Finding 2022-002: Preparation of the Schedule of Federal Expenditures (SEFA) Criteria: In accordance with 2 CFR 200.302 (Financial Management) the auditee must be able to identify all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the assistance listing number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. Condition: During our review of the initial SEFA several errors came to our attention. There were multiple instances where the expenditures reported on the SEFA did not agree to the underlying supporting financial reports, and adjustments to the SEFA were required. Cause: During fiscal year 2022, the SEFA was not maintained with sufficient accuracy and detail. At year-end, there was insufficient review of the SEFA by the appropriate personnel who possess the necessary expertise. Effect or Potential Effect: Inaccurate and incomplete information on the SEFA could lead to unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: Undetermined Context: Our audit testwork consisted of substantive procedures over the Schedule of Expenditures of Federal Awards. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Yes - Findings 2020-002 and 2021-002. Recommendation: We recommend ABC review the SEFA and supporting schedules prior to the audit to ensure the SEFA is complete and all numbers are accurate and can be supported. Additionally, to reduce the risk of human error, we recommend all grant activity be tracked within the accounting system.
Finding 2022-005 Internal Controls Over Compliance for Cash Management, Allowable Costs, and Procurement Federal Program: 10.760 Water and Waste Disposal Systems for Rural Communities Condition: The City does not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget?s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regards to determining allowable costs, procurement procedures, and cash management. Criteria: 2 CFR ? 200.302(b) requires the City to have written procedures related to managing cash from federal awards, including determining the allowability of costs in accordance with 2 CFR 200 Subpart E ? Cost Principles. Additionally, 2 CFR ? 318(a) and (c), requires the City to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance, which includes written standards of conduct that cover conflicts of interest and govern the performance of individuals engaged in procurement. Cause: The City?s policies and procedures have not been formally drafted and updated in written form. Effect: Failure to have written policies and procedures resulted in the City?s noncompliance with the requirements of the Uniform Guidance. Context: This is a general requirement that pertains to most federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend that management adopt the referenced policies in order to comply with Uniform Guidance. Views of Responsible Officials And Planned Corrective Actions: Management agrees with the recommendation. See corresponding Corrective Action Plan.
Finding 2022-002: U.S. Department of Housing and Urban Development, Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects (Section 223(f)/207) Statement of Condition: Internal control processes over financial reporting did not ensure that all transactions were properly recorded. Criteria: The HUD Handbook 4370.2, Chapter 2 requires the books and accounts to be complete and accurate. Additionally, 2 CFR Part 200 Section 200.302 Financial Management states that the financial management system of each non-federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award in accordance with the reporting requirements. Additionally, 2 CFR Part 200 Section 200.303(a), Internal Controls, requires that non-federal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the non-federal entity is managing the award in compliance with federal statutes, regulations and the terms and conditions. Effect: Noncompliance with HUD and Uniform Guidance regulations. Cause: Management oversight. Context: A review of journal entries made during the year revealed journal entries made in the incorrect period and erroneous journal entries. Additionally, the review process of the Corporation's financial information did not discover these errors. Recommendation: We recommend management review/enhance its accounting and internal control procedures to ensure that all key accounts are reconciled and reviewed with supporting evidence of such review. Questioned Costs: N/A Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding and will review the accounting and financial procedures, system of internal controls and policies.
Unallowable Costs Significant Deficiency U.S. SMALL BUSINESS ASSOCIATION (SBA) ALN #: 59.077 Federal Award Identification #: COVID-19 Community Navigator Pilot Program (SBAHQ22CNP0036) Condition: The Organization charged and was reimbursed for grant expenses that were not paid. There also is not a clear trail from source document to expenditures charged to the federal grant. Criteria: CFR 200.302, 200.403 Questioned Costs: $17,984 Context: Out of $253,139 of non-payroll expenses charged to the grant and reimbursed, $17,984 was not yet paid to program beneficiaries. Cause: Financial management system is not adequate to track grant funds and expenses from source document to grant reimbursement. Effect: Potential for over charging the grant for expenses not allocable to the program or charging the same expense to multiple funding sources. Identification as repeat finding, if applicable: Not Applicable Recommendation: We recommend that the Organization track grant funds through a general ledger project designation to provide an audit trail from source document to grant revenue and allowable grant expenditures. We also recommend that the program beneficiaries be paid or the funds reimbursed be returned to the SBA. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Criteria or specific requirement: 2 CFR 200.302(b)(3) indicates that records that adequately identify the source and application of funds for federally funded activities are necessary. 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. Condition: Expenditures originally reported on Schedule of Expenditures of Federal Awards for the year ended December 31, 2021 were understated. In the fiscal year ended December 31, 2022, $1,389,172 of prior year expenditures associated with the Medicaid Cluster were included in the schedule of expenditures of federal awards. Questioned costs: None Context: Expenditures reported on the Schedule of Expenditures of Federal Awards for Assistance Listing Number 93.778 were understated by $ 1,389,172. Cause: Pueblo County?s SEFA reconciliation process inadvertently missed the complete population of expenditures. Effect: Expenditures reported on Schedule of Expenditures of Federal Awards were understated for the year ended December 31, 2021. Repeat Finding: No. Recommendation: CLA recommends the County implement tracking procedures to ensure all federal expenditures are reported on the Schedule of Expenditures of Federal Awards. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR 200.302(b)(3) indicates that records that adequately identify the source and application of funds for federally funded activities are necessary. 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. Condition: Expenditures originally reported on Schedule of Expenditures of Federal Awards for the year ended December 31, 2021 were understated. In the fiscal year ended December 31, 2022, $1,389,172 of prior year expenditures associated with the Medicaid Cluster were included in the schedule of expenditures of federal awards. Questioned costs: None Context: Expenditures reported on the Schedule of Expenditures of Federal Awards for Assistance Listing Number 93.778 were understated by $ 1,389,172. Cause: Pueblo County?s SEFA reconciliation process inadvertently missed the complete population of expenditures. Effect: Expenditures reported on Schedule of Expenditures of Federal Awards were understated for the year ended December 31, 2021. Repeat Finding: No. Recommendation: CLA recommends the County implement tracking procedures to ensure all federal expenditures are reported on the Schedule of Expenditures of Federal Awards. Views of responsible officials: There is no disagreement with the audit finding.
