positions. This contributed to insufficient oversight and a lack of adherence to internal controls over recordkeeping and expenditure approvals. Effect: The absence of itemized receipts and evidence of review and approval hinders the ability to verify the legitimacy and appropriateness of these transactions. This raises concerns about the accuracy of financial reporting and compliance with accounting standards and the Uniform Guidance and may increase the risk of questioned costs or ineligible expenditures going undetected. Questioned Costs: None. Recommendation: Management should enforce existing internal control procedures to ensure that all transactions are adequately documented with itemized receipts and properly reviewed and approved. Training should also be provided to staff responsible for recordkeeping to emphasize requirements for maintaining detailed documentation in accordance with Uniform Guidance. Views of Responsible Officials: Management will enforce existing internal control procedures and train staff to maintain appropriate documentation.
Finding #2022-002 Type: Significant Deficiency over Schedule of Expenditures of Federal Awards (SEFA) Criteria/Requirement The Organization is required to clearly identify and track federal expenditures in accordance with 2 CFR 200.302. Condition/Context During the year, the Organization experienced significant turnover in their Finance Department. The Organization did not identify all federal awards accurately and timely to include in the SEFA. Effect Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs None. Recommendation The Organization should implement procedures and controls to accurately capture all activity under federal awards during the year to be able to prepare a complete and accurate the SEFA. Management?s Response We concur with the audit findings and recommendations for the defined period and have pre-emptively been on a path to remedy these problems. OSF is currently redesigning key components of its accounting system to clearly identify federal expenditures with minimal adjustments. Implementation of these changes will occur before the end of the current fiscal year.
Finding #2022-002 Type: Significant Deficiency over Schedule of Expenditures of Federal Awards (SEFA) Criteria/Requirement The Organization is required to clearly identify and track federal expenditures in accordance with 2 CFR 200.302. Condition/Context During the year, the Organization experienced significant turnover in their Finance Department. The Organization did not identify all federal awards accurately and timely to include in the SEFA. Effect Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs None. Recommendation The Organization should implement procedures and controls to accurately capture all activity under federal awards during the year to be able to prepare a complete and accurate the SEFA. Management?s Response We concur with the audit findings and recommendations for the defined period and have pre-emptively been on a path to remedy these problems. OSF is currently redesigning key components of its accounting system to clearly identify federal expenditures with minimal adjustments. Implementation of these changes will occur before the end of the current fiscal year.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
Significant Deficiency 2 CFR ? 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ? 200.302 (b) (6) and (7) which requires the Authority to establish written procedures for determining the allowability of costs in accordance with Subpart E - Cost Principles and the terms and conditions of the Federal award and establish written procedures to implement the requirements of ? 305 Payment. Additionally, 2 C.F.R. ? 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 C.F.R. ? 200.318(a) which states the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. Although the Authority did have written standard operating procedures requiring purchase orders, they did not have an approved purchase order or contract on file for 2 of the 50 purchases tested. Failure to have proper controls in place to ensure policies and procedures are being followed could result in unallowable costs and procurement noncompliance. The Authority should follow their written standard operating procedures and implement controls to ensure allowability of costs and procurement in accordance with federal grants.
2022-001: Internal Controls over Reporting Federal Grantor: U.S. Department of Health and Human Services Pass-Through Grantor: Missouri Department of Social Services Federal Assistance Listing Number: 93.558 Program Title: Temporary Assistance for Needy Families Pass-through Entity Identifying Number: CS200821001 Award Year: 2021-2022; 2022-2023 Questioned Costs: $142,000 Criteria: The Uniform Guidance at 2 CFR 200.302(b) states that, ?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?(3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation.? MCAN?s contract with the Missouri Department of Social Services requires the organization to ?submit invoices for reimbursement of actual allowable expenses? on monthly expenditure reports that must be submitted by the 15th day of each month. Condition: The expenditures incurred by subrecipients billed to the Department of Social Services on the monthly TANF SkillUp expenditure reports for the months of June 2022 through September 2022 did not agree to the expenditures incurred per the general ledger for those months. The table below shows the comparison of the amounts billed and the actual expenditures incurred per the general ledger for each month: "See Schedule of Findings and Questioned Costs for chart/table" Cause: The organization had turnover in the Executive Director and accounting positions during the fiscal year. The first monthly billing performed by the new fiscal contractor was June 2022, and it was determined that they ran a cash basis report from the accounting system in order to determine the amount of expenditures to be billed for the month instead of an accrual basis report. This led to several subrecipient invoices totaling around $142,000 which had been claimed on the May 2022 expenditure report on the accrual basis being duplicated on the June 2022 report when they were paid. The organization did not maintain the reports from the accounting system which were used to determine the amounts to be billed with the copies of the expenditure reports, therefore, significant effort was required during the audit to determine how the amounts billed were determined. Effect: Internal controls over the reporting process were not adequate to ensure that monthly expenditure reports were complete and accurate and did not provide an adequate audit trail that supported the amounts reported on the monthly reports. This led to the organization billing the grantor for expenditures that had not been incurred. The grantor has agreed to allow the organization to apply $142,000 to expenditures incurred in fiscal year 2023. Recommendation: We recommend that the organization implement internal controls over the grant reporting process to ensure that all monthly reports are complete and accurate and that only expenditures that have been incurred are requested for reimbursement.
