Findings Citing § 200.302

Finding 2022-001 – Internal Controls over Grant Management (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Economic Development Administration Economic Development Cluster and U.S. Department of Health and Human Services FAL No 93.568 Low- Income Home Energy Assistance. 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: Central Alabama Regional Planning and Development Commission does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: Central Alabama Regional Planning and Development Commission has processes and procedures in place to administer grant funds but no written policies. Effect: Central Alabama Regional Planning and Development Commission is not in compliance with financial management system requirements. Recommendation: Central Alabama Regional Planning and Development Commission 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.

Finding 2022-001 – Internal Controls over Grant Management (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Economic Development Administration Economic Development Cluster and U.S. Department of Health and Human Services FAL No 93.568 Low- Income Home Energy Assistance. 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: Central Alabama Regional Planning and Development Commission does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: Central Alabama Regional Planning and Development Commission has processes and procedures in place to administer grant funds but no written policies. Effect: Central Alabama Regional Planning and Development Commission is not in compliance with financial management system requirements. Recommendation: Central Alabama Regional Planning and Development Commission 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.

Finding 2022-001 – Internal Controls over Grant Management (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Economic Development Administration Economic Development Cluster and U.S. Department of Health and Human Services FAL No 93.568 Low- Income Home Energy Assistance. 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: Central Alabama Regional Planning and Development Commission does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: Central Alabama Regional Planning and Development Commission has processes and procedures in place to administer grant funds but no written policies. Effect: Central Alabama Regional Planning and Development Commission is not in compliance with financial management system requirements. Recommendation: Central Alabama Regional Planning and Development Commission 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.

FINDING 2022-003 – Cash Draw Downs and Internal Control over Cash Management MATERIAL WEAKNESS, MATERIAL NONCOMPLIANCE Identification of the Federal Program: U.S. Department of Health and Human Services 93.224/93.527 Health Center Program Cluster Criteria: In accordance with 2 CFR Section 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the federal agency or pass-through entity and disbursement by the Center for program costs and proportionate share of allowable indirect costs. Additionally, 2 CFR Section 200.302(b)(c) requires non-federal entities to establish written procedures to implement the requirements 2 CFR Section 200.305. The Federal Acquisition Regulation clause at 48 CFR Section 52.2160-7(b)(1) requires that the non-federal entity request reimbursement for only allocable, allowable, and reasonable contract costs that have already been paid or incurred. Condition: During our testing of draw requests, we noted certain draw requests were made prior to the related costs being incurred. Although the funds were ultimately expended on items approved by the federal award, they were not expended in a timely manner. Cause: The Center did not maintain detailed listings of eligible costs incurred at the time of the draw request to support the amount requested in the Payment Management System. Additionally, the Center did not maintain documentation of such review or approval that such costs were incurred prior to the draw request, or the amount requested was in accordance with 2 CFR Section 200.305. Effect or Potential Effect: Requests for draws per the Payment Management System may not have minimized the time elapsing between payment by the federal agency or pass-through entity and disbursement by the Center and the amounts drawn down may be inaccurate. Questioned Costs: None Context: We selected a sample of draw requests submitted through the Payment Management System during the year ended September 30, 2022. The Center was unable to provide evidence of timely review and approval of two requests out of 44, totaling $352,340. Repeat Finding: No Recommendation: We recommend the Center establish formal internal controls and documentation of its performance relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who are knowledgeable of such requirements. View of Responsible Officials: See accompanying Corrective Action Plan.