Criteria: 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, ?establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.? These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)?. Additionally, Uniform Guidance requires non-Federal entities receiving Federal funds to have certain written policies, procedures, and standards of conduct (policies) in place. Condition and Context: The Organization has been administering the federal award for over a decade and has hired knowledgeable programmatic staff who have created an environment which understands the mission and purpose of the program. These individuals have not adequately documented their policies and procedures to fully establish an appropriate system of internal control over compliance. This includes a lack of required written policies as well as inadequate documentation of routine control functions such as those items noted in 2022-002 below. The lack of written policies includes required policies under Uniform Guidance sections ?200.302 (b)(6), ?200.302 (b)(7), ?200.305 (b), ?200.319 (c)(1), ?200.319 (c)(2) and ?200.320 (d)(3). Cause and Effect: The lack of appropriate controls and documentation to support processes surrounding the use of federal funds may result in undetected or uncorrected misstatements or instances of noncompliance. The lack of adequate documentation resulted in finding 2022-002 below. Additionally, as the policies referenced above are not written, the Organization cannot be in compliance with the requirements. Recommendation: The Organization should consider implementing policies, procedures, and internal controls specific to federal awards. Policies should be implemented for all applicable compliance requirements, ensuring that there is appropriate documentation to support the controls taking place. We recommend the policies noted above be written by the Organization, approved by the Board of Directors, and included in the permanent files of the Organization. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation and has implemented their corrective actions as of the date the financial statements were available for issuance.
2022-001 Financial Management of Federal Awards ? Department of Health and Human Services Passed Through Research Foundation For Mental Hygiene, Inc. Opiod STR AL 93.788 ? Department of Health and Human Services Passed Through NYS OASAS Block Grants for Prevention and Treatment of Substance Abuse AL 93.959 ? Department of Health and Human Services Drug-Free Communities Support Program Grants AL 93.276 Criteria: 2CFR 200.302(b)(1) requires that entities must identify in its accounts all Federal awards received and expended, as well as the Federal programs under which they are received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the Federal award identification number and year, the name of the Federal agency and the name of the pass-through entity. 2CFR 200.303 states that entities must establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the awards are managed in compliance with statutes, regulations, and the terms and conditions of the award. Condition: The Council was not aware that the funds received under the above named grants were Federal awards and subject to the Uniform Guidance. The identification of the grant funds as Federal and the need for a Single Audit was made by the auditor engaged to perform the audit of the financial statements. There was no internal controls in place surrounding proper identification or management of Federal funding. Cause: This a new source of funding for the Council and they have not previously had experience with Single Audits or Federal requirements. Effect: If a grant recipient is not aware that funds received are Federal funds, there is a potential that they will not meet the various Federal requirements applicable to the program. This includes establishing and maintaining effective internal controls over the award, and complying with the federal statutes, regulations, terms and conditions of the awards. They will not be aware of the potential Single Audit requirement. Context: Some of the awards received were passed-through from other agencies so the initial source was not clear. Recommendation: We recommend that the Council establish a system for identifying the source of all grants. If there are Federal grants, they should educate themselves regarding the Uniform Guidance and the specific requirements of the program.
2022-001 Financial Management of Federal Awards ? Department of Health and Human Services Passed Through Research Foundation For Mental Hygiene, Inc. Opiod STR AL 93.788 ? Department of Health and Human Services Passed Through NYS OASAS Block Grants for Prevention and Treatment of Substance Abuse AL 93.959 ? Department of Health and Human Services Drug-Free Communities Support Program Grants AL 93.276 Criteria: 2CFR 200.302(b)(1) requires that entities must identify in its accounts all Federal awards received and expended, as well as the Federal programs under which they are received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the Federal award identification number and year, the name of the Federal agency and the name of the pass-through entity. 2CFR 200.303 states that entities must establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the awards are managed in compliance with statutes, regulations, and the terms and conditions of the award. Condition: The Council was not aware that the funds received under the above named grants were Federal awards and subject to the Uniform Guidance. The identification of the grant funds as Federal and the need for a Single Audit was made by the auditor engaged to perform the audit of the financial statements. There was no internal controls in place surrounding proper identification or management of Federal funding. Cause: This a new source of funding for the Council and they have not previously had experience with Single Audits or Federal requirements. Effect: If a grant recipient is not aware that funds received are Federal funds, there is a potential that they will not meet the various Federal requirements applicable to the program. This includes establishing and maintaining effective internal controls over the award, and complying with the federal statutes, regulations, terms and conditions of the awards. They will not be aware of the potential Single Audit requirement. Context: Some of the awards received were passed-through from other agencies so the initial source was not clear. Recommendation: We recommend that the Council establish a system for identifying the source of all grants. If there are Federal grants, they should educate themselves regarding the Uniform Guidance and the specific requirements of the program.
2022-001 Financial Management of Federal Awards ? Department of Health and Human Services Passed Through Research Foundation For Mental Hygiene, Inc. Opiod STR AL 93.788 ? Department of Health and Human Services Passed Through NYS OASAS Block Grants for Prevention and Treatment of Substance Abuse AL 93.959 ? Department of Health and Human Services Drug-Free Communities Support Program Grants AL 93.276 Criteria: 2CFR 200.302(b)(1) requires that entities must identify in its accounts all Federal awards received and expended, as well as the Federal programs under which they are received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the Federal award identification number and year, the name of the Federal agency and the name of the pass-through entity. 2CFR 200.303 states that entities must establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the awards are managed in compliance with statutes, regulations, and the terms and conditions of the award. Condition: The Council was not aware that the funds received under the above named grants were Federal awards and subject to the Uniform Guidance. The identification of the grant funds as Federal and the need for a Single Audit was made by the auditor engaged to perform the audit of the financial statements. There was no internal controls in place surrounding proper identification or management of Federal funding. Cause: This a new source of funding for the Council and they have not previously had experience with Single Audits or Federal requirements. Effect: If a grant recipient is not aware that funds received are Federal funds, there is a potential that they will not meet the various Federal requirements applicable to the program. This includes establishing and maintaining effective internal controls over the award, and complying with the federal statutes, regulations, terms and conditions of the awards. They will not be aware of the potential Single Audit requirement. Context: Some of the awards received were passed-through from other agencies so the initial source was not clear. Recommendation: We recommend that the Council establish a system for identifying the source of all grants. If there are Federal grants, they should educate themselves regarding the Uniform Guidance and the specific requirements of the program.
FINDING 2022-004 ? CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS - REPORTING Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (ALN Number: 21.027) Federal Agency: Department of Treasury Federal Award Number (or Other Identifying Number): N/A Pass-Through Entity: State Budget Agency Audit Finding: 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: During testing, we noted the County did not have a review control in place to ensure accuracy and completeness of the quarterly reporting requirements. Questioned Cost: None.Context: There was no documented review by someone other than the preparers of the Project and Expenditure Report to ensure the information submitted was accurate and complete. The reports are prepared and submitted by the County Attorney without secondary review. As a result, one of the quarterly reports selected for testing, out of a sample of two reports, was overstated by $247,770 in one period due to improper inclusion of an expenditure made in a subsequent month. This timing error was corrected on the next quarterly support and similar errors were not identified in subsequent quarters. Final reporting of total expenditures was accurate. Effect: The failure to establish an effective internal control system placed the County at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the program. Cause: Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the compliance requirements listed above for the full period under audit. Repeat Finding: No. Recommendation: We recommended that the County's management establish a system of internal control to ensure compliance with the grant agreement and the compliance requirements listed above. We recommend an individual other than the County Attorney perform a documented review of the report prior to submission. Views of Responsible Officials: Management concurs with this finding. See the corrective action plan.