FINDING 2022-055 Temporary Assistance for Needy Families, ALN 93.558, Reporting - Accuracy of Financial Reports See Schedule of Findings and Questioned Costs for chart/table. Condition MDHHS did not submit accurate financial reports to HHS's Administration for Children and Families (ACF). Our review of the fiscal year 2022 fourth quarter TANF financial report (ACF-196R) noted MDHHS excluded $23.1 million in federal expenditures incurred by LEO. Also, MDHHS inappropriately included these expenditures in its fiscal year 2023 first quarter financial report instead of submitting a corrected fiscal year 2022 financial report for the quarter ended September 30, 2022. Criteria Federal regulation 2 CFR 200.302(b)(2) requires grantees to submit accurate financial data in accordance with a grant program's reporting requirements. The reporting instructions include details for reporting expenditures made in the federal fiscal year for the grant year being reported. The instructions also state revisions to expenditures reported in prior years should be made to the report of the fiscal year in which the expenditure occurred. Cause MDHHS informed us its internal control approval process was not timely and resulted in excluding LEO's fourth quarter interagency billing from the 2022 financial report. Effect MDHHS may have diminished the federal grantor agency's ability to ensure appropriate oversight and monitoring of TANF funds. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDHHS improve its internal control and submit revised financial reports to ACF. Management Views MDHHS agrees with the finding.
FINDING 2022-055 Temporary Assistance for Needy Families, ALN 93.558, Reporting - Accuracy of Financial Reports See Schedule of Findings and Questioned Costs for chart/table. Condition MDHHS did not submit accurate financial reports to HHS's Administration for Children and Families (ACF). Our review of the fiscal year 2022 fourth quarter TANF financial report (ACF-196R) noted MDHHS excluded $23.1 million in federal expenditures incurred by LEO. Also, MDHHS inappropriately included these expenditures in its fiscal year 2023 first quarter financial report instead of submitting a corrected fiscal year 2022 financial report for the quarter ended September 30, 2022. Criteria Federal regulation 2 CFR 200.302(b)(2) requires grantees to submit accurate financial data in accordance with a grant program's reporting requirements. The reporting instructions include details for reporting expenditures made in the federal fiscal year for the grant year being reported. The instructions also state revisions to expenditures reported in prior years should be made to the report of the fiscal year in which the expenditure occurred. Cause MDHHS informed us its internal control approval process was not timely and resulted in excluding LEO's fourth quarter interagency billing from the 2022 financial report. Effect MDHHS may have diminished the federal grantor agency's ability to ensure appropriate oversight and monitoring of TANF funds. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDHHS improve its internal control and submit revised financial reports to ACF. Management Views MDHHS agrees with the finding.
Item 2022-001 Written policies, procedures, and standards of conduct Water and Waste Disposal Systems for Rural Communities Assistance Listing Number 10.760 U.S. Department of Agriculture Grant period: Year ended September 30, 2022 Questioned Costs ? $0 Condition ? The Board does not have all of the written policies, procedures and standards of conduct required by UG. Criteria ? Grantees should have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. 2 CFR 200, Subparts D & E requires the non-Federal entity to establish and maintain written policies, procedures, and standards of conduct including internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award. Specific requirements relate to the following: ? ? 200.302 Financial management ? ? 200.305 Payment ? ? 200.319 Competition ? ? 200.320 Methods of procurement to be followed ? ? 200.430 Compensation?personal services ? ? 200.431 Compensation?fringe benefits Cause of Condition ? The Board has failed to prepare written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. Potential Effect of Condition ? Lack of written policies, procedures, and standards of conduct could result in noncompliance related to federal awards. Recommendation ? We recommend that the Board implement the required written policies and procedures. Audit finding 2022-001 relates to prior year 2021-001 finding. Updated reference number to current audit year 2022.