FINDING 2022-003 – Cash Draw Downs and Internal Control over Cash Management MATERIAL WEAKNESS, MATERIAL NONCOMPLIANCE Identification of the Federal Program: U.S. Department of Health and Human Services 93.224/93.527 Health Center Program Cluster Criteria: In accordance with 2 CFR Section 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the federal agency or pass-through entity and disbursement by the Center for program costs and proportionate share of allowable indirect costs. Additionally, 2 CFR Section 200.302(b)(c) requires non-federal entities to establish written procedures to implement the requirements 2 CFR Section 200.305. The Federal Acquisition Regulation clause at 48 CFR Section 52.2160-7(b)(1) requires that the non-federal entity request reimbursement for only allocable, allowable, and reasonable contract costs that have already been paid or incurred. Condition: During our testing of draw requests, we noted certain draw requests were made prior to the related costs being incurred. Although the funds were ultimately expended on items approved by the federal award, they were not expended in a timely manner. Cause: The Center did not maintain detailed listings of eligible costs incurred at the time of the draw request to support the amount requested in the Payment Management System. Additionally, the Center did not maintain documentation of such review or approval that such costs were incurred prior to the draw request, or the amount requested was in accordance with 2 CFR Section 200.305. Effect or Potential Effect: Requests for draws per the Payment Management System may not have minimized the time elapsing between payment by the federal agency or pass-through entity and disbursement by the Center and the amounts drawn down may be inaccurate. Questioned Costs: None Context: We selected a sample of draw requests submitted through the Payment Management System during the year ended September 30, 2022. The Center was unable to provide evidence of timely review and approval of two requests out of 44, totaling $352,340. Repeat Finding: No Recommendation: We recommend the Center establish formal internal controls and documentation of its performance relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who are knowledgeable of such requirements. View of Responsible Officials: See accompanying Corrective Action Plan.

FINDING 2022-003 – Cash Draw Downs and Internal Control over Cash Management MATERIAL WEAKNESS, MATERIAL NONCOMPLIANCE Identification of the Federal Program: U.S. Department of Health and Human Services 93.224/93.527 Health Center Program Cluster Criteria: In accordance with 2 CFR Section 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the federal agency or pass-through entity and disbursement by the Center for program costs and proportionate share of allowable indirect costs. Additionally, 2 CFR Section 200.302(b)(c) requires non-federal entities to establish written procedures to implement the requirements 2 CFR Section 200.305. The Federal Acquisition Regulation clause at 48 CFR Section 52.2160-7(b)(1) requires that the non-federal entity request reimbursement for only allocable, allowable, and reasonable contract costs that have already been paid or incurred. Condition: During our testing of draw requests, we noted certain draw requests were made prior to the related costs being incurred. Although the funds were ultimately expended on items approved by the federal award, they were not expended in a timely manner. Cause: The Center did not maintain detailed listings of eligible costs incurred at the time of the draw request to support the amount requested in the Payment Management System. Additionally, the Center did not maintain documentation of such review or approval that such costs were incurred prior to the draw request, or the amount requested was in accordance with 2 CFR Section 200.305. Effect or Potential Effect: Requests for draws per the Payment Management System may not have minimized the time elapsing between payment by the federal agency or pass-through entity and disbursement by the Center and the amounts drawn down may be inaccurate. Questioned Costs: None Context: We selected a sample of draw requests submitted through the Payment Management System during the year ended September 30, 2022. The Center was unable to provide evidence of timely review and approval of two requests out of 44, totaling $352,340. Repeat Finding: No Recommendation: We recommend the Center establish formal internal controls and documentation of its performance relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who are knowledgeable of such requirements. View of Responsible Officials: See accompanying Corrective Action Plan.

FINDING 2022-003 – Cash Draw Downs and Internal Control over Cash Management MATERIAL WEAKNESS, MATERIAL NONCOMPLIANCE Identification of the Federal Program: U.S. Department of Health and Human Services 93.224/93.527 Health Center Program Cluster Criteria: In accordance with 2 CFR Section 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the federal agency or pass-through entity and disbursement by the Center for program costs and proportionate share of allowable indirect costs. Additionally, 2 CFR Section 200.302(b)(c) requires non-federal entities to establish written procedures to implement the requirements 2 CFR Section 200.305. The Federal Acquisition Regulation clause at 48 CFR Section 52.2160-7(b)(1) requires that the non-federal entity request reimbursement for only allocable, allowable, and reasonable contract costs that have already been paid or incurred. Condition: During our testing of draw requests, we noted certain draw requests were made prior to the related costs being incurred. Although the funds were ultimately expended on items approved by the federal award, they were not expended in a timely manner. Cause: The Center did not maintain detailed listings of eligible costs incurred at the time of the draw request to support the amount requested in the Payment Management System. Additionally, the Center did not maintain documentation of such review or approval that such costs were incurred prior to the draw request, or the amount requested was in accordance with 2 CFR Section 200.305. Effect or Potential Effect: Requests for draws per the Payment Management System may not have minimized the time elapsing between payment by the federal agency or pass-through entity and disbursement by the Center and the amounts drawn down may be inaccurate. Questioned Costs: None Context: We selected a sample of draw requests submitted through the Payment Management System during the year ended September 30, 2022. The Center was unable to provide evidence of timely review and approval of two requests out of 44, totaling $352,340. Repeat Finding: No Recommendation: We recommend the Center establish formal internal controls and documentation of its performance relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who are knowledgeable of such requirements. View of Responsible Officials: See accompanying Corrective Action Plan.