Finding 2022-002: Year-End Closing Information on the Federal Programs: 93.070 Criteria: In accordance with CFR 200.302 the financial management system of each non-Federal entity must provide for effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. Condition: At the commencement of the audit, we noted certain schedules included variances from the trial balance. We posted three entries resulting in a net decrease to net income of $38,647. Cause: Certain accounts and schedules had not been fully reconciled prior to the commencement of the audit. Effect or Potential Effect: Effective year-end closing procedures are important to avoid potential loss of Federal funds. Questioned Costs: Undetermined Context: APC's closing process did not identify some changes necessary. Identification as a Repeat Finding: N/A Recommendation: We recommend that APC pay additional attention to the closing process to ensure that all accounts are reconciled in advance of the audit. Review and approval procedures should be in place to ensure that errors are detected. We recommend that approval of key reconciliations be documented.
Finding 2022-002: Year-End Closing Information on the Federal Programs: 93.070 Criteria: In accordance with CFR 200.302 the financial management system of each non-Federal entity must provide for effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. Condition: At the commencement of the audit, we noted certain schedules included variances from the trial balance. We posted three entries resulting in a net decrease to net income of $38,647. Cause: Certain accounts and schedules had not been fully reconciled prior to the commencement of the audit. Effect or Potential Effect: Effective year-end closing procedures are important to avoid potential loss of Federal funds. Questioned Costs: Undetermined Context: APC's closing process did not identify some changes necessary. Identification as a Repeat Finding: N/A Recommendation: We recommend that APC pay additional attention to the closing process to ensure that all accounts are reconciled in advance of the audit. Review and approval procedures should be in place to ensure that errors are detected. We recommend that approval of key reconciliations be documented.
FINDING 2022-003 Subject: Water and Waste Disposal Systems for Rural Communities - Reporting Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): CY 2020 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-004. Condition and Context The Town had not designed or implemented adequate internal controls and procedures to ensure that reports were prepared, accurate, and submitted in accordance with the applicable compliance requirements for the federal grant. The United States Department of Agriculture (USDA) requires the following two financial reports be submitted annually: 1. Statement of Budget, Income and Equity, (Form RD 442-2) 2. Balance Sheet (Form RD 442-3) The Form RD 442-2 covers financial operations relating to the borrower's water or waste disposal project. The Form RD 442-3 presents the financial status of the borrower's water or waste disposal project. In both instances, a borrower may submit the financial data on other forms, provided the forms are in a similar format and signed and dated by the organization's official to certify the correctness of the information. Alternatively, an annual audit may be submitted in lieu of the forms. The Town was required to file each report, as noted above, during the audit period. Both reports were selected for testing. Per inquiry with the Town and review of its records, the Town attempted to prepare Form RD 442-2; however, the report was never completed, nor was it filed with the appropriate authorities. Additionally, the Town did not file or even attempt to prepare Form RD 442-3. Neither alternative reports nor a financial statement were submitted to the USDA in lieu of the forms. The lack of internal controls and noncompliance were systemic issues, which occurred throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 7 CFR 1780.47 states in part: "Borrower accounting methods, management reporting and audits. . . . (e) Borrowers exempt from audits. All borrowers who are exempt from audits, will, within 60 days following the end of each fiscal year, furnish the RUS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense by an appropriate official of the organization. Forms RD 442-2, 'Statement of Budget, Income and Equity,' and 442-3 may be used. (f) Management reports. These reports will furnish management with a means of evaluating prior decisions and serve as a basis for planning future operations and financial strategies. In those cases where revenues from multiple sources are pledged as security for an RUS loan, two reports will be required; one for the project being financed by RUS and one combining the entire operation of the borrower. In those cases where RUS loans are secured by general obligation bonds or assessments and the borrower combines revenues from all sources, one management report combining all such revenues is acceptable. The following management data will be submitted by the borrower to the processing office. These reports at a minimum will include a balance sheet and income and expense statement. . . . (2) Annual management reports. Prior to the beginning of each fiscal year the following will be submitted to the processing office. (If Form RD 442-2 is used as the annual management report, enter data in column three only of Schedule 1, and complete all of Schedule 2.) (i) Two copies of the management reports and proposed 'Annual Budget.' (ii) Financial information may be reported on Form RD 442-2 which includes Schedule 1, 'Statement of Budget, Income and Equity' and Schedule 2, 'Projected Cash Flow' or information in similar format. (iii) A copy of the rate schedule in effect at the time of submission. (g) Substitute for management reports. When RUS loans are secured by the general obligation of the public body or tax assessments which total 100 percent of the debt service requirements, the State program official may authorize an annual audit to substitute for other management reports if the audit is received within nine months after the end of the audit period." Cause A proper system of internal controls was not designed by management of the Town. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the Town's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, required reports were not filed with the USDA. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town establish a proper system of internal controls and develop policies and procedures to ensure required reports, or allowable alternatives are completed and filed with the USDA. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-007 Subject: CDBG - Entitlement Grants Cluster - Reporting Federal Agency: Department of Housing and Urban Development Federal Programs: Community Development Block Grants/Entitlement Grants, COVID-19 - Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Years (or Other Identifying Numbers): B-19-MC-18-0015, B-20-MC-20-0015, B-20-MW-18-0015, B-21-MC-18-0015, B-22-MC-18-0015 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-004. Condition and Context Financial Reporting For each CDBG award, the City is required to submit financial reports to Housing and Urban Development (HUD). The financial reports to be submitted are a quarterly CDBG Cash on Hand (PR29) report and an annual CDBG Financial Summary (PR26). The Community Development Specialist prepared the annual PR26 and quarterly PR29 reports without evidence of a review or an approval process to ensure accuracy of the reports submitted. During the audit period, there were three PR26 reports and six PR29 reports due. Four reports were selected for testing, two PR26 reports and two PR29 reports. One of the two PR26 reports was not supported by the City's records, and one of the two PR29 reports contained errors when reporting cash on hand. Performance Reporting The City is required to enter HUD 60002, Section 3 Summary Report, Economic Opportunities for Low- and Very Low-Income Persons report (Section 3) activities on the closeout screens in the Integrated Disbursement and Information System (IDIS), as well as within the Consolidated Annual Performance and Evaluation Report (CAPER). The Section 3 report was not submitted on the closeout screens in the IDIS as part of the closeout process. The City did submit the Section 3 information within the CAPER; however, the Section 3 information was not supported by the City's records. The City was not able to provide documentation supporting the Section 3 information in the CAPER. Special Reporting for Federal Funding Accountability and Transparency Act (FFATA) Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282) (Transparency Act), recipients (i.e., direct recipients) of grants or cooperative agreements who make first tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through the FSRS. INDIANA STATE BOARD OF ACCOUNTS 28 CITY OF ELKHART SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) There were two subawards that required submission in the FSRS during the audit period. The due date for the information was August 31, 2022, and November 30, 2022, respectively. The information was completed and submitted by the City; however, there was no documentation of the review or oversight process in place to ensure the accuracy of the information submitted. (See Report PDF for Schedule.) The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause A proper system of internal controls was not designed by management of the City. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, required reports were not accurate nor submitted timely. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City design and implement a proper system of internal control, including policies and procedures that would provide segregation of duties to ensure required reports are submitted timely and accurately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-007 Subject: CDBG - Entitlement Grants Cluster - Reporting Federal Agency: Department of Housing and Urban Development Federal Programs: Community Development Block Grants/Entitlement Grants, COVID-19 - Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Years (or Other Identifying Numbers): B-19-MC-18-0015, B-20-MC-20-0015, B-20-MW-18-0015, B-21-MC-18-0015, B-22-MC-18-0015 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-004. Condition and Context Financial Reporting For each CDBG award, the City is required to submit financial reports to Housing and Urban Development (HUD). The financial reports to be submitted are a quarterly CDBG Cash on Hand (PR29) report and an annual CDBG Financial Summary (PR26). The Community Development Specialist prepared the annual PR26 and quarterly PR29 reports without evidence of a review or an approval process to ensure accuracy of the reports submitted. During the audit period, there were three PR26 reports and six PR29 reports due. Four reports were selected for testing, two PR26 reports and two PR29 reports. One of the two PR26 reports was not supported by the City's records, and one of the two PR29 reports contained errors when reporting cash on hand. Performance Reporting The City is required to enter HUD 60002, Section 3 Summary Report, Economic Opportunities for Low- and Very Low-Income Persons report (Section 3) activities on the closeout screens in the Integrated Disbursement and Information System (IDIS), as well as within the Consolidated Annual Performance and Evaluation Report (CAPER). The Section 3 report was not submitted on the closeout screens in the IDIS as part of the closeout process. The City did submit the Section 3 information within the CAPER; however, the Section 3 information was not supported by the City's records. The City was not able to provide documentation supporting the Section 3 information in the CAPER. Special Reporting for Federal Funding Accountability and Transparency Act (FFATA) Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282) (Transparency Act), recipients (i.e., direct recipients) of grants or cooperative agreements who make first tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through the FSRS. INDIANA STATE BOARD OF ACCOUNTS 28 CITY OF ELKHART SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) There were two subawards that required submission in the FSRS during the audit period. The due date for the information was August 31, 2022, and November 30, 2022, respectively. The information was completed and submitted by the City; however, there was no documentation of the review or oversight process in place to ensure the accuracy of the information submitted. (See Report PDF for Schedule.) The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause A proper system of internal controls was not designed by management of the City. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, required reports were not accurate nor submitted timely. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City design and implement a proper system of internal control, including policies and procedures that would provide segregation of duties to ensure required reports are submitted timely and accurately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding No. 2022-003 ? Lacking Certifications for Direct Assistance Provided to Individuals Federal Agency: Department of Education Department of the Treasury Federal Program: 84.235 Rehabilitation Services Demonstration and Training Program 21.023 Emergency Rental Assistance Type of Finding: Material Weakness in Internal Control over Compliance Finding: Internal control processes of over compliance did not ensure all client certification forms for federal assistance received were signed by tenants or completed in their entirety. Criteria: Per guidance in 2 CFR 200.302: The non-federal entity?s financial management systems, including records documenting compliance with federal statutes must be sufficient to permit the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the terms and conditions of the federal award. Condition and context: The Organization did not obtain a certification of actual final rent amounts received by landlords or tenants for total rent assistance payments received under the Emergency Rental Assistance program. The rent assistance accounting forms that were used by management included a tenant signature line, which would have provided a certification of the total amount of assistance provided, but no signatures were present on any of the forms tested. The Organization also did not obtain a certification acknowledging receipt of gift card funds from 12 of 25 gift card program recipients tested for the Rehabilitation Services Demonstration and Training Program. Sample Size and Population: We selected 6 rent assistance payments out of a population of 27 payments made under the Emergency Rental Assistance program during 2022. We selected 25 of 45 gift cards funded by the Rehabilitation Services Demonstration and Training Program during 2022. Cause: The Organization?s internal controls over obtaining certifications from federal award program recipients were not designed to ensure all recipients document their attestation as to the amount and date of funds received. Effect: The lack of controls over documentation of federal funds received could result in funds being distributed to ineligible individuals for federal assistance, or fraudulent use of funds. In addition, landlords receiving assistance for multiple months? future rents could charge tenants in duplicate for certain months? rents. Questioned Costs: $357 Recommendation: Management and those charged with governance should consider increasing the controls around the disbursement of funds to clients in the form of direct assistance via gift cards or check payments, and particularly obtaining and retaining signatures or adequate similar documentation directly from recipients for each disbursement received. Views of Management and Corrective Action Plan: Management?s response is reported in the ?Corrective Action Plan? at the end of this report. Contact Person: Ginger Kwan, Executive Director
Finding No. 2022-003 ? Lacking Certifications for Direct Assistance Provided to Individuals Federal Agency: Department of Education Department of the Treasury Federal Program: 84.235 Rehabilitation Services Demonstration and Training Program 21.023 Emergency Rental Assistance Type of Finding: Material Weakness in Internal Control over Compliance Finding: Internal control processes of over compliance did not ensure all client certification forms for federal assistance received were signed by tenants or completed in their entirety. Criteria: Per guidance in 2 CFR 200.302: The non-federal entity?s financial management systems, including records documenting compliance with federal statutes must be sufficient to permit the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the terms and conditions of the federal award. Condition and context: The Organization did not obtain a certification of actual final rent amounts received by landlords or tenants for total rent assistance payments received under the Emergency Rental Assistance program. The rent assistance accounting forms that were used by management included a tenant signature line, which would have provided a certification of the total amount of assistance provided, but no signatures were present on any of the forms tested. The Organization also did not obtain a certification acknowledging receipt of gift card funds from 12 of 25 gift card program recipients tested for the Rehabilitation Services Demonstration and Training Program. Sample Size and Population: We selected 6 rent assistance payments out of a population of 27 payments made under the Emergency Rental Assistance program during 2022. We selected 25 of 45 gift cards funded by the Rehabilitation Services Demonstration and Training Program during 2022. Cause: The Organization?s internal controls over obtaining certifications from federal award program recipients were not designed to ensure all recipients document their attestation as to the amount and date of funds received. Effect: The lack of controls over documentation of federal funds received could result in funds being distributed to ineligible individuals for federal assistance, or fraudulent use of funds. In addition, landlords receiving assistance for multiple months? future rents could charge tenants in duplicate for certain months? rents. Questioned Costs: $357 Recommendation: Management and those charged with governance should consider increasing the controls around the disbursement of funds to clients in the form of direct assistance via gift cards or check payments, and particularly obtaining and retaining signatures or adequate similar documentation directly from recipients for each disbursement received. Views of Management and Corrective Action Plan: Management?s response is reported in the ?Corrective Action Plan? at the end of this report. Contact Person: Ginger Kwan, Executive Director