Federal Agency: U.S. Small Business Administration Federal Program: 59.075 Shuttered Venue Operators Program Grant Period: Year ended September 30, 2022 Criteria: 2 CFR 200.302(b)(7), 2 CFR 200.318(c)(1) Condition: Written policies and procedures for the determination of allowable of costs, conflicts of interest, and procedures for procurement transactions surrounding federal awards were not available. Cause: Unfamiliarity with requirements stated in 2 CFR 200 of the Uniform Guidance. Potential Effect: Instances of noncompliance with direct and material compliance requirements may occur. Repeat Finding: No Management?s Response and Planned Corrective Action: In the event of receipt of future Federal Awards, management and the board of directors will work towards developing a Federal Award Policy and Procedure Manual to be used for federal awards management. Responsible Person: Tim Stephens, Executive Director
Information on the Federal Program: Assistance Living Number 21.027 Criteria: Title 2 CFR 200 Section 200.302 establishes non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During the current year audit, we had difficulty obtaining the correct financial reports from the accounting software. Context: Fry was unable to extract the correct reports or prepare proper reports. These reports include the Schedule of Federal Expenditures (SEFA), program profit and loss statements, and the functional expense statement. Multiple version of all requested financial documents were provided. Cause: Fry's accounting is not set up properly to allow for easy and accurate record keeping. There is also no review and approval of transactions posted to the accounting software. Effect or Potential Effect: We were unable to trace revenue to the proper general ledger account. We could not trace salary allocations to the project. The major program profit and loss did not tie to the SEFA. Question Costs: None Identification of Repeat Finding: 2021-001 Recommendation: Fry should set up project/class codes for each program, fundraising, and general and administrative in the accounting software. We also recommend Fry hires someone with accounting experience in relation to government grants to assist in the setup and to help maintain records throughout the year. Accounts should be reconciled on a monthly basis and have a review and approval process for all accounts.
Information on the Federal Program: Assistance Living Number 21.027 Criteria: Title 2 CFR 200 Section 200.302 establishes non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During the current year audit, we had difficulty obtaining the correct financial reports from the accounting software. Context: Fry was unable to extract the correct reports or prepare proper reports. These reports include the Schedule of Federal Expenditures (SEFA), program profit and loss statements, and the functional expense statement. Multiple version of all requested financial documents were provided. Cause: Fry's accounting is not set up properly to allow for easy and accurate record keeping. There is also no review and approval of transactions posted to the accounting software. Effect or Potential Effect: We were unable to trace revenue to the proper general ledger account. We could not trace salary allocations to the project. The major program profit and loss did not tie to the SEFA. Question Costs: None Identification of Repeat Finding: 2021-001 Recommendation: Fry should set up project/class codes for each program, fundraising, and general and administrative in the accounting software. We also recommend Fry hires someone with accounting experience in relation to government grants to assist in the setup and to help maintain records throughout the year. Accounts should be reconciled on a monthly basis and have a review and approval process for all accounts.
Finding Number: 2022-006 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of the Treasury COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Year: 10/01/2021 ? 09/20/2022 Government Department/Agency: Office of the Chief Financial Officer (OCFO) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 2 CFR Section 200.302(a), Financial Management, 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. In addition, the state?s and the other non-federal entity?s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Condition ? Certain grant expenditures related to the PAY-AS-You-Go (PAYGO Capital) program, amounting to approximately $36.4 million, had erroneously been reflected as expenditures under assistance listing number 21.027, COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. Subsequently, OCFO adjusted the SEFA to reflect the actual amount of expenditures incurred for the program. Questioned Costs ? None. Context ? This is a condition identified per review of the OCFO?s compliance with the specified requirements. Effect ? OCFO is not in compliance with the stated provisions. Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause ? OCFO did not appear to have adequate policies and procedures in place to ensure accuracy of the SEFA. Recommendation ? We recommend that OCFO adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? OCFO concurs with the finding. In the compilation and reconciliation of the SEFA, the PAYGO ARPA Local Revenue Replacement expenditures component was inadvertently included in the draft District fiscal year 2022 SEFA presented to the external auditors. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.