FINDING 2022-003 – Cash Draw Downs and Internal Control over Cash Management MATERIAL WEAKNESS, MATERIAL NONCOMPLIANCE Identification of the Federal Program: U.S. Department of Health and Human Services 93.224/93.527 Health Center Program Cluster Criteria: In accordance with 2 CFR Section 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the federal agency or pass-through entity and disbursement by the Center for program costs and proportionate share of allowable indirect costs. Additionally, 2 CFR Section 200.302(b)(c) requires non-federal entities to establish written procedures to implement the requirements 2 CFR Section 200.305. The Federal Acquisition Regulation clause at 48 CFR Section 52.2160-7(b)(1) requires that the non-federal entity request reimbursement for only allocable, allowable, and reasonable contract costs that have already been paid or incurred. Condition: During our testing of draw requests, we noted certain draw requests were made prior to the related costs being incurred. Although the funds were ultimately expended on items approved by the federal award, they were not expended in a timely manner. Cause: The Center did not maintain detailed listings of eligible costs incurred at the time of the draw request to support the amount requested in the Payment Management System. Additionally, the Center did not maintain documentation of such review or approval that such costs were incurred prior to the draw request, or the amount requested was in accordance with 2 CFR Section 200.305. Effect or Potential Effect: Requests for draws per the Payment Management System may not have minimized the time elapsing between payment by the federal agency or pass-through entity and disbursement by the Center and the amounts drawn down may be inaccurate. Questioned Costs: None Context: We selected a sample of draw requests submitted through the Payment Management System during the year ended September 30, 2022. The Center was unable to provide evidence of timely review and approval of two requests out of 44, totaling $352,340. Repeat Finding: No Recommendation: We recommend the Center establish formal internal controls and documentation of its performance relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who are knowledgeable of such requirements. View of Responsible Officials: See accompanying Corrective Action Plan.

2022-003—Excess Drawdown of Federal Funds Type of Finding: (F) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health and Human Services AL #: 93.137 – Community Programs to Improve Minority Health Grant Program Award #: 5 AIAMP170017-05-00 Award Period: 07/01/2021 – 07/29/2022 Estimated Questioned Costs: $26,426 Compliance Requirement: Cash Management Statement of Condition During our analysis of total grant revenues and expenditures reported on the SEFA, we noted that the entity had drawn down $26,426 more in federal funds than it expended under the Community Programs to Improve Minority Health grant. The excess drawdown remained outstanding as of September 30, 2022, the end of the audit period, and as of the date of this report. Criteria In accordance with 2 CFR § 200.305(b), non-federal entities must minimize the time elapsing between the drawdown of federal funds and the disbursement for program purposes. Additionally, per 2 CFR § 200.302(b)(6), entities must maintain effective internal controls over cash management to ensure that drawdowns are based on actual, allowable expenditures. Effect The entity is not in compliance with federal cash management requirements. The federal award has an outstanding overdrawn balance of $26,426, which may be subject to repayment to the federal awarding agency. Cause The excess drawdown appears to have resulted from an error during the drawdown request process. The entity indicated it was likely due to administrative oversight but was unable to provide specific details due to the passage of time. The discrepancy was disclosed to the auditor during the audit. Recommendation We recommend that the entity remit the excess federal funds or consult with the awarding agency to determine the appropriate resolution. In addition, the entity should strengthen its procedures to reconcile cash drawdowns to actual expenditures on a timely basis to prevent similar overdraws in the future.

Finding 2022 – 003: Activities Allowed and Unallowed, Allowable Costs, Period of Performance (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Condition: The Organization’s general ledger did not allow for sufficient identification of transactions related to the major program, Title V. Title V expenditures were recorded through journal entries without supporting transaction-level detail. Because of this, the population of expenditures could not be tied to individual transactions, and pulling samples from this population would not provide a reasonable basis for drawing conclusions about the population tested. As a result, we were unable to select transactions for testing or perform the necessary audit procedures to assess compliance with federal requirements. Questioned Costs: Unable to determine due to scope limitation. Cause: Staff turnover and the Organization’s recordkeeping practices did not ensure sufficient documentation was maintained to support federal compliance. Effect: Due to the lack of adequate documentation, we were unable to obtain sufficient, appropriate audit evidence to form an opinion on the Organization’s compliance with these requirements. Consequently, a disclaimed opinion on compliance was issued for this major program. Additionally, these expenditures may be subject to repayment or further review by the granting agency. Recommendation: We recommend that management strengthen documentation and recordkeeping procedures to ensure compliance with federal record retention requirements. The Organization should implement a standardized process for tracking federal grant expenditures, ensuring proper coding within the accounting system, conduct periodic internal reviews to verify completeness and accuracy of financial records, and provide training to finance staff on Uniform Guidance requirements for grant record retention and reporting. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022 – 003: Activities Allowed and Unallowed, Allowable Costs, Period of Performance (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Condition: The Organization’s general ledger did not allow for sufficient identification of transactions related to the major program, Title V. Title V expenditures were recorded through journal entries without supporting transaction-level detail. Because of this, the population of expenditures could not be tied to individual transactions, and pulling samples from this population would not provide a reasonable basis for drawing conclusions about the population tested. As a result, we were unable to select transactions for testing or perform the necessary audit procedures to assess compliance with federal requirements. Questioned Costs: Unable to determine due to scope limitation. Cause: Staff turnover and the Organization’s recordkeeping practices did not ensure sufficient documentation was maintained to support federal compliance. Effect: Due to the lack of adequate documentation, we were unable to obtain sufficient, appropriate audit evidence to form an opinion on the Organization’s compliance with these requirements. Consequently, a disclaimed opinion on compliance was issued for this major program. Additionally, these expenditures may be subject to repayment or further review by the granting agency. Recommendation: We recommend that management strengthen documentation and recordkeeping procedures to ensure compliance with federal record retention requirements. The Organization should implement a standardized process for tracking federal grant expenditures, ensuring proper coding within the accounting system, conduct periodic internal reviews to verify completeness and accuracy of financial records, and provide training to finance staff on Uniform Guidance requirements for grant record retention and reporting. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022 – 004: Procurement and Suspension and Debarment (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Additionally, per 2 CFR § 200.213, entities must verify that vendors and contractors receiving federal funds are not suspended or debarred by checking the System for Award Management (SAM) or obtaining vendor certifications. Condition: The Organization was unable to provide sufficient documentation to support compliance with federal procurement and suspension and debarment requirements for purchases made under the Title V program. The general ledger did not allow for sufficient identification of transactions related to the Title V program as all expenditures were recorded through journal entries without supporting transaction-level detail. Due to this limitation, we were unable to select procurement transactions for testing or verify whether vendors had been screened for suspension and debarment before contracts were awarded. Questioned Costs: Unable to determine due to scope limitation. Cause: The Organization did not maintain adequate financial records or procurement documentation to demonstrate compliance with Uniform Guidance requirements. The lack of a complete and detailed general ledger further limited the ability to track and substantiate transactions. Finding 2022 – 004: Procurement and Suspension and Debarment (Compliance; Internal Controls Over Compliance), continued Effect: Without sufficient documentation, the Organization was unable to demonstrate compliance with federal procurement regulations, increasing the risk of noncompliance and potential disallowed costs. Additionally, these expenditures may be subject to repayment or further review by the granting agency. Recommendation: We recommend the Organization strengthen its financial recordkeeping and procurement processes by implementing procedures to ensure a complete and accurate general ledger is maintained. This should include appropriate coding to identify federal program expenditures. The Organization should also establish and enforce procurement policies that align with Uniform Guidance, including documentation of procurement methods, price or cost analyses, and vendor selection, implementing a process to verify and document vendor suspension and debarment status before awarding federally funded contracts, and conducting periodic internal reviews to ensure compliance with procurement and recordkeeping requirements. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022 – 004: Procurement and Suspension and Debarment (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Additionally, per 2 CFR § 200.213, entities must verify that vendors and contractors receiving federal funds are not suspended or debarred by checking the System for Award Management (SAM) or obtaining vendor certifications. Condition: The Organization was unable to provide sufficient documentation to support compliance with federal procurement and suspension and debarment requirements for purchases made under the Title V program. The general ledger did not allow for sufficient identification of transactions related to the Title V program as all expenditures were recorded through journal entries without supporting transaction-level detail. Due to this limitation, we were unable to select procurement transactions for testing or verify whether vendors had been screened for suspension and debarment before contracts were awarded. Questioned Costs: Unable to determine due to scope limitation. Cause: The Organization did not maintain adequate financial records or procurement documentation to demonstrate compliance with Uniform Guidance requirements. The lack of a complete and detailed general ledger further limited the ability to track and substantiate transactions. Finding 2022 – 004: Procurement and Suspension and Debarment (Compliance; Internal Controls Over Compliance), continued Effect: Without sufficient documentation, the Organization was unable to demonstrate compliance with federal procurement regulations, increasing the risk of noncompliance and potential disallowed costs. Additionally, these expenditures may be subject to repayment or further review by the granting agency. Recommendation: We recommend the Organization strengthen its financial recordkeeping and procurement processes by implementing procedures to ensure a complete and accurate general ledger is maintained. This should include appropriate coding to identify federal program expenditures. The Organization should also establish and enforce procurement policies that align with Uniform Guidance, including documentation of procurement methods, price or cost analyses, and vendor selection, implementing a process to verify and document vendor suspension and debarment status before awarding federally funded contracts, and conducting periodic internal reviews to ensure compliance with procurement and recordkeeping requirements. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022 – 005: Reporting (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Condition: The Organization was unable to provide any of the required reports for the Title V program, including the financial report, activity narrative, third-party income report, GPRA/GPRAMA, urban data standards, and property inventory. Without these reports, we were unable to perform the necessary audit procedures to assess compliance with federal requirements. Questioned Costs: None. Cause: The Organization lacked sufficient record retention policies and failed to maintain the required documentation needed for reporting compliance. Effect: The Organization was unable to produce key reports necessary for compliance with grant and audit requirements. Recommendation: We recommend that the Organization implement stronger documentation and recordkeeping procedures to ensure compliance with federal reporting requirements. This should include: • ensuring that all required reports (e.g., financial reports, activity narratives, third-party income reports) are generated and retained according to Uniform Guidance, • establishing a process for regular internal reviews to verify the completeness and accuracy of required federal reports, and • providing staff with training on record retention and reporting obligations to ensure timely and accurate submissions. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022 – 005: Reporting (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Condition: The Organization was unable to provide any of the required reports for the Title V program, including the financial report, activity narrative, third-party income report, GPRA/GPRAMA, urban data standards, and property inventory. Without these reports, we were unable to perform the necessary audit procedures to assess compliance with federal requirements. Questioned Costs: None. Cause: The Organization lacked sufficient record retention policies and failed to maintain the required documentation needed for reporting compliance. Effect: The Organization was unable to produce key reports necessary for compliance with grant and audit requirements. Recommendation: We recommend that the Organization implement stronger documentation and recordkeeping procedures to ensure compliance with federal reporting requirements. This should include: • ensuring that all required reports (e.g., financial reports, activity narratives, third-party income reports) are generated and retained according to Uniform Guidance, • establishing a process for regular internal reviews to verify the completeness and accuracy of required federal reports, and • providing staff with training on record retention and reporting obligations to ensure timely and accurate submissions. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

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.