Finding 2022-004: Material Weakness – Cash Management Cluster: Research and Development Cluster Assistance Listing: 93.084 Agency: Centers for Disease Control and Prevention Program: Prevention of Disease, Disability, and Death by Infectious Diseases Award Number: 1 U01CK000589-01-00, 6 U01CK000589-01-01, 6 U01CK000589-02-01, 5 U01CK000589- 02-00, 20U01CK00058920CV, 20U01CK00058921C3. Grant year: 2022 Assistance Listing: 47.070 Agency: National Science Foundation Program: Expeditions: Collaborative Research: Global Pervasive Computational Epidemiology. Award Number: 1918628 Grant year: 2021 Criteria: As required by 2 CFR 200.302(b)(4) of Financial Management, the non-federal entity must exercise effective control over, and accountability for, all federal funds. Per 2 CFR. 200.303(a), the non-federal entity should use the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as a guideline. The COSO guideline indicates that proper segregation of duties between initiating and authorizing is a best practice as well as retaining documentation of performance and authorization controls. Condition: The Director of Finance both initiated and authorized cash draws of federal funds during the grant year. There was no supporting documentation of approval by an appropriate second party. 35 Cause: Lack of segregation of incompatible tasks. Effect: Lack of internal controls around supervising and authorizing cash management could result in mismanagement of federal funds. Context: Statistical sampling was not used, however, sampling in accordance with AICPA guidelines was applied. Questioned costs: There are no questioned costs associated with this finding. Repeat finding: This is a repeat finding. Recommendation: Initiating, authorizing, and recording should not be done by the same individual. Segregation of incompatible tasks should be implemented so that authorization and review of cash draws of federal funds is done by someone other than the individual who initiates and records the transaction. Management’s response (unaudited): Based on previous year’s finding, the management has implemented necessary remediation steps post the fiscal year-end. Accordingly, this finding remain unresolved as at the year-end
Finding 2022-004: Material Weakness – Cash Management Cluster: Research and Development Cluster Assistance Listing: 93.084 Agency: Centers for Disease Control and Prevention Program: Prevention of Disease, Disability, and Death by Infectious Diseases Award Number: 1 U01CK000589-01-00, 6 U01CK000589-01-01, 6 U01CK000589-02-01, 5 U01CK000589- 02-00, 20U01CK00058920CV, 20U01CK00058921C3. Grant year: 2022 Assistance Listing: 47.070 Agency: National Science Foundation Program: Expeditions: Collaborative Research: Global Pervasive Computational Epidemiology. Award Number: 1918628 Grant year: 2021 Criteria: As required by 2 CFR 200.302(b)(4) of Financial Management, the non-federal entity must exercise effective control over, and accountability for, all federal funds. Per 2 CFR. 200.303(a), the non-federal entity should use the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as a guideline. The COSO guideline indicates that proper segregation of duties between initiating and authorizing is a best practice as well as retaining documentation of performance and authorization controls. Condition: The Director of Finance both initiated and authorized cash draws of federal funds during the grant year. There was no supporting documentation of approval by an appropriate second party. 35 Cause: Lack of segregation of incompatible tasks. Effect: Lack of internal controls around supervising and authorizing cash management could result in mismanagement of federal funds. Context: Statistical sampling was not used, however, sampling in accordance with AICPA guidelines was applied. Questioned costs: There are no questioned costs associated with this finding. Repeat finding: This is a repeat finding. Recommendation: Initiating, authorizing, and recording should not be done by the same individual. Segregation of incompatible tasks should be implemented so that authorization and review of cash draws of federal funds is done by someone other than the individual who initiates and records the transaction. Management’s response (unaudited): Based on previous year’s finding, the management has implemented necessary remediation steps post the fiscal year-end. Accordingly, this finding remain unresolved as at the year-end
Finding 2022-004: Material Weakness – Cash Management Cluster: Research and Development Cluster Assistance Listing: 93.084 Agency: Centers for Disease Control and Prevention Program: Prevention of Disease, Disability, and Death by Infectious Diseases Award Number: 1 U01CK000589-01-00, 6 U01CK000589-01-01, 6 U01CK000589-02-01, 5 U01CK000589- 02-00, 20U01CK00058920CV, 20U01CK00058921C3. Grant year: 2022 Assistance Listing: 47.070 Agency: National Science Foundation Program: Expeditions: Collaborative Research: Global Pervasive Computational Epidemiology. Award Number: 1918628 Grant year: 2021 Criteria: As required by 2 CFR 200.302(b)(4) of Financial Management, the non-federal entity must exercise effective control over, and accountability for, all federal funds. Per 2 CFR. 200.303(a), the non-federal entity should use the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as a guideline. The COSO guideline indicates that proper segregation of duties between initiating and authorizing is a best practice as well as retaining documentation of performance and authorization controls. Condition: The Director of Finance both initiated and authorized cash draws of federal funds during the grant year. There was no supporting documentation of approval by an appropriate second party. 35 Cause: Lack of segregation of incompatible tasks. Effect: Lack of internal controls around supervising and authorizing cash management could result in mismanagement of federal funds. Context: Statistical sampling was not used, however, sampling in accordance with AICPA guidelines was applied. Questioned costs: There are no questioned costs associated with this finding. Repeat finding: This is a repeat finding. Recommendation: Initiating, authorizing, and recording should not be done by the same individual. Segregation of incompatible tasks should be implemented so that authorization and review of cash draws of federal funds is done by someone other than the individual who initiates and records the transaction. Management’s response (unaudited): Based on previous year’s finding, the management has implemented necessary remediation steps post the fiscal year-end. Accordingly, this finding remain unresolved as at the year-end