Finding 2022-001 ? Internal Controls over Grant Management (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Department of Transportation CFDA No. 20.615 E-911 Grant Program Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: Alabama Statewide 9-1-1 Board does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: Alabama Statewide 9-1-1 Board has processes and procedures in place to administer grant funds but no written policies. Effect: Alabama Statewide 9-1-1 Board is not in compliance with financial management system requirements. Recommendation: Alabama Statewide 9-1-1 Board should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliance. Views of Responsible Officials: See Corrective Action Plan included at the end of the report.
Item 2022-001 Uniform Guidance Written Policies, Procedures and Standards of Conduct (Repeat Item 2019-001) U.S. Department of Agriculture Water and Waste Disposal Systems for Rural Communities Assistance Listing #10.760 Year Ended September 30, 2022 Criteria ? Grantees should have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. 2 CFR 200, Subparts D & E requires the non-Federal entity to establish and maintain written policies, procedures, and standards of conduct including internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award. Specific requirements relate to the following: ? ? 200.302 Financial management ? ? 200.305 Payment Condition ? The City does not have written policies, procedures and standards of conduct. Cause ? The entity has failed to prepare written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. Questioned Costs ? Not determinable Effect ? Lack of written policies, procedures, and standards of conduct could result in noncompliance related to federal awards. Recommendation ? We recommend that the Commission prepare written policies, procedures, and standards of conduct to include all the required elements as provided in 2 CFR 200, Subparts D & E of the Uniform Guidance. Management?s Response ? The City will consider all recommendations.
Information on the Federal Program: Assistance Listing Number 21.027-Coronavirus State and Local Fiscal Recovery Funds, U.S. Department of the Treasury. Compliance Requirements: Allowable Costs and Costs Principles. Type of Finding: Noncompliance. Criteria: 2 CFR § 200.302(b)(7) requires that each non-Federal entity must provide for written procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles and the terms and conditions of the Federal award. Condition: We noted that the County did not have written procedures for determining the allowability of costs and the terms and conditions of the Federal award during fiscal year 2022. Cause: The County was not aware of the requirement to have written procedures for determining the allowability of costs and the terms and conditions of the Federal award. Effect: Failure to have written procedures for determining allowability of costs and the terms and conditions of the Federal award could result in costs charged to the program that are not allowable costs as defined by the appropriate cost principles circular and noncompliance with Uniform Guidance requirements and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the County identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The County has identified federal grants subject to the Uniform Guidance and will develop written procedures for determining the allowability of costs in accordance with 2 CFR 200, Subpart E—Cost Principles and the terms and conditions of the Federal award.
MANAGEMENT DID NOT HAVE WRITTEN INTERNAL CONTROL PROCEDURES FOR DETERMINING ALLOWABLE COSTS. 2 CFR 200, SUBPART D, SECTION 200.302(B)(7) REQUIRES "WRITTEN PROCEDURES FOR DETERMINING THE ALLOWABILITY OF COSTS IN ACCORDANCE WITH SUBPART E - COST PRINCIPLES OF THIS PART AND THE TERMS AND CONDITIONS OF THE FEDERAL AWARD. NO QUESTIONED COSTS. LACK OF WRITTEN CONTROLS TO IDENTIFY ALLOWABLE COSTS AND SPECIAL TESTS AND PROVISIONS. THIS WAS NOT A REPEAT FINDING.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Cash Management • Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.302(b)(3) the nonfederal entity must keep "records that identify adequately the source and application of funds for federally-funded activities" and must maintain effective controls over these procedures. Condition: No accompanying invoices to support drawdown requests. Questioned costs: None Context: While there existed evidence of supporting invoices for Federal expenditures (with the exception of one item for $52 - see finding 2022-006), these were not compiled into an auditable list showing justification for the drawdown amounts. Auditors reviewed the profit and loss schedule for the year and were not able to identify a clear pattern between expenditures and drawdowns. Cause: Lack of procedures requiring supporting documentation. Effect: Reimbursement requests could be made for unallowed expenditures. Repeat Finding: No Recommendation: Implement process to ensure documentation is kept identifying which expenditures are included in reimbursement request. There should be a secondary individual (ED and contract accountant) involved in the process to ensure accuracy - documentation of the two-person preparation and review process should be documented. Implement procedures to document review of subrecipient payment requests and minimize time elapsed between requests and payments. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Cash Management • Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.302(b)(3) the nonfederal entity must keep "records that identify adequately the source and application of funds for federally-funded activities" and must maintain effective controls over these procedures. Condition: No accompanying invoices to support drawdown requests. Questioned costs: None Context: While there existed evidence of supporting invoices for Federal expenditures (with the exception of one item for $52 - see finding 2022-006), these were not compiled into an auditable list showing justification for the drawdown amounts. Auditors reviewed the profit and loss schedule for the year and were not able to identify a clear pattern between expenditures and drawdowns. Cause: Lack of procedures requiring supporting documentation. Effect: Reimbursement requests could be made for unallowed expenditures. Repeat Finding: No Recommendation: Implement process to ensure documentation is kept identifying which expenditures are included in reimbursement request. There should be a secondary individual (ED and contract accountant) involved in the process to ensure accuracy - documentation of the two-person preparation and review process should be documented. Implement procedures to document review of subrecipient payment requests and minimize time elapsed between requests and payments. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Cash Management • Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.302(b)(3) the nonfederal entity must keep "records that identify adequately the source and application of funds for federally-funded activities" and must maintain effective controls over these procedures. Condition: No accompanying invoices to support drawdown requests. Questioned costs: None Context: While there existed evidence of supporting invoices for Federal expenditures (with the exception of one item for $52 - see finding 2022-006), these were not compiled into an auditable list showing justification for the drawdown amounts. Auditors reviewed the profit and loss schedule for the year and were not able to identify a clear pattern between expenditures and drawdowns. Cause: Lack of procedures requiring supporting documentation. Effect: Reimbursement requests could be made for unallowed expenditures. Repeat Finding: No Recommendation: Implement process to ensure documentation is kept identifying which expenditures are included in reimbursement request. There should be a secondary individual (ED and contract accountant) involved in the process to ensure accuracy - documentation of the two-person preparation and review process should be documented. Implement procedures to document review of subrecipient payment requests and minimize time elapsed between requests and payments. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Cash Management • Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.302(b)(3) the nonfederal entity must keep "records that identify adequately the source and application of funds for federally-funded activities" and must maintain effective controls over these procedures. Condition: No accompanying invoices to support drawdown requests. Questioned costs: None Context: While there existed evidence of supporting invoices for Federal expenditures (with the exception of one item for $52 - see finding 2022-006), these were not compiled into an auditable list showing justification for the drawdown amounts. Auditors reviewed the profit and loss schedule for the year and were not able to identify a clear pattern between expenditures and drawdowns. Cause: Lack of procedures requiring supporting documentation. Effect: Reimbursement requests could be made for unallowed expenditures. Repeat Finding: No Recommendation: Implement process to ensure documentation is kept identifying which expenditures are included in reimbursement request. There should be a secondary individual (ED and contract accountant) involved in the process to ensure accuracy - documentation of the two-person preparation and review process should be documented. Implement procedures to document review of subrecipient payment requests and minimize time elapsed between requests and payments. Views of responsible officials: There is no disagreement with the audit finding.
Sufficient controls were not in place for the current fiscal year to ensure that requests for reimbursement were adequately supported by available documentation. The Uniform Guidance sets forth requirements for internal controls over federal programs in 2 CFR sections 200.303 and 200.302 that a grantee must establish and maintain records adequately reflecting the source and application of funds with information including authorizations, unobligated balances, expenditures, and income and that these be supported by source documentation that must be retained for three years from the final expenditure report. Requests for reimbursement and their supporting information could not be located for three of six reimbursement requests. We recommend that a standardized file and documentation system be implemented for all grant reimbursement requests containing the reimbursement request with evidence of review and authorization and including the supporting expenditure reports. The Academy responds that it has contracted with an accounting and administrative contractor who has implemented a recordkeeping system for grant reimbursement requests and related supporting documentation
Sufficient controls were not in place for the current fiscal year to ensure that requests for reimbursement were adequately supported by available documentation. The Uniform Guidance sets forth requirements for internal controls over federal programs in 2 CFR sections 200.303 and 200.302 that a grantee must establish and maintain records adequately reflecting the source and application of funds with information including authorizations, unobligated balances, expenditures, and income and that these be supported by source documentation that must be retained for three years from the final expenditure report. Requests for reimbursement and their supporting information could not be located for three of six reimbursement requests. We recommend that a standardized file and documentation system be implemented for all grant reimbursement requests containing the reimbursement request with evidence of review and authorization and including the supporting expenditure reports. The Academy responds that it has contracted with an accounting and administrative contractor who has implemented a recordkeeping system for grant reimbursement requests and related supporting documentation