Finding 2022-004: Material Weakness – Cash Management Cluster: Research and Development Cluster Assistance Listing: 93.084 Agency: Centers for Disease Control and Prevention Program: Prevention of Disease, Disability, and Death by Infectious Diseases Award Number: 1 U01CK000589-01-00, 6 U01CK000589-01-01, 6 U01CK000589-02-01, 5 U01CK000589- 02-00, 20U01CK00058920CV, 20U01CK00058921C3. Grant year: 2022 Assistance Listing: 47.070 Agency: National Science Foundation Program: Expeditions: Collaborative Research: Global Pervasive Computational Epidemiology. Award Number: 1918628 Grant year: 2021 Criteria: As required by 2 CFR 200.302(b)(4) of Financial Management, the non-federal entity must exercise effective control over, and accountability for, all federal funds. Per 2 CFR. 200.303(a), the non-federal entity should use the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as a guideline. The COSO guideline indicates that proper segregation of duties between initiating and authorizing is a best practice as well as retaining documentation of performance and authorization controls. Condition: The Director of Finance both initiated and authorized cash draws of federal funds during the grant year. There was no supporting documentation of approval by an appropriate second party. 35 Cause: Lack of segregation of incompatible tasks. Effect: Lack of internal controls around supervising and authorizing cash management could result in mismanagement of federal funds. Context: Statistical sampling was not used, however, sampling in accordance with AICPA guidelines was applied. Questioned costs: There are no questioned costs associated with this finding. Repeat finding: This is a repeat finding. Recommendation: Initiating, authorizing, and recording should not be done by the same individual. Segregation of incompatible tasks should be implemented so that authorization and review of cash draws of federal funds is done by someone other than the individual who initiates and records the transaction. Management’s response (unaudited): Based on previous year’s finding, the management has implemented necessary remediation steps post the fiscal year-end. Accordingly, this finding remain unresolved as at the year-end
Finding 2022-004: Material Weakness – Cash Management Cluster: Research and Development Cluster Assistance Listing: 93.084 Agency: Centers for Disease Control and Prevention Program: Prevention of Disease, Disability, and Death by Infectious Diseases Award Number: 1 U01CK000589-01-00, 6 U01CK000589-01-01, 6 U01CK000589-02-01, 5 U01CK000589- 02-00, 20U01CK00058920CV, 20U01CK00058921C3. Grant year: 2022 Assistance Listing: 47.070 Agency: National Science Foundation Program: Expeditions: Collaborative Research: Global Pervasive Computational Epidemiology. Award Number: 1918628 Grant year: 2021 Criteria: As required by 2 CFR 200.302(b)(4) of Financial Management, the non-federal entity must exercise effective control over, and accountability for, all federal funds. Per 2 CFR. 200.303(a), the non-federal entity should use the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as a guideline. The COSO guideline indicates that proper segregation of duties between initiating and authorizing is a best practice as well as retaining documentation of performance and authorization controls. Condition: The Director of Finance both initiated and authorized cash draws of federal funds during the grant year. There was no supporting documentation of approval by an appropriate second party. 35 Cause: Lack of segregation of incompatible tasks. Effect: Lack of internal controls around supervising and authorizing cash management could result in mismanagement of federal funds. Context: Statistical sampling was not used, however, sampling in accordance with AICPA guidelines was applied. Questioned costs: There are no questioned costs associated with this finding. Repeat finding: This is a repeat finding. Recommendation: Initiating, authorizing, and recording should not be done by the same individual. Segregation of incompatible tasks should be implemented so that authorization and review of cash draws of federal funds is done by someone other than the individual who initiates and records the transaction. Management’s response (unaudited): Based on previous year’s finding, the management has implemented necessary remediation steps post the fiscal year-end. Accordingly, this finding remain unresolved as at the year-end
Finding 2022-004: Material Weakness – Cash Management Cluster: Research and Development Cluster Assistance Listing: 93.084 Agency: Centers for Disease Control and Prevention Program: Prevention of Disease, Disability, and Death by Infectious Diseases Award Number: 1 U01CK000589-01-00, 6 U01CK000589-01-01, 6 U01CK000589-02-01, 5 U01CK000589- 02-00, 20U01CK00058920CV, 20U01CK00058921C3. Grant year: 2022 Assistance Listing: 47.070 Agency: National Science Foundation Program: Expeditions: Collaborative Research: Global Pervasive Computational Epidemiology. Award Number: 1918628 Grant year: 2021 Criteria: As required by 2 CFR 200.302(b)(4) of Financial Management, the non-federal entity must exercise effective control over, and accountability for, all federal funds. Per 2 CFR. 200.303(a), the non-federal entity should use the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as a guideline. The COSO guideline indicates that proper segregation of duties between initiating and authorizing is a best practice as well as retaining documentation of performance and authorization controls. Condition: The Director of Finance both initiated and authorized cash draws of federal funds during the grant year. There was no supporting documentation of approval by an appropriate second party. 35 Cause: Lack of segregation of incompatible tasks. Effect: Lack of internal controls around supervising and authorizing cash management could result in mismanagement of federal funds. Context: Statistical sampling was not used, however, sampling in accordance with AICPA guidelines was applied. Questioned costs: There are no questioned costs associated with this finding. Repeat finding: This is a repeat finding. Recommendation: Initiating, authorizing, and recording should not be done by the same individual. Segregation of incompatible tasks should be implemented so that authorization and review of cash draws of federal funds is done by someone other than the individual who initiates and records the transaction. Management’s response (unaudited): Based on previous year’s finding, the management has implemented necessary remediation steps post the fiscal year-end. Accordingly, this finding remain unresolved as at the year-end
Finding 2022-004: Material Weakness – Cash Management Cluster: Research and Development Cluster Assistance Listing: 93.084 Agency: Centers for Disease Control and Prevention Program: Prevention of Disease, Disability, and Death by Infectious Diseases Award Number: 1 U01CK000589-01-00, 6 U01CK000589-01-01, 6 U01CK000589-02-01, 5 U01CK000589- 02-00, 20U01CK00058920CV, 20U01CK00058921C3. Grant year: 2022 Assistance Listing: 47.070 Agency: National Science Foundation Program: Expeditions: Collaborative Research: Global Pervasive Computational Epidemiology. Award Number: 1918628 Grant year: 2021 Criteria: As required by 2 CFR 200.302(b)(4) of Financial Management, the non-federal entity must exercise effective control over, and accountability for, all federal funds. Per 2 CFR. 200.303(a), the non-federal entity should use the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as a guideline. The COSO guideline indicates that proper segregation of duties between initiating and authorizing is a best practice as well as retaining documentation of performance and authorization controls. Condition: The Director of Finance both initiated and authorized cash draws of federal funds during the grant year. There was no supporting documentation of approval by an appropriate second party. 35 Cause: Lack of segregation of incompatible tasks. Effect: Lack of internal controls around supervising and authorizing cash management could result in mismanagement of federal funds. Context: Statistical sampling was not used, however, sampling in accordance with AICPA guidelines was applied. Questioned costs: There are no questioned costs associated with this finding. Repeat finding: This is a repeat finding. Recommendation: Initiating, authorizing, and recording should not be done by the same individual. Segregation of incompatible tasks should be implemented so that authorization and review of cash draws of federal funds is done by someone other than the individual who initiates and records the transaction. Management’s response (unaudited): Based on previous year’s finding, the management has implemented necessary remediation steps post the fiscal year-end. Accordingly, this finding remain unresolved as at the year-end
Criteria: Uniform Guidance requires written procedures for cash management and determining the allowability of costs in accordance with Subpart E – Cost Principals. Condition: Multipli Credit Union did not have written procedures for cash management (2 CFR 200.302(b)(6)) and allowable costs determination (2 CFR 200.302(b)(7)) in accordance with Uniform Guidance requirements. Questioned Costs: $0 Cause: Multipli Credit Union’s written policies and procedures were not updated to include required Uniform Guidance policies. Effect: Employees of Multipli Credit Union could enter into a transaction that is not in compliance with Uniform Guidance requirements. Recommendation: We recommend Multipli Credit Union draft and adopt written procedures in accordance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and is in process of developing and implementing the appropriate policies and procedures.
2022-005 – Department of Health and Human Services CFDA #93.829 Section 223 Demonstration Programs to Improve Community Health Services (CCBHC) Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance Criteria – CFR 200.303 establishes that the entity must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. In addition, 2 CFR 200.302(b)(6) establishes that the financial management system of the entity must provide written procedures to implement the requirements of 2 CFR 200.305 regarding procurement. The entity should also maintain effective internal controls to determine that payments of federal awards are not made to vendors who are suspended or debarred from federal contracts. Condition – Rimrock Foundation does not have formally documented written internal control procedures over compliance with federal award programs to meet the requirements noted above regarding compliance with federal regulations for procurement, suspension and debarment. Cause – Rimrock Foundation was not aware of certain requirements under 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements regarding procurement for federal awards and did not implement controls to review vendors for suspension or debarment. Effect – Inadequate documentation of controls over these compliance areas may result in a reasonable possibility that Rimrock Foundation may not be able to detect and correct noncompliance with federal regulations regarding the use of federal funds in a timely manner and could contract with a vendor who has been suspended and debarred from federal contracts. Questioned Costs – None reported Context/Sampling – A nonstatistical sample of 3 contracts was selected, from expenditures in the reports submitted to the Substance Abuse and Mental Health Services Administration, for testing of controls over procurement of contracts which use federal funds. None of the contracts were reviewed for compliance with federal regulations and none of the vendors were reviewed for suspension and debarment prior to submission. Repeat Finding from Prior Year – Yes. Recommendation –Rimrock Foundation should establish and maintain effective internal control over federal awards that provides reasonable assurance that it is managing all federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. In addition, 2 CFR 200.302(b)(6) establishes that the financial management system must provide written procedures to implement the requirements of 2 CFR 200.305 regarding procurement. As part of those controls, Rimrock Foundation should also determine that payments of federal awards are not made to vendors who are suspended or debarred from federal contracts. Views of Responsible Officials – Management agrees with the finding.
2022-001 Written Uniform Guidance Policies and Procedures Federal Program: Department of Health and Human Services Federal Assistance Listing 93.575 - Child Care and Development Block Grant Criteria: Uniform Guidance requires written procedures for cash management and determining the allowability of costs in accordance with Subpart E - Cost Principles. Condition: Ozarks Regional YMCA did not have written procedures for cash management (2 CFR 200.302(b)(6)) and allowable costs determination (2 CFR 200.302(b)(7)) in accordance with Uniform Guidance requirements. Questioned Costs: $0 Cause: Ozarks Regional YMCA's written policies and procedures were not updated to include required Uniform Guidance policies. Indentification of a Repeat Finding: This is a repeat finding from the immediate previous audit, 2021-001. Effect: Employees of Ozarks Regional YMCA could enter into a transactions that is not in compliance with Uniform Guidance requirements. Recommendation: We recommend Ozarks Regional YMCA draft and adopt written procedures in accordance with Uniform Guidance requirements. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and is in process of developing and implementing the appropriate policies and procedures. The board of directors will vote to approve the policies during the second quarter of 2024.
Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance Federal Agency: U.S. Department of Defense Federal Program Name: Natural Resource Survey and Habitat Enhancement Assistance Listing Number: 12.005 Federal Award Identification Number and Year: H79TI083313 - 2020 Pass-Through Agency: U.S. Army Corps of Engineers, Seattle District Pass-Through Number(s): W912DW-20-2-0003 Award Period: September 28, 2020, through September 27, 2025 Criteria or specific requirement: 2 CFR 200.302(a) on Financial management states that "... 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". The current form of documentation did not clearly agree between the invoiced amount and what was presented in the general ledger for the period requested for reimbursement. In addition, 2 CFR 200.305(b) states that "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means". Condition: During our testing, it was noted that each of the 4 samples selected did not include sufficient documentation to agree all amounts requested for reimbursement for the month in question to the expenditures listed in the general detail by program. Questioned costs: Unknown. Context: A sample of 4 monthly reimbursement requests were taken from a population of 12. Of the 4 sampled, each were insufficiently supported to agree the amounts requested for reimbursement for the month in question to the expenditures listed in the general detail by program. Cause: The Organization is using a cumulative profit and loss to file monthly reimbursement requests (beginning of the year through the reimbursement month). In addition, reimbursement requests are not always prepared and filed each month. In these instances, The Organization will often catch up on expenditures that had been made in previous months and request them in the current period. Effect: The Organization is currently in noncompliance with federal regulations with regard to adequate documentation and the reduction of time between expenditures being made and requesting for federal reimbursement. Without adequate documentation in place to ensure costs are evidenced and reconcile to the expenditures documented in the underlying accounting information that is used to prepare the SEFA, the Organization could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement that the Organization is entitled to under the terms of the grant. Delayed reimbursement requests puts the Organization at continued noncompliance with federal regulations and can result in delayed payment, putting further financial strain on the Organization. Repeat Finding: No. Recommendation: CLA recommends that the Organization move away from using a cumulative profit and loss report and instead run monthly general ledger details by program as support for their monthly reimbursement requests. This will enhance clarity of costs attributable to each monthly period and reduces the chance that costs will be missed when requesting for reimbursement. Any reconciling transactions can be clearly tracked in an Excel file of the general ledger detail by program. In addition, CLA recommends that the Organization emphasize to program management staff the importance of filing reimbursement requests each month and in a timely manner to reduce administrative and financial burden. Views of responsible officials: There is no disagreement with the audit finding.
Condition: During our review of the December 31, 2022 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over revenue recognition and preparation of the SEFA were not properly designed resulting in material adjustments to several grants and to the SEFA identified during the audit. Criteria: The Code of Federal Regulations (CFR) Section 200.510(b) states in part, “The auditee must also prepare a schedule of federal expenditures for the period covered by the auditee’s consolidated financial statements which must include the total Federal awards expended as determined in accordance with 200.502.” Also, in accordance with CFR Section 200.302(b) – Financial Management, the auditees financial management system must provide 1) identification of all federal awards received and expended; 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; 4) effective control over, and accountability for, all funds, property, and other assets; 5) comparison of expenditures with budget amounts for each Federal award; 6) written procedures to implement the requirements of section 200.305 and; 7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the Federal award. Further, revenue from grants is to be accounted for in accordance with ASU 2018-08 (Topic 958) Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made. As most of the Federal grants received are conditional upon expenditure and expenditure in accordance with cost principles, revenue should not be recognized until the relating conditions have been met and therefore right of return is overcome. Cause: Internal controls over revenue recognition and preparation of the SEFA are not designed effectively to ensure completeness and accuracy of revenues reported and the SEFA. Effect: As a result of the condition noted above, material audit adjustments were required to be posted to several grants and to the SEFA to properly report federal expenditures in the correct period, as well as revenues reported on the consolidated statement of activities. Recommendation: We recommend that management review current internal controls over revenue recognition and preparation and tracking of federal expenditures to ensure that revenue is properly reported and, all federal awards are captured and reported in the correct period and that internal controls are properly designed to detect and correct errors to the SEFA.
#2022-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2 CFR 200.303) Travel (2 CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with UG. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that the Organization’s expenses are not in accordance with UG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with UG. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2021-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with UG.
#2022-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2 CFR 200.303) Travel (2 CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with UG. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that the Organization’s expenses are not in accordance with UG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with UG. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2021-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with UG.
Finding 2022-001 - U.S. Department of Housing and Urban Development, Mortgage Insurance Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate, CFDA #14.135 Statement of Condition: Internal control processes over financial accounting did not ensure that all transactions were properly recorded. Internal control processes over financial accounting did not ensure that key accounts were reconciled or reviewed on a periodic basis. Criteria: The HUD Handbook 4370.2 REV-1, Chapter 2 requires the books and accounts to be complete and accurate. HUD Handbook 4370.2 REV-1, Chapter 2, Section 12 requires monthly reconciliations of all cash accounts. Additionally, 2 CFR Part 200 Section 200.302 Financial Management states that the financial management system of each non-federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award in accordance with the reporting requirements. Additionally, 2 CFR Part 200 Section 200.303(a), Internal Controls, requires that non-federal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the non-federal entity is managing the award in compliance with federal statutes, regulations and the terms and conditions. Effect: Noncompliance with HUD and Uniform Guidance requirements and the possibility of undetected material misstatements and/or undetected misappropriation of assets. Cause: Management oversight. Context: An understanding of processes and internal controls was performed with the Corporation's management and tests were performed to determine if the processes and internal controls were implemented and effective. As part of this process we noted the following processes and internal controls were not effective and/or implemented. 1) Only two of the six bank accounts were reconciled. The outsourced bookkeeper only performed a bank reconciliation for the operating and security deposit cash accounts. 2) The accounts receivable, tenants and accounts receivable, HUD were not reconciled. 3) The monthly review process of the Corporation's financial information is not fully supported by evidence of such review. Questioned Costs: N/A Recommendation: We recommend management review/enhance its accounting and internal control procedures to ensure that all key accounts are reconciled and reviewed with supporting evidence of such review. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding and will review the accounting and financial procedures, system of internal controls and policies.
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 Corporation 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 52.216-7(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 reimbursement requests, we noted that 12 out of 34 sampled requests did not have adequate supporting documentation as to evidence of timely review and approval. Cause: The Corporation did not maintain detailed listings of eligible costs incurred at the time of reimbursement request to support the amount of reimbursement requested in the Payment Management System. Additionally, the Corporation did not maintain documentation of such review or approval that such costs were incurred prior to request for reimbursement, or the amount requested was in accordance with 2 CFR Section 200.305. Eligible cost listings to support amounts drawn during the grant period in total were reconstructed to support annual activity. Effect or Potential Effect: Requests for reimbursement per the Payment Management System may not have minimized the time elapsing between payment by the Federal agency or pass through and disbursement by the Corporation and the amounts requested for reimbursement may be inaccurate. Questioned costs: Unknown Context: We selected 34 reimbursement requests submitted through the Payment Management System and DC Portal during the year ended December 31, 2022. The Corporation was unable to provide evidence of timely review and approval of 12 requests out of 34. Additionally, cost listings were not maintained and were recreated to validate amount of the draw downs during the fiscal year. This is a condition identified per review of the Corporation’s compliance with specified requirements using a statistically valid sample. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2021-009 in the 2021 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who is knowledgeable of such requirements. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation neither retained support eligible cost listings at the time of reimbursement request nor documented review or approval of such reimbursement request.
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 Corporation 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 52.216-7(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 reimbursement requests, we noted that 12 out of 34 sampled requests did not have adequate supporting documentation as to evidence of timely review and approval. Cause: The Corporation did not maintain detailed listings of eligible costs incurred at the time of reimbursement request to support the amount of reimbursement requested in the Payment Management System. Additionally, the Corporation did not maintain documentation of such review or approval that such costs were incurred prior to request for reimbursement, or the amount requested was in accordance with 2 CFR Section 200.305. Eligible cost listings to support amounts drawn during the grant period in total were reconstructed to support annual activity. Effect or Potential Effect: Requests for reimbursement per the Payment Management System may not have minimized the time elapsing between payment by the Federal agency or pass through and disbursement by the Corporation and the amounts requested for reimbursement may be inaccurate. Questioned costs: Unknown Context: We selected 34 reimbursement requests submitted through the Payment Management System and DC Portal during the year ended December 31, 2022. The Corporation was unable to provide evidence of timely review and approval of 12 requests out of 34. Additionally, cost listings were not maintained and were recreated to validate amount of the draw downs during the fiscal year. This is a condition identified per review of the Corporation’s compliance with specified requirements using a statistically valid sample. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2021-009 in the 2021 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who is knowledgeable of such requirements. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation neither retained support eligible cost listings at the time of reimbursement request nor documented review or approval of such reimbursement request.
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 Corporation 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 52.216-7(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 reimbursement requests, we noted that 12 out of 34 sampled requests did not have adequate supporting documentation as to evidence of timely review and approval. Cause: The Corporation did not maintain detailed listings of eligible costs incurred at the time of reimbursement request to support the amount of reimbursement requested in the Payment Management System. Additionally, the Corporation did not maintain documentation of such review or approval that such costs were incurred prior to request for reimbursement, or the amount requested was in accordance with 2 CFR Section 200.305. Eligible cost listings to support amounts drawn during the grant period in total were reconstructed to support annual activity. Effect or Potential Effect: Requests for reimbursement per the Payment Management System may not have minimized the time elapsing between payment by the Federal agency or pass through and disbursement by the Corporation and the amounts requested for reimbursement may be inaccurate. Questioned costs: Unknown Context: We selected 34 reimbursement requests submitted through the Payment Management System and DC Portal during the year ended December 31, 2022. The Corporation was unable to provide evidence of timely review and approval of 12 requests out of 34. Additionally, cost listings were not maintained and were recreated to validate amount of the draw downs during the fiscal year. This is a condition identified per review of the Corporation’s compliance with specified requirements using a statistically valid sample. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2021-009 in the 2021 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who is knowledgeable of such requirements. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation neither retained support eligible cost listings at the time of reimbursement request nor documented review or approval of such reimbursement request.
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO