All federal programs. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.
Significant Deficiency 2 CFR ? 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ? 200.302 (b) (6) and (7) which requires the Authority to establish written procedures for determining the allowability of costs in accordance with Subpart E - Cost Principles and the terms and conditions of the Federal award and establish written procedures to implement the requirements of ? 305 Payment. Additionally, 2 C.F.R. ? 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 C.F.R. ? 200.318(a) which states the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. Although the Authority did have written standard operating procedures requiring purchase orders, they did not have an approved purchase order or contract on file for 2 of the 50 purchases tested. Failure to have proper controls in place to ensure policies and procedures are being followed could result in unallowable costs and procurement noncompliance. The Authority should follow their written standard operating procedures and implement controls to ensure allowability of costs and procurement in accordance with federal grants.
2022-001: Internal Controls over Reporting Federal Grantor: U.S. Department of Health and Human Services Pass-Through Grantor: Missouri Department of Social Services Federal Assistance Listing Number: 93.558 Program Title: Temporary Assistance for Needy Families Pass-through Entity Identifying Number: CS200821001 Award Year: 2021-2022; 2022-2023 Questioned Costs: $142,000 Criteria: The Uniform Guidance at 2 CFR 200.302(b) states that, ?The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program?(3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation.? MCAN?s contract with the Missouri Department of Social Services requires the organization to ?submit invoices for reimbursement of actual allowable expenses? on monthly expenditure reports that must be submitted by the 15th day of each month. Condition: The expenditures incurred by subrecipients billed to the Department of Social Services on the monthly TANF SkillUp expenditure reports for the months of June 2022 through September 2022 did not agree to the expenditures incurred per the general ledger for those months. The table below shows the comparison of the amounts billed and the actual expenditures incurred per the general ledger for each month: "See Schedule of Findings and Questioned Costs for chart/table" Cause: The organization had turnover in the Executive Director and accounting positions during the fiscal year. The first monthly billing performed by the new fiscal contractor was June 2022, and it was determined that they ran a cash basis report from the accounting system in order to determine the amount of expenditures to be billed for the month instead of an accrual basis report. This led to several subrecipient invoices totaling around $142,000 which had been claimed on the May 2022 expenditure report on the accrual basis being duplicated on the June 2022 report when they were paid. The organization did not maintain the reports from the accounting system which were used to determine the amounts to be billed with the copies of the expenditure reports, therefore, significant effort was required during the audit to determine how the amounts billed were determined. Effect: Internal controls over the reporting process were not adequate to ensure that monthly expenditure reports were complete and accurate and did not provide an adequate audit trail that supported the amounts reported on the monthly reports. This led to the organization billing the grantor for expenditures that had not been incurred. The grantor has agreed to allow the organization to apply $142,000 to expenditures incurred in fiscal year 2023. Recommendation: We recommend that the organization implement internal controls over the grant reporting process to ensure that all monthly reports are complete and accurate and that only expenditures that have been incurred are requested for reimbursement.
FINDING 2022-055 Temporary Assistance for Needy Families, ALN 93.558, Reporting - Accuracy of Financial Reports See Schedule of Findings and Questioned Costs for chart/table. Condition MDHHS did not submit accurate financial reports to HHS's Administration for Children and Families (ACF). Our review of the fiscal year 2022 fourth quarter TANF financial report (ACF-196R) noted MDHHS excluded $23.1 million in federal expenditures incurred by LEO. Also, MDHHS inappropriately included these expenditures in its fiscal year 2023 first quarter financial report instead of submitting a corrected fiscal year 2022 financial report for the quarter ended September 30, 2022. Criteria Federal regulation 2 CFR 200.302(b)(2) requires grantees to submit accurate financial data in accordance with a grant program's reporting requirements. The reporting instructions include details for reporting expenditures made in the federal fiscal year for the grant year being reported. The instructions also state revisions to expenditures reported in prior years should be made to the report of the fiscal year in which the expenditure occurred. Cause MDHHS informed us its internal control approval process was not timely and resulted in excluding LEO's fourth quarter interagency billing from the 2022 financial report. Effect MDHHS may have diminished the federal grantor agency's ability to ensure appropriate oversight and monitoring of TANF funds. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDHHS improve its internal control and submit revised financial reports to ACF. Management Views MDHHS agrees with the finding.
FINDING 2022-055 Temporary Assistance for Needy Families, ALN 93.558, Reporting - Accuracy of Financial Reports See Schedule of Findings and Questioned Costs for chart/table. Condition MDHHS did not submit accurate financial reports to HHS's Administration for Children and Families (ACF). Our review of the fiscal year 2022 fourth quarter TANF financial report (ACF-196R) noted MDHHS excluded $23.1 million in federal expenditures incurred by LEO. Also, MDHHS inappropriately included these expenditures in its fiscal year 2023 first quarter financial report instead of submitting a corrected fiscal year 2022 financial report for the quarter ended September 30, 2022. Criteria Federal regulation 2 CFR 200.302(b)(2) requires grantees to submit accurate financial data in accordance with a grant program's reporting requirements. The reporting instructions include details for reporting expenditures made in the federal fiscal year for the grant year being reported. The instructions also state revisions to expenditures reported in prior years should be made to the report of the fiscal year in which the expenditure occurred. Cause MDHHS informed us its internal control approval process was not timely and resulted in excluding LEO's fourth quarter interagency billing from the 2022 financial report. Effect MDHHS may have diminished the federal grantor agency's ability to ensure appropriate oversight and monitoring of TANF funds. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDHHS improve its internal control and submit revised financial reports to ACF. Management Views MDHHS agrees with the finding.
Item 2022-001 Written policies, procedures, and standards of conduct Water and Waste Disposal Systems for Rural Communities Assistance Listing Number 10.760 U.S. Department of Agriculture Grant period: Year ended September 30, 2022 Questioned Costs ? $0 Condition ? The Board does not have all of the written policies, procedures and standards of conduct required by UG. Criteria ? Grantees should have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. 2 CFR 200, Subparts D & E requires the non-Federal entity to establish and maintain written policies, procedures, and standards of conduct including internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award. Specific requirements relate to the following: ? ? 200.302 Financial management ? ? 200.305 Payment ? ? 200.319 Competition ? ? 200.320 Methods of procurement to be followed ? ? 200.430 Compensation?personal services ? ? 200.431 Compensation?fringe benefits Cause of Condition ? The Board has failed to prepare written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. Potential Effect of Condition ? Lack of written policies, procedures, and standards of conduct could result in noncompliance related to federal awards. Recommendation ? We recommend that the Board implement the required written policies and procedures. Audit finding 2022-001 relates to prior year 2021-001 finding. Updated reference number to current audit year 2022.
Federal Agency: U.S. Small Business Administration Federal Program: 59.075 Shuttered Venue Operators Program Grant Period: Year ended September 30, 2022 Criteria: 2 CFR 200.302(b)(7), 2 CFR 200.318(c)(1) Condition: Written policies and procedures for the determination of allowable of costs, conflicts of interest, and procedures for procurement transactions surrounding federal awards were not available. Cause: Unfamiliarity with requirements stated in 2 CFR 200 of the Uniform Guidance. Potential Effect: Instances of noncompliance with direct and material compliance requirements may occur. Repeat Finding: No Management?s Response and Planned Corrective Action: In the event of receipt of future Federal Awards, management and the board of directors will work towards developing a Federal Award Policy and Procedure Manual to be used for federal awards management. Responsible Person: Tim Stephens, Executive Director
Information on the Federal Program: Assistance Living Number 21.027 Criteria: Title 2 CFR 200 Section 200.302 establishes non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During the current year audit, we had difficulty obtaining the correct financial reports from the accounting software. Context: Fry was unable to extract the correct reports or prepare proper reports. These reports include the Schedule of Federal Expenditures (SEFA), program profit and loss statements, and the functional expense statement. Multiple version of all requested financial documents were provided. Cause: Fry's accounting is not set up properly to allow for easy and accurate record keeping. There is also no review and approval of transactions posted to the accounting software. Effect or Potential Effect: We were unable to trace revenue to the proper general ledger account. We could not trace salary allocations to the project. The major program profit and loss did not tie to the SEFA. Question Costs: None Identification of Repeat Finding: 2021-001 Recommendation: Fry should set up project/class codes for each program, fundraising, and general and administrative in the accounting software. We also recommend Fry hires someone with accounting experience in relation to government grants to assist in the setup and to help maintain records throughout the year. Accounts should be reconciled on a monthly basis and have a review and approval process for all accounts.
Information on the Federal Program: Assistance Living Number 21.027 Criteria: Title 2 CFR 200 Section 200.302 establishes non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During the current year audit, we had difficulty obtaining the correct financial reports from the accounting software. Context: Fry was unable to extract the correct reports or prepare proper reports. These reports include the Schedule of Federal Expenditures (SEFA), program profit and loss statements, and the functional expense statement. Multiple version of all requested financial documents were provided. Cause: Fry's accounting is not set up properly to allow for easy and accurate record keeping. There is also no review and approval of transactions posted to the accounting software. Effect or Potential Effect: We were unable to trace revenue to the proper general ledger account. We could not trace salary allocations to the project. The major program profit and loss did not tie to the SEFA. Question Costs: None Identification of Repeat Finding: 2021-001 Recommendation: Fry should set up project/class codes for each program, fundraising, and general and administrative in the accounting software. We also recommend Fry hires someone with accounting experience in relation to government grants to assist in the setup and to help maintain records throughout the year. Accounts should be reconciled on a monthly basis and have a review and approval process for all accounts.
Finding Number: 2022-006 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of the Treasury COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Year: 10/01/2021 ? 09/20/2022 Government Department/Agency: Office of the Chief Financial Officer (OCFO) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state?s own funds. In addition, the state?s and the other non-federal entity?s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Condition ? Certain grant expenditures related to the PAY-AS-You-Go (PAYGO Capital) program, amounting to approximately $36.4 million, had erroneously been reflected as expenditures under assistance listing number 21.027, COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. Subsequently, OCFO adjusted the SEFA to reflect the actual amount of expenditures incurred for the program. Questioned Costs ? None. Context ? This is a condition identified per review of the OCFO?s compliance with the specified requirements. Effect ? OCFO is not in compliance with the stated provisions. Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause ? OCFO did not appear to have adequate policies and procedures in place to ensure accuracy of the SEFA. Recommendation ? We recommend that OCFO adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? OCFO concurs with the finding. In the compilation and reconciliation of the SEFA, the PAYGO ARPA Local Revenue Replacement expenditures component was inadvertently included in the draft District fiscal year 2022 SEFA presented to the external auditors. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.
Finding 2022-001 ? Internal Controls over Grant Management (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Department of Transportation CFDA No. 20.615 E-911 Grant Program Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: Alabama Statewide 9-1-1 Board does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: Alabama Statewide 9-1-1 Board has processes and procedures in place to administer grant funds but no written policies. Effect: Alabama Statewide 9-1-1 Board is not in compliance with financial management system requirements. Recommendation: Alabama Statewide 9-1-1 Board should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliance. Views of Responsible Officials: See Corrective Action Plan included at the end of the report.
Item 2022-001 Uniform Guidance Written Policies, Procedures and Standards of Conduct (Repeat Item 2019-001) U.S. Department of Agriculture Water and Waste Disposal Systems for Rural Communities Assistance Listing #10.760 Year Ended September 30, 2022 Criteria ? Grantees should have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. 2 CFR 200, Subparts D & E requires the non-Federal entity to establish and maintain written policies, procedures, and standards of conduct including internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award. Specific requirements relate to the following: ? ? 200.302 Financial management ? ? 200.305 Payment Condition ? The City does not have written policies, procedures and standards of conduct. Cause ? The entity has failed to prepare written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. Questioned Costs ? Not determinable Effect ? Lack of written policies, procedures, and standards of conduct could result in noncompliance related to federal awards. Recommendation ? We recommend that the Commission prepare written policies, procedures, and standards of conduct to include all the required elements as provided in 2 CFR 200, Subparts D & E of the Uniform Guidance. Management?s Response ? The City will consider all recommendations.
Information on the Federal Program: Assistance Listing Number 21.027-Coronavirus State and Local Fiscal Recovery Funds, U.S. Department of the Treasury. Compliance Requirements: Allowable Costs and Costs Principles. Type of Finding: Noncompliance. Criteria: 2 CFR § 200.302(b)(7) requires that each non-Federal entity must provide for written procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles and the terms and conditions of the Federal award. Condition: We noted that the County did not have written procedures for determining the allowability of costs and the terms and conditions of the Federal award during fiscal year 2022. Cause: The County was not aware of the requirement to have written procedures for determining the allowability of costs and the terms and conditions of the Federal award. Effect: Failure to have written procedures for determining allowability of costs and the terms and conditions of the Federal award could result in costs charged to the program that are not allowable costs as defined by the appropriate cost principles circular and noncompliance with Uniform Guidance requirements and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the County identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The County has identified federal grants subject to the Uniform Guidance and will develop written procedures for determining the allowability of costs in accordance with 2 CFR 200, Subpart E—Cost Principles and the terms and conditions of the Federal award.
MANAGEMENT DID NOT HAVE WRITTEN INTERNAL CONTROL PROCEDURES FOR DETERMINING ALLOWABLE COSTS. 2 CFR 200, SUBPART D, SECTION 200.302(B)(7) REQUIRES "WRITTEN PROCEDURES FOR DETERMINING THE ALLOWABILITY OF COSTS IN ACCORDANCE WITH SUBPART E - COST PRINCIPLES OF THIS PART AND THE TERMS AND CONDITIONS OF THE FEDERAL AWARD. NO QUESTIONED COSTS. LACK OF WRITTEN CONTROLS TO IDENTIFY ALLOWABLE COSTS AND SPECIAL TESTS AND PROVISIONS. THIS WAS NOT A REPEAT FINDING.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Cash Management • Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.302(b)(3) the nonfederal entity must keep "records that identify adequately the source and application of funds for federally-funded activities" and must maintain effective controls over these procedures. Condition: No accompanying invoices to support drawdown requests. Questioned costs: None Context: While there existed evidence of supporting invoices for Federal expenditures (with the exception of one item for $52 - see finding 2022-006), these were not compiled into an auditable list showing justification for the drawdown amounts. Auditors reviewed the profit and loss schedule for the year and were not able to identify a clear pattern between expenditures and drawdowns. Cause: Lack of procedures requiring supporting documentation. Effect: Reimbursement requests could be made for unallowed expenditures. Repeat Finding: No Recommendation: Implement process to ensure documentation is kept identifying which expenditures are included in reimbursement request. There should be a secondary individual (ED and contract accountant) involved in the process to ensure accuracy - documentation of the two-person preparation and review process should be documented. Implement procedures to document review of subrecipient payment requests and minimize time elapsed between requests and payments. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Cash Management • Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.302(b)(3) the nonfederal entity must keep "records that identify adequately the source and application of funds for federally-funded activities" and must maintain effective controls over these procedures. Condition: No accompanying invoices to support drawdown requests. Questioned costs: None Context: While there existed evidence of supporting invoices for Federal expenditures (with the exception of one item for $52 - see finding 2022-006), these were not compiled into an auditable list showing justification for the drawdown amounts. Auditors reviewed the profit and loss schedule for the year and were not able to identify a clear pattern between expenditures and drawdowns. Cause: Lack of procedures requiring supporting documentation. Effect: Reimbursement requests could be made for unallowed expenditures. Repeat Finding: No Recommendation: Implement process to ensure documentation is kept identifying which expenditures are included in reimbursement request. There should be a secondary individual (ED and contract accountant) involved in the process to ensure accuracy - documentation of the two-person preparation and review process should be documented. Implement procedures to document review of subrecipient payment requests and minimize time elapsed between requests and payments. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Cash Management • Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.302(b)(3) the nonfederal entity must keep "records that identify adequately the source and application of funds for federally-funded activities" and must maintain effective controls over these procedures. Condition: No accompanying invoices to support drawdown requests. Questioned costs: None Context: While there existed evidence of supporting invoices for Federal expenditures (with the exception of one item for $52 - see finding 2022-006), these were not compiled into an auditable list showing justification for the drawdown amounts. Auditors reviewed the profit and loss schedule for the year and were not able to identify a clear pattern between expenditures and drawdowns. Cause: Lack of procedures requiring supporting documentation. Effect: Reimbursement requests could be made for unallowed expenditures. Repeat Finding: No Recommendation: Implement process to ensure documentation is kept identifying which expenditures are included in reimbursement request. There should be a secondary individual (ED and contract accountant) involved in the process to ensure accuracy - documentation of the two-person preparation and review process should be documented. Implement procedures to document review of subrecipient payment requests and minimize time elapsed between requests and payments. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Cash Management • Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.302(b)(3) the nonfederal entity must keep "records that identify adequately the source and application of funds for federally-funded activities" and must maintain effective controls over these procedures. Condition: No accompanying invoices to support drawdown requests. Questioned costs: None Context: While there existed evidence of supporting invoices for Federal expenditures (with the exception of one item for $52 - see finding 2022-006), these were not compiled into an auditable list showing justification for the drawdown amounts. Auditors reviewed the profit and loss schedule for the year and were not able to identify a clear pattern between expenditures and drawdowns. Cause: Lack of procedures requiring supporting documentation. Effect: Reimbursement requests could be made for unallowed expenditures. Repeat Finding: No Recommendation: Implement process to ensure documentation is kept identifying which expenditures are included in reimbursement request. There should be a secondary individual (ED and contract accountant) involved in the process to ensure accuracy - documentation of the two-person preparation and review process should be documented. Implement procedures to document review of subrecipient payment requests and minimize time elapsed between requests and payments. Views of responsible officials: There is no disagreement with the audit finding.
Sufficient controls were not in place for the current fiscal year to ensure that requests for reimbursement were adequately supported by available documentation. The Uniform Guidance sets forth requirements for internal controls over federal programs in 2 CFR sections 200.303 and 200.302 that a grantee must establish and maintain records adequately reflecting the source and application of funds with information including authorizations, unobligated balances, expenditures, and income and that these be supported by source documentation that must be retained for three years from the final expenditure report. Requests for reimbursement and their supporting information could not be located for three of six reimbursement requests. We recommend that a standardized file and documentation system be implemented for all grant reimbursement requests containing the reimbursement request with evidence of review and authorization and including the supporting expenditure reports. The Academy responds that it has contracted with an accounting and administrative contractor who has implemented a recordkeeping system for grant reimbursement requests and related supporting documentation
Sufficient controls were not in place for the current fiscal year to ensure that requests for reimbursement were adequately supported by available documentation. The Uniform Guidance sets forth requirements for internal controls over federal programs in 2 CFR sections 200.303 and 200.302 that a grantee must establish and maintain records adequately reflecting the source and application of funds with information including authorizations, unobligated balances, expenditures, and income and that these be supported by source documentation that must be retained for three years from the final expenditure report. Requests for reimbursement and their supporting information could not be located for three of six reimbursement requests. We recommend that a standardized file and documentation system be implemented for all grant reimbursement requests containing the reimbursement request with evidence of review and authorization and including the supporting expenditure reports. The Academy responds that it has contracted with an accounting and administrative contractor who has implemented a recordkeeping system for grant reimbursement requests and related supporting documentation
Finding 2022-001 – Internal Controls over Grant Management (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Economic Development Administration Economic Development Cluster and U.S. Department of Health and Human Services FAL No 93.568 Low- Income Home Energy Assistance. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: Central Alabama Regional Planning and Development Commission does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: Central Alabama Regional Planning and Development Commission has processes and procedures in place to administer grant funds but no written policies. Effect: Central Alabama Regional Planning and Development Commission is not in compliance with financial management system requirements. Recommendation: Central Alabama Regional Planning and Development Commission should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliance. Views of Responsible Officials: See Corrective Action Plan included at the end of the report.
Finding 2022-001 – Internal Controls over Grant Management (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Economic Development Administration Economic Development Cluster and U.S. Department of Health and Human Services FAL No 93.568 Low- Income Home Energy Assistance. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: Central Alabama Regional Planning and Development Commission does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: Central Alabama Regional Planning and Development Commission has processes and procedures in place to administer grant funds but no written policies. Effect: Central Alabama Regional Planning and Development Commission is not in compliance with financial management system requirements. Recommendation: Central Alabama Regional Planning and Development Commission should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliance. Views of Responsible Officials: See Corrective Action Plan included at the end of the report.
Finding 2022-001 – Internal Controls over Grant Management (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Economic Development Administration Economic Development Cluster and U.S. Department of Health and Human Services FAL No 93.568 Low- Income Home Energy Assistance. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Condition: Central Alabama Regional Planning and Development Commission does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: Central Alabama Regional Planning and Development Commission has processes and procedures in place to administer grant funds but no written policies. Effect: Central Alabama Regional Planning and Development Commission is not in compliance with financial management system requirements. Recommendation: Central Alabama Regional Planning and Development Commission should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliance. Views of Responsible Officials: See Corrective Action Plan included at the end of the report.
FINDING 2022-003 – Cash Draw Downs and Internal Control over Cash Management MATERIAL WEAKNESS, MATERIAL NONCOMPLIANCE Identification of the Federal Program: U.S. Department of Health and Human Services 93.224/93.527 Health Center Program Cluster Criteria: In accordance with 2 CFR Section 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the federal agency or pass-through entity and disbursement by the Center for program costs and proportionate share of allowable indirect costs. Additionally, 2 CFR Section 200.302(b)(c) requires non-federal entities to establish written procedures to implement the requirements 2 CFR Section 200.305. The Federal Acquisition Regulation clause at 48 CFR Section 52.2160-7(b)(1) requires that the non-federal entity request reimbursement for only allocable, allowable, and reasonable contract costs that have already been paid or incurred. Condition: During our testing of draw requests, we noted certain draw requests were made prior to the related costs being incurred. Although the funds were ultimately expended on items approved by the federal award, they were not expended in a timely manner. Cause: The Center did not maintain detailed listings of eligible costs incurred at the time of the draw request to support the amount requested in the Payment Management System. Additionally, the Center did not maintain documentation of such review or approval that such costs were incurred prior to the draw request, or the amount requested was in accordance with 2 CFR Section 200.305. Effect or Potential Effect: Requests for draws per the Payment Management System may not have minimized the time elapsing between payment by the federal agency or pass-through entity and disbursement by the Center and the amounts drawn down may be inaccurate. Questioned Costs: None Context: We selected a sample of draw requests submitted through the Payment Management System during the year ended September 30, 2022. The Center was unable to provide evidence of timely review and approval of two requests out of 44, totaling $352,340. Repeat Finding: No Recommendation: We recommend the Center establish formal internal controls and documentation of its performance relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who are knowledgeable of such requirements. View of Responsible Officials: See accompanying Corrective Action Plan.
FINDING 2022-003 – Cash Draw Downs and Internal Control over Cash Management MATERIAL WEAKNESS, MATERIAL NONCOMPLIANCE Identification of the Federal Program: U.S. Department of Health and Human Services 93.224/93.527 Health Center Program Cluster Criteria: In accordance with 2 CFR Section 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the federal agency or pass-through entity and disbursement by the Center for program costs and proportionate share of allowable indirect costs. Additionally, 2 CFR Section 200.302(b)(c) requires non-federal entities to establish written procedures to implement the requirements 2 CFR Section 200.305. The Federal Acquisition Regulation clause at 48 CFR Section 52.2160-7(b)(1) requires that the non-federal entity request reimbursement for only allocable, allowable, and reasonable contract costs that have already been paid or incurred. Condition: During our testing of draw requests, we noted certain draw requests were made prior to the related costs being incurred. Although the funds were ultimately expended on items approved by the federal award, they were not expended in a timely manner. Cause: The Center did not maintain detailed listings of eligible costs incurred at the time of the draw request to support the amount requested in the Payment Management System. Additionally, the Center did not maintain documentation of such review or approval that such costs were incurred prior to the draw request, or the amount requested was in accordance with 2 CFR Section 200.305. Effect or Potential Effect: Requests for draws per the Payment Management System may not have minimized the time elapsing between payment by the federal agency or pass-through entity and disbursement by the Center and the amounts drawn down may be inaccurate. Questioned Costs: None Context: We selected a sample of draw requests submitted through the Payment Management System during the year ended September 30, 2022. The Center was unable to provide evidence of timely review and approval of two requests out of 44, totaling $352,340. Repeat Finding: No Recommendation: We recommend the Center establish formal internal controls and documentation of its performance relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who are knowledgeable of such requirements. View of Responsible Officials: See accompanying Corrective Action Plan.
FINDING 2022-003 – Cash Draw Downs and Internal Control over Cash Management MATERIAL WEAKNESS, MATERIAL NONCOMPLIANCE Identification of the Federal Program: U.S. Department of Health and Human Services 93.224/93.527 Health Center Program Cluster Criteria: In accordance with 2 CFR Section 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the federal agency or pass-through entity and disbursement by the Center for program costs and proportionate share of allowable indirect costs. Additionally, 2 CFR Section 200.302(b)(c) requires non-federal entities to establish written procedures to implement the requirements 2 CFR Section 200.305. The Federal Acquisition Regulation clause at 48 CFR Section 52.2160-7(b)(1) requires that the non-federal entity request reimbursement for only allocable, allowable, and reasonable contract costs that have already been paid or incurred. Condition: During our testing of draw requests, we noted certain draw requests were made prior to the related costs being incurred. Although the funds were ultimately expended on items approved by the federal award, they were not expended in a timely manner. Cause: The Center did not maintain detailed listings of eligible costs incurred at the time of the draw request to support the amount requested in the Payment Management System. Additionally, the Center did not maintain documentation of such review or approval that such costs were incurred prior to the draw request, or the amount requested was in accordance with 2 CFR Section 200.305. Effect or Potential Effect: Requests for draws per the Payment Management System may not have minimized the time elapsing between payment by the federal agency or pass-through entity and disbursement by the Center and the amounts drawn down may be inaccurate. Questioned Costs: None Context: We selected a sample of draw requests submitted through the Payment Management System during the year ended September 30, 2022. The Center was unable to provide evidence of timely review and approval of two requests out of 44, totaling $352,340. Repeat Finding: No Recommendation: We recommend the Center establish formal internal controls and documentation of its performance relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who are knowledgeable of such requirements. View of Responsible Officials: See accompanying Corrective Action Plan.
FINDING 2022-003 – Cash Draw Downs and Internal Control over Cash Management MATERIAL WEAKNESS, MATERIAL NONCOMPLIANCE Identification of the Federal Program: U.S. Department of Health and Human Services 93.224/93.527 Health Center Program Cluster Criteria: In accordance with 2 CFR Section 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the federal agency or pass-through entity and disbursement by the Center for program costs and proportionate share of allowable indirect costs. Additionally, 2 CFR Section 200.302(b)(c) requires non-federal entities to establish written procedures to implement the requirements 2 CFR Section 200.305. The Federal Acquisition Regulation clause at 48 CFR Section 52.2160-7(b)(1) requires that the non-federal entity request reimbursement for only allocable, allowable, and reasonable contract costs that have already been paid or incurred. Condition: During our testing of draw requests, we noted certain draw requests were made prior to the related costs being incurred. Although the funds were ultimately expended on items approved by the federal award, they were not expended in a timely manner. Cause: The Center did not maintain detailed listings of eligible costs incurred at the time of the draw request to support the amount requested in the Payment Management System. Additionally, the Center did not maintain documentation of such review or approval that such costs were incurred prior to the draw request, or the amount requested was in accordance with 2 CFR Section 200.305. Effect or Potential Effect: Requests for draws per the Payment Management System may not have minimized the time elapsing between payment by the federal agency or pass-through entity and disbursement by the Center and the amounts drawn down may be inaccurate. Questioned Costs: None Context: We selected a sample of draw requests submitted through the Payment Management System during the year ended September 30, 2022. The Center was unable to provide evidence of timely review and approval of two requests out of 44, totaling $352,340. Repeat Finding: No Recommendation: We recommend the Center establish formal internal controls and documentation of its performance relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who are knowledgeable of such requirements. View of Responsible Officials: See accompanying Corrective Action Plan.
FINDING 2022-003 – Cash Draw Downs and Internal Control over Cash Management MATERIAL WEAKNESS, MATERIAL NONCOMPLIANCE Identification of the Federal Program: U.S. Department of Health and Human Services 93.224/93.527 Health Center Program Cluster Criteria: In accordance with 2 CFR Section 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the federal agency or pass-through entity and disbursement by the Center for program costs and proportionate share of allowable indirect costs. Additionally, 2 CFR Section 200.302(b)(c) requires non-federal entities to establish written procedures to implement the requirements 2 CFR Section 200.305. The Federal Acquisition Regulation clause at 48 CFR Section 52.2160-7(b)(1) requires that the non-federal entity request reimbursement for only allocable, allowable, and reasonable contract costs that have already been paid or incurred. Condition: During our testing of draw requests, we noted certain draw requests were made prior to the related costs being incurred. Although the funds were ultimately expended on items approved by the federal award, they were not expended in a timely manner. Cause: The Center did not maintain detailed listings of eligible costs incurred at the time of the draw request to support the amount requested in the Payment Management System. Additionally, the Center did not maintain documentation of such review or approval that such costs were incurred prior to the draw request, or the amount requested was in accordance with 2 CFR Section 200.305. Effect or Potential Effect: Requests for draws per the Payment Management System may not have minimized the time elapsing between payment by the federal agency or pass-through entity and disbursement by the Center and the amounts drawn down may be inaccurate. Questioned Costs: None Context: We selected a sample of draw requests submitted through the Payment Management System during the year ended September 30, 2022. The Center was unable to provide evidence of timely review and approval of two requests out of 44, totaling $352,340. Repeat Finding: No Recommendation: We recommend the Center establish formal internal controls and documentation of its performance relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who are knowledgeable of such requirements. View of Responsible Officials: See accompanying Corrective Action Plan.
2022-003—Excess Drawdown of Federal Funds Type of Finding: (F) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health and Human Services AL #: 93.137 – Community Programs to Improve Minority Health Grant Program Award #: 5 AIAMP170017-05-00 Award Period: 07/01/2021 – 07/29/2022 Estimated Questioned Costs: $26,426 Compliance Requirement: Cash Management Statement of Condition During our analysis of total grant revenues and expenditures reported on the SEFA, we noted that the entity had drawn down $26,426 more in federal funds than it expended under the Community Programs to Improve Minority Health grant. The excess drawdown remained outstanding as of September 30, 2022, the end of the audit period, and as of the date of this report. Criteria In accordance with 2 CFR § 200.305(b), non-federal entities must minimize the time elapsing between the drawdown of federal funds and the disbursement for program purposes. Additionally, per 2 CFR § 200.302(b)(6), entities must maintain effective internal controls over cash management to ensure that drawdowns are based on actual, allowable expenditures. Effect The entity is not in compliance with federal cash management requirements. The federal award has an outstanding overdrawn balance of $26,426, which may be subject to repayment to the federal awarding agency. Cause The excess drawdown appears to have resulted from an error during the drawdown request process. The entity indicated it was likely due to administrative oversight but was unable to provide specific details due to the passage of time. The discrepancy was disclosed to the auditor during the audit. Recommendation We recommend that the entity remit the excess federal funds or consult with the awarding agency to determine the appropriate resolution. In addition, the entity should strengthen its procedures to reconcile cash drawdowns to actual expenditures on a timely basis to prevent similar overdraws in the future.
Finding 2022 – 003: Activities Allowed and Unallowed, Allowable Costs, Period of Performance (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Condition: The Organization’s general ledger did not allow for sufficient identification of transactions related to the major program, Title V. Title V expenditures were recorded through journal entries without supporting transaction-level detail. Because of this, the population of expenditures could not be tied to individual transactions, and pulling samples from this population would not provide a reasonable basis for drawing conclusions about the population tested. As a result, we were unable to select transactions for testing or perform the necessary audit procedures to assess compliance with federal requirements. Questioned Costs: Unable to determine due to scope limitation. Cause: Staff turnover and the Organization’s recordkeeping practices did not ensure sufficient documentation was maintained to support federal compliance. Effect: Due to the lack of adequate documentation, we were unable to obtain sufficient, appropriate audit evidence to form an opinion on the Organization’s compliance with these requirements. Consequently, a disclaimed opinion on compliance was issued for this major program. Additionally, these expenditures may be subject to repayment or further review by the granting agency. Recommendation: We recommend that management strengthen documentation and recordkeeping procedures to ensure compliance with federal record retention requirements. The Organization should implement a standardized process for tracking federal grant expenditures, ensuring proper coding within the accounting system, conduct periodic internal reviews to verify completeness and accuracy of financial records, and provide training to finance staff on Uniform Guidance requirements for grant record retention and reporting. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2022 – 003: Activities Allowed and Unallowed, Allowable Costs, Period of Performance (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Condition: The Organization’s general ledger did not allow for sufficient identification of transactions related to the major program, Title V. Title V expenditures were recorded through journal entries without supporting transaction-level detail. Because of this, the population of expenditures could not be tied to individual transactions, and pulling samples from this population would not provide a reasonable basis for drawing conclusions about the population tested. As a result, we were unable to select transactions for testing or perform the necessary audit procedures to assess compliance with federal requirements. Questioned Costs: Unable to determine due to scope limitation. Cause: Staff turnover and the Organization’s recordkeeping practices did not ensure sufficient documentation was maintained to support federal compliance. Effect: Due to the lack of adequate documentation, we were unable to obtain sufficient, appropriate audit evidence to form an opinion on the Organization’s compliance with these requirements. Consequently, a disclaimed opinion on compliance was issued for this major program. Additionally, these expenditures may be subject to repayment or further review by the granting agency. Recommendation: We recommend that management strengthen documentation and recordkeeping procedures to ensure compliance with federal record retention requirements. The Organization should implement a standardized process for tracking federal grant expenditures, ensuring proper coding within the accounting system, conduct periodic internal reviews to verify completeness and accuracy of financial records, and provide training to finance staff on Uniform Guidance requirements for grant record retention and reporting. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2022 – 004: Procurement and Suspension and Debarment (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Additionally, per 2 CFR § 200.213, entities must verify that vendors and contractors receiving federal funds are not suspended or debarred by checking the System for Award Management (SAM) or obtaining vendor certifications. Condition: The Organization was unable to provide sufficient documentation to support compliance with federal procurement and suspension and debarment requirements for purchases made under the Title V program. The general ledger did not allow for sufficient identification of transactions related to the Title V program as all expenditures were recorded through journal entries without supporting transaction-level detail. Due to this limitation, we were unable to select procurement transactions for testing or verify whether vendors had been screened for suspension and debarment before contracts were awarded. Questioned Costs: Unable to determine due to scope limitation. Cause: The Organization did not maintain adequate financial records or procurement documentation to demonstrate compliance with Uniform Guidance requirements. The lack of a complete and detailed general ledger further limited the ability to track and substantiate transactions. Finding 2022 – 004: Procurement and Suspension and Debarment (Compliance; Internal Controls Over Compliance), continued Effect: Without sufficient documentation, the Organization was unable to demonstrate compliance with federal procurement regulations, increasing the risk of noncompliance and potential disallowed costs. Additionally, these expenditures may be subject to repayment or further review by the granting agency. Recommendation: We recommend the Organization strengthen its financial recordkeeping and procurement processes by implementing procedures to ensure a complete and accurate general ledger is maintained. This should include appropriate coding to identify federal program expenditures. The Organization should also establish and enforce procurement policies that align with Uniform Guidance, including documentation of procurement methods, price or cost analyses, and vendor selection, implementing a process to verify and document vendor suspension and debarment status before awarding federally funded contracts, and conducting periodic internal reviews to ensure compliance with procurement and recordkeeping requirements. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2022 – 004: Procurement and Suspension and Debarment (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Additionally, per 2 CFR § 200.213, entities must verify that vendors and contractors receiving federal funds are not suspended or debarred by checking the System for Award Management (SAM) or obtaining vendor certifications. Condition: The Organization was unable to provide sufficient documentation to support compliance with federal procurement and suspension and debarment requirements for purchases made under the Title V program. The general ledger did not allow for sufficient identification of transactions related to the Title V program as all expenditures were recorded through journal entries without supporting transaction-level detail. Due to this limitation, we were unable to select procurement transactions for testing or verify whether vendors had been screened for suspension and debarment before contracts were awarded. Questioned Costs: Unable to determine due to scope limitation. Cause: The Organization did not maintain adequate financial records or procurement documentation to demonstrate compliance with Uniform Guidance requirements. The lack of a complete and detailed general ledger further limited the ability to track and substantiate transactions. Finding 2022 – 004: Procurement and Suspension and Debarment (Compliance; Internal Controls Over Compliance), continued Effect: Without sufficient documentation, the Organization was unable to demonstrate compliance with federal procurement regulations, increasing the risk of noncompliance and potential disallowed costs. Additionally, these expenditures may be subject to repayment or further review by the granting agency. Recommendation: We recommend the Organization strengthen its financial recordkeeping and procurement processes by implementing procedures to ensure a complete and accurate general ledger is maintained. This should include appropriate coding to identify federal program expenditures. The Organization should also establish and enforce procurement policies that align with Uniform Guidance, including documentation of procurement methods, price or cost analyses, and vendor selection, implementing a process to verify and document vendor suspension and debarment status before awarding federally funded contracts, and conducting periodic internal reviews to ensure compliance with procurement and recordkeeping requirements. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2022 – 005: Reporting (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Condition: The Organization was unable to provide any of the required reports for the Title V program, including the financial report, activity narrative, third-party income report, GPRA/GPRAMA, urban data standards, and property inventory. Without these reports, we were unable to perform the necessary audit procedures to assess compliance with federal requirements. Questioned Costs: None. Cause: The Organization lacked sufficient record retention policies and failed to maintain the required documentation needed for reporting compliance. Effect: The Organization was unable to produce key reports necessary for compliance with grant and audit requirements. Recommendation: We recommend that the Organization implement stronger documentation and recordkeeping procedures to ensure compliance with federal reporting requirements. This should include: • ensuring that all required reports (e.g., financial reports, activity narratives, third-party income reports) are generated and retained according to Uniform Guidance, • establishing a process for regular internal reviews to verify the completeness and accuracy of required federal reports, and • providing staff with training on record retention and reporting obligations to ensure timely and accurate submissions. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2022 – 005: Reporting (Compliance; Internal Controls Over Compliance) Material Weakness – 93.U01 Title V Criteria: Per Uniform Guidance 2 CFR § 200.302 and 2 CFR § 200.333, entities must maintain records that adequately identify the source and application of federal funds and retain documentation to support compliance with program requirements. Condition: The Organization was unable to provide any of the required reports for the Title V program, including the financial report, activity narrative, third-party income report, GPRA/GPRAMA, urban data standards, and property inventory. Without these reports, we were unable to perform the necessary audit procedures to assess compliance with federal requirements. Questioned Costs: None. Cause: The Organization lacked sufficient record retention policies and failed to maintain the required documentation needed for reporting compliance. Effect: The Organization was unable to produce key reports necessary for compliance with grant and audit requirements. Recommendation: We recommend that the Organization implement stronger documentation and recordkeeping procedures to ensure compliance with federal reporting requirements. This should include: • ensuring that all required reports (e.g., financial reports, activity narratives, third-party income reports) are generated and retained according to Uniform Guidance, • establishing a process for regular internal reviews to verify the completeness and accuracy of required federal reports, and • providing staff with training on record retention and reporting obligations to ensure timely and accurate submissions. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
CASH MANAGEMENT, I NOTED THAT THE NATIVE VILLAGE OF TYONEK (NVT) HAD AN EXCESS OF ACCOUNTS PAYABLE, ACCRUED PAYROLL LIABILITIES AND UNEARNED GRANT REVENUES AS COMPARED TO CASH ON HAND. TOTAL CASH ON HAND AT YEAR END WAS $5,810,414 AND TOTAL UNEARNED GRANT REVENUE WAS $6,181,944. PER 2 CFR, SECTION 200.302, THE NATIVE VILLAGE MUST COMPLY WITH THE REQUIREMENT THAT ANY AND ALL GRANT ADVANCES BE RETAINED WITHIN THE ORGANIZATION UNTIL EXPENDED ON ALLOWABLE GRANT EXPENDITURES. QUESTIONED COSTS NOT DETERMINED. IN PRIOR YEARS, THERE WAS AN OVEREXPENDITURE OF GENERAL AND ADMINISTRATIVE EXPENSES IN EXCESS OF REVENUES FOR THE YEAR. MOST OF THIS WAS BILLINGS FROM THE VILLAGES CONSULTANTS (6 AND 7 YEARS AGO) WHOSE BILLINGS WERE FAR IN EXCESS OF THE AVAILABLE UNRESTRICTED FUNDS WHICH THE VILLAGE HAD TO PAY THEM AS WELL AS LOSSES IN THE KALOA FUND. GRANTING AGENCIES COULD REQUEST REIMBURSEMENT OF THESE UNALLOWABLE ADVANCES CAUSING FINANCIAL HARDSHIP FOR THE NVT. MANAGEMENT NEEDS TO ENSURE THAT ALL NONGRANT EXPENSES NEED TO BE KEPT TO A MINIMUM TO ENSURE THAT ADVANCED GRANT FUNDS ARE NOT SPENT ON UNALLOWABLE ITEMS. IT IS IMPORTANT THAT THE NVT TRACK THROUGHOUT THE YEAR THE NET PROFIT OR LOSS IN THE GENERAL FUND AND IMMEDIATELY TAKE CORRECTIVE STEPS IF THE GENERAL FUND IS SHOWING A LOSS. IT IS ALSO IMPORTANT THAT CONTINUING RELATIONSHIPS WITH VENDORS ARE EVALUATED THROUGHOUT THE YEAR TO ENSURE REASONABLENESS OF PAYMENTS. IT IS ALSO IMPORTANT THAT LOSSES IN THE KALOA BUILDING FUND ARE ELIMINATED. THIS FINDING WAS ALSO NOTED AS FINDING 2021-001. IT HAS ALSO BEEN NOTED SINCE 2014.
Criteria: Federal regulations, in addition to the program’s operating contract, require recipients of federal funds to maintain documentation sufficient to support the allowability, allocability, and reasonableness of costs charged to federal programs. Under 2 CFR §200.302(b)(3), entities must maintain records that adequately identify the source and application of grant funds, and 2 CFR §200.403 provides that a cost is allowable only when it is adequately documented. Additionally, 2 CFR §200.333 establishes federal record retention requirements, obligating entities to retain financial records and supporting documentation for a prescribed period and to ensure such records are available for audit. In addition to the Uniform Guidance, the entity’s operating contract requires that all documentation related to expenditures and activities under the contract be retained for three years from the date of final payment under the contract. Collectively, these regulations require entities to maintain and retain supporting documentation for all expenditures charged to the federal program. Condition: During testing of non‑payroll disbursements, the entity was unable to provide invoices or other supporting documentation for 18 transactions. As a result, the auditor could not determine the nature, purpose, or allowability of the expenditures, nor could allowability testing be performed for any of these transactions. The unsupported disbursements resulted in total of $39,940 in actual and projected questioned costs. The entity was also unable to provide copies of checks for 15 disbursements to verify required dual signatures, and seven non‑payroll disbursements lacked documented approval or signature on the invoice. Additionally, personnel files could not be provided for 20 selected employees, and support for the amount or approval of three pay rates (one bonus and two regular paychecks) was not available, with available supporting documents reflecting amounts higher than the amounts actually paid. Although documentation for certain payroll files and pay‑rate approvals was missing, the auditor was able to verify the allowability of the payroll costs through alternative audit procedures. Cause: The underlying cause appears to be inadequate internal controls over the retention and organization of documentation supporting disbursements and payroll charged to the federal program. The entity does not have effective procedures to ensure that supporting documents—including invoices, approvals, check copies, personnel files, and pay‑rate authorizations—are consistently maintained, reviewed, and retained. Responsibilities for maintaining required records and ensuring compliance with retention requirements do not appear to be clearly assigned or enforced. As a result, the entity’s document retention processes were insufficient to ensure that required supporting documentation was preserved and available for audit. Effect: Failure to maintain accurate and complete financial information for review resulted in the auditor being unable to verify whether a portion of non-payroll disbursements were allowable, allocable, properly authorized, or reasonable under the Uniform Guidance, resulting in $39,940 in questioned costs. Although no questioned costs resulted from payroll testing, the documentation weaknesses related to payroll records indicate deficiencies in internal control that increase the risk of unsupported or unallowable costs being charged to the program in the future. Recommendation: The entity should enhance its internal control procedures to ensure all disbursements and payroll transactions charged to the federal program are supported by complete and properly approved documentation consistent with 2 CFR Part 200 and the operating contract. This includes retaining invoices, approvals, check copies, personnel files, and pay-rate authorizations. Management should assign clear responsibility for recordkeeping, implement periodic reviews for completeness, and provide staff training on documentation and retention expectations. Management’s Response: Management agrees with the findings and will ensure that all original supporting documents are maintained at the organization’s office in a secure location for a minimum of three years after an independent audit, and that every transaction is properly authorized and documented before expending monetary resources.
2022-023 Reporting ? Monthly Compliance Reports Federal Agency: U.S. Department of the Treasury Federal Program Title: Emergency Rental Assistance Program ALN: 21.023 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 1505-0266 ? 2021, 1505-0270 ? 2021 January 6, 2022?December 29, 2022 and May 5, 2021? September 30, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: According to ?200.302 Financial management of 2 CFR Part 200, the nonFederal 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. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. Condition: The Texas Department of Housing and Community Affairs (TDHCA) is required to submit ERA 1 and ERA 2 Monthly Compliance Reports, which include the total number of participating households that receive ERA assistance of any kind, and the total amount of ERA funds expended by TDHCA to or for participating households on behalf of eligible households. During our testing of three ERA 1 and three ERA 2 Monthly Compliance Reports, we noted the following: ? TDHCA was unable to provide source data for the October 2021 ERA 1 Monthly Compliance Report. The reported total number of participating households that receive ERA assistance was 42,607 and total amount of ERA funds expended was $197,113,340. ? For the December 2021 ERA 1 Monthly Compliance Report, the number of unique households reported to the Treasury was 1,175. However, the number of unique households was 1,170 based on the supporting documentation provided. ? For the November 2021 ERA 2 Monthly Compliance Report, the number of unique households reported to the Treasury was 78,378. However, the number of unique households was 78,332 based on the supporting documentation provided. TDHCA is also required to submit quarterly reports with reporting periods of one calendar quarter and several cumulative fields covering all activity from the date of award through the quarter close. These reports provide financial and performance data regarding TDHCA?s administration of their ERA projects and capture program design in addition to program status data elements. Key line items include the cumulative amount obligated and the cumulative amount expended by TDHCA. During our testing of three quarterly ERA 1 reports and two quarterly ERA 2 reports, we noted that no support was provided to validate the cumulative obligations and expenditures to date. Questioned costs: None Context: See "Condition" Cause: While management maintained dashboards to support reported information, they did not maintain the underlying supporting documentation. Effect: Failure to accurately report information on federal reports inhibits Treasury?s ability to accurately calculate reallocations and capture other key information in order to assess the performance of the program. Repeat Finding: No Recommendation: We recommend management adopt policies and procedures to ensure supporting documentation for federal reports is maintained, including any reconciling calculations or adjustments to support information reported on the federal reports. Views of responsible officials: Management agrees with the finding and recommendation.
Condition: The Center?s written policies and procedures related to financial management do not meet the requirements of 2 CFR 200, Subpart D and Subpart E. Criteria: According to 2 CFR Section 200.302.b and 2 CFR Section 200.305 of the Uniform Guidance, the Center is required to have a written financial management policy. Cause: The Center was unaware of requirements regarding policies and procedures outlined in the Uniform Guidance. Effect: Written policies necessary for non-Federal entities receiving federal funds were not in place. Repeat Finding: No Questioned Costs: None reported Recommendation: We recommend that the Center update their written policies and procedures that meet the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor?s finding and will update the Center?s written policies and procedures for the Uniform Guidance requirements.
2022-002 ? Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Information on the Federal Program: U.S. Small Business Administration Assistance Listing Number: 59.008 Assistance Listing Name: Economic Injury Disaster Loan Criteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section ?200.502 Basis for determining Federal awards expended.? The schedule must provide total Federal awards expended for each individual Federal program. In accordance with ?200.302 Financial Management, a 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 financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (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 and ?200.329 Monitoring and Reporting Program Performance. (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. Condition ? During the year ended August 31, 2022, the Center received additional EIDL funds. Prior to the COVID-19 pandemic, the Center did not receive and spend federal dollars in excess of the limit that required a single audit to be performed. Due to the lack of expertise surrounding the preparation of the SEFA and the non-recurring nature of the COVID-19 pandemic relief funding provided by the federal government, the Center was uncertain of some of the specifics on the SEFA statement. Cause ? The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect ? Management was unaware that the EIDL was a federal award requiring a single audit prior to discussion with the auditors. Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our testing of the Center?s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Repeat Finding: This is not a repeat finding. Recommendation ? We recommend management attend Federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the Federal funds are reported accurately on the SEFA and that programs are reported under the correct assistance listing number. Views of Responsible Officials ? Beck Center for the Arts concurs with the finding and the recommendation. The Center will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. The Center?s corrective action plan is described in Managements Corrective Action Plan included at page 42 of this reporting package.
2022-023 Reporting ? Monthly Compliance Reports Federal Agency: U.S. Department of the Treasury Federal Program Title: Emergency Rental Assistance Program ALN: 21.023 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 1505-0266 ? 2021, 1505-0270 ? 2021 January 6, 2022?December 29, 2022 and May 5, 2021? September 30, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: According to ?200.302 Financial management of 2 CFR Part 200, the nonFederal 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. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. Condition: The Texas Department of Housing and Community Affairs (TDHCA) is required to submit ERA 1 and ERA 2 Monthly Compliance Reports, which include the total number of participating households that receive ERA assistance of any kind, and the total amount of ERA funds expended by TDHCA to or for participating households on behalf of eligible households. During our testing of three ERA 1 and three ERA 2 Monthly Compliance Reports, we noted the following: ? TDHCA was unable to provide source data for the October 2021 ERA 1 Monthly Compliance Report. The reported total number of participating households that receive ERA assistance was 42,607 and total amount of ERA funds expended was $197,113,340. ? For the December 2021 ERA 1 Monthly Compliance Report, the number of unique households reported to the Treasury was 1,175. However, the number of unique households was 1,170 based on the supporting documentation provided. ? For the November 2021 ERA 2 Monthly Compliance Report, the number of unique households reported to the Treasury was 78,378. However, the number of unique households was 78,332 based on the supporting documentation provided. TDHCA is also required to submit quarterly reports with reporting periods of one calendar quarter and several cumulative fields covering all activity from the date of award through the quarter close. These reports provide financial and performance data regarding TDHCA?s administration of their ERA projects and capture program design in addition to program status data elements. Key line items include the cumulative amount obligated and the cumulative amount expended by TDHCA. During our testing of three quarterly ERA 1 reports and two quarterly ERA 2 reports, we noted that no support was provided to validate the cumulative obligations and expenditures to date. Questioned costs: None Context: See "Condition" Cause: While management maintained dashboards to support reported information, they did not maintain the underlying supporting documentation. Effect: Failure to accurately report information on federal reports inhibits Treasury?s ability to accurately calculate reallocations and capture other key information in order to assess the performance of the program. Repeat Finding: No Recommendation: We recommend management adopt policies and procedures to ensure supporting documentation for federal reports is maintained, including any reconciling calculations or adjustments to support information reported on the federal reports. Views of responsible officials: Management agrees with the finding and recommendation.
Condition: The Center?s written policies and procedures related to financial management do not meet the requirements of 2 CFR 200, Subpart D and Subpart E. Criteria: According to 2 CFR Section 200.302.b and 2 CFR Section 200.305 of the Uniform Guidance, the Center is required to have a written financial management policy. Cause: The Center was unaware of requirements regarding policies and procedures outlined in the Uniform Guidance. Effect: Written policies necessary for non-Federal entities receiving federal funds were not in place. Repeat Finding: No Questioned Costs: None reported Recommendation: We recommend that the Center update their written policies and procedures that meet the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor?s finding and will update the Center?s written policies and procedures for the Uniform Guidance requirements.
2022-002 ? Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Information on the Federal Program: U.S. Small Business Administration Assistance Listing Number: 59.008 Assistance Listing Name: Economic Injury Disaster Loan Criteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section ?200.502 Basis for determining Federal awards expended.? The schedule must provide total Federal awards expended for each individual Federal program. In accordance with ?200.302 Financial Management, a 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 financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (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 and ?200.329 Monitoring and Reporting Program Performance. (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. Condition ? During the year ended August 31, 2022, the Center received additional EIDL funds. Prior to the COVID-19 pandemic, the Center did not receive and spend federal dollars in excess of the limit that required a single audit to be performed. Due to the lack of expertise surrounding the preparation of the SEFA and the non-recurring nature of the COVID-19 pandemic relief funding provided by the federal government, the Center was uncertain of some of the specifics on the SEFA statement. Cause ? The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect ? Management was unaware that the EIDL was a federal award requiring a single audit prior to discussion with the auditors. Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our testing of the Center?s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Repeat Finding: This is not a repeat finding. Recommendation ? We recommend management attend Federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the Federal funds are reported accurately on the SEFA and that programs are reported under the correct assistance listing number. Views of Responsible Officials ? Beck Center for the Arts concurs with the finding and the recommendation. The Center will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. The Center?s corrective action plan is described in Managements Corrective Action Plan included at page 42 of this reporting package.
Condition: The District’s accounts payable process does not have a procedure that clearly documents when and by whom the expenditure was authorized nor does the process include cut-off procedures to apply the expenditure to the proper period. Criteria: Controls should be in place to ensure that expenses are recorded in the period in which the expenses are incurred and to ensure that staff with the appropriate level of authority approves the transaction. 2 CFR 200.302. Cause of Condition: Procurement transactions are initiated by several individuals within the District at times without review and approval by a District or program supervisor. Procurement transactions are not entered into the account system with the date the liability was incurred. Effect of Condition: Expenditures could be processed and paid without proper authorization and posted to an improper period. Questioned Costs: none. Recommendation: Develop procedures to ensure purchases are authorized prior to recording and paying the invoice. The procedures may include development of lines of authority whereby an individual is approved to authorize purchases up to a particular dollar threshold and require that all invoices/documentation be signed/initialed by authorized approver. Accounts payable process should include cutoff procedures to ensure expenditure is recorded in period that liability is incurred. Corrective Action Plan: Policies and procedures will be clearly defined both administratively and within each department to ensure purchases are authorized prior to recording and paying the invoice. The procedures will include development of lines of authority for approval and to authorize purchases, including up to a particular dollar threshold where applicable. The procedures will also require that all invoices/documentation, purchase order forms and packing slips be signed/initialed by authorized approver. Accounts payable process will include cutoff procedures to ensure expenditure is recorded in period that liability is incurred. All department managers and administrative staff will attend training and routine follow-up training on purchasing policies and procedures. A sign in sheet will be required for those attending. Contact Person: Grant Accounting Specialist Anticipated Completion Date: 01/31/2026
Condition: Support for expenditure transactions does not indicate approval from an appropriate manager with authority over the department/program. Auditor tested 57 transactions of which 17 did not include evidence of approval (excluding routine expenditures such as utility bills). Criteria: Generally accepted control procedures and 2 CFR 200.302. Cause of Condition: Initiating procurement transactions without proper approval or failing to document that approval was obtained prior to initiating the transaction. Effect of Condition: Unapproved charges, including potential unallowable costs, may be incurred and charged to the District, including federal or state programs. Additionally, the potential exists for fraud or errors to go undiscovered and uncorrected in a timely manner. Questioned Costs: none.Recommendation: We recommend that a purchase order or purchase requisition system be devised to ensure all expenditures, including those paid for by credit cards, are approved by an appropriate manager prior to making the purchase. Corrective Action Plan: Beginning January 2026, all purchases, including credit card transactions, will require Purchase approval by the Program Manager and administration prior to purchase. A Purchase Order tracking process will be implemented in Blackbaud Financial Edge NXT by April 2026 to ensure all expenditures are properly documented. All department managers and administrative staff will attend training and routine follow-up training on purchasing policies and procedures. A sign in sheet will be required for those attending. The Financial Procedures Manual will be created and updated by June 2026 to include revised procurement approval requirements. Contact Person: Grant Accounting Specialist Anticipated Completion Date: 06/01/2026
Condition: 1- Gross payroll calculations could not be supported for several employees tested due to missing pay rate support. 2- Gross payroll calculations could not be supported for several employees tested due to missing timesheets. 3- Classification errors were noted in 2 of 11 periods tested (34 of 86 individuals tested). Criteria: Generally accepted control procedure and 2 CFR 200.302 Cause of Condition: Missing documentation resulted in conditions 1 and 2. The cause of the classification differences between the accounting department’s payroll worksheet and the general ledger postings are unknown. Due to staff turnover, the cause could not be determined. Effect of Condition: Employees may be paid at unapproved rates or for unworked time. Classification errors may result in over/under charging grant programs.Questioned Costs: Condition 1: Known: $ 412.54 Questioned: $ 5,580.24 Condition 2: Known: $ 20,357.31 Questioned: n/a Condition 3: Known: $ 91,593.05 Questioned: n/a Recommendation: We recommend: - Records be retained to support all transactions recorded to the general ledger. - Department managers review and approve all payroll-related source documents (personnel action forms, timesheets, etc.) prior to finalizing the payroll run. - Administrative manager review and approve payroll worksheet prior to finalizing the payroll run and posting to the general ledger. Corrective Action Plan: Beginning January 2025, the District strengthened payroll documentation and review procedures to ensure compliance with 2 CFR 200.302. Personnel Action Forms and timesheets will be required, approved by department managers, and retained electronically for all employees. The Administrative staff reviews and approves payroll worksheets prior to posting to the general ledger. All department managers and administrative staff will attend training and routine follow-up training on purchasing policies and procedures. A sign in sheet will be required for those attending. Contact Person: Grant Accounting Specialist Anticipated Completion Date: 01/31/2026
Condition: The District has not adopted written policies or procedures regarding procurements or the determination of allowable costs in accordance with the Uniform Guidance. Criteria: 2 CFR 200.302(b)(7), 2 CFR 200.318(a), and 2 CFR 200.319(d). Cause of Condition: Unfamiliarity with requirements stated in 2 CFR 200 of the Uniform Guidance.Effect of Condition: Effect is a state of noncompliance which may impact future grant awards or failure to identify and reject un-allowed costs charged to grant programs. Questioned Costs: none. Recommendation: Draft and adopt policies and procedures to become compliant with Uniform Guidance. Corrective Action Plan: Agency policies and procedures, including a guidance template will be clearly defined to ensure compliance with Uniform Guidance. All department managers and administrative staff will attend training and routine follow-up training on purchasing policies and procedures. A sign in sheet will be required for those attending. Contact Person: Grant Accounting Specialist Anticipated Completion Date: 01/31/2026
Federal programs: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) CFDA Number: 84.425E / 84.425F Federal award identification number: P425E205418 / P425F204999 Grant period: September 29, 2020 to June 30, 2023 and July 23, 2020 to May 23, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control Finding Type: Material Weakness Compliance requirement: Other ? Policies and procedures requirements Condition and context When obtaining an understanding of the internal controls, policies, and procedures regarding the administration of federal programs, and grant term and conditions, we noted the following deficiencies: a. There is no written policy, nor the procedures designed and implemented by the Institution related to Cash Management were documented. The Institution opted to request the funds on a reimbursement basis. b. There were no written procedures for determining the allowability of costs in accordance with 2 CFR 200 subpart E of this part and the terms and conditions of the Federal award. c. After examination of the Institution procurement policy, we noted that the document was not signed by all members required from management and was not dated. Upon inquiry, we noted that the procurement policy was drafted and submitted to the Institution for review in February 2023. Therefore, no written policy and formal procedures were designed and implemented for the procurement transactions tested for the fiscal year ended July 31, 2022 and thereafter. Criteria 2 CFR 200.302 (b) (6) and (7) establish that the financial management system of each non-Federal entity must provide for the following: written procedures to implement the requirements of ? 200.305, and written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award. 2 CFR 200.303 establish that 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); (b) comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards; (c) evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards; (d) take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (e) take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. 2 CFR 200.318 (a) establishes that the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200.400 (a) to (d) establish that the application of these cost principles is based on the fundamental premises that: (a) the non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices; (b) the non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award; (c) the non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award; (d) the application of these cost principles should require no significant changes in the internal accounting policies and practices of the non-Federal entity. However, the accounting practices of the non-Federal entity must be consistent with these cost principles and support the accumulation of costs as required by the principles and must provide for adequate documentation to support costs charged to the Federal award. Cause The Institution?s federal programs received prior the fiscal year ended July 31, 2020 did not require the implementation of written procedures as mentioned in the condition and context section, except for Cash Management policies and procedures for the Student Financial Assistance Programs Cluster for which the Institution has designed and implemented written procedures for such compliance requirement. The Covid-19 pandemic related programs were the reason why this new federal program funds were received, and the entity failed to design and implement on a timely basis the required written documentation and procedures. Effect Noncompliance with the above-mentioned requirement could lead to administrative sanctions by the grantor, including disallowance of costs. It could also be interpreted as a failure to achieve the program?s objectives. Questioned costs None. Identification as a Repeat Finding No repeated finding. Recommendation We recommend the Institution to implement written policies and procedures needed for the administration of federal grants before the acceptance of new grants. Having well sounded policies and procedures will reduce the Institution risk of non-compliance with federal regulations and grants terms and conditions. Also, they will provide guidance to the Institution?s personnel on how to carry-out their responsibilities and functions in relation to the administration of federal programs transactions. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.
Assistance listing program: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425E / 84.425F Award identification number: P425F204999 / P425E205418 Award period: September 29, 2020 to June 30, 2023 and July 23, 2020 to May 23, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control Finding Type: Significant Deficiency Compliance requirement: Cash Management Condition and context In testing compliance and internal controls over cash management, we selected a sample of four (4) drawdowns which amounted to $342,787 of the total HEERF Institutional aid funds expenditures. Our sample was a statistically valid sample. During our test, we noted that in one (25%) of the four (4) drawdowns selected, for three payments made by the Institution the time elapsed between the receipt of funds and the check issuance was between 20 to 48 days. The total amount disbursed after the three elapsed days requirement was $4,020 from a drawdown total of $56,065. Criteria 2 CFR 200.302 (b) (6) requires written procedures to implement the requirements of 200.305. 2 CFR 200.305 (b) and (b) (1) establish 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. See also 200.302(b)(6). Except as noted elsewhere in this part, Federal agencies must require recipients to use only OMB-approved, governmentwide information collection requests to request payment. The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. 2 CFR 200.303 (a) to (d) establish that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. 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). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. Cause The Institution did not design and implemented internal controls and procedures for this compliance requirement, including written policies and procedures. Effect Noncompliance with the above-mentioned requirements could lead to administrative actions by the grantor. It could also be interpreted as a failure to manage federal awards in compliance with laws, regulations, and provisions of contracts and grant agreements. Questioned costs Likely questioned costs are less than $25,000. Identification as a Repeat Finding No repeated finding. Recommendations We recommend the Institution to design and implement written internal controls and procedures for the administration of federal funds requests in accordance with the requirements of grant agreements and 2 CFR 200. Internal controls and procedures must consider maintaining adequate documentation to support the petitions of funds and to maintain the audit trail of the payments that will be issued. The Institution shall request only the amount of funds necessary to meet its immediate cash needs to prevent excess cash balances. Whenever payment amounts are adjusted after the funds were requested or received, such excess cash should be returned to the federal agency immediately. Establishing reliable and thorough cash forecasting procedures and subjecting such forecasts to the formal review and approval of Institution?s management should meet this objective. Also, the Institution shall coordinate and provide pertinent training to the finance personnel regarding the federal regulations related to the cash management requirements. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.
Assistance listing program: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425E / 84.425F Award identification number: P425F204999 / P425E205418 Award period: September 29, 2020 to June 30, 2023 and July 23, 2020 to May 23, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control / Compliance Finding Type: Material Weakness Compliance requirement: Reporting Condition and context For testing internal controls and compliance with reporting requirements applicable to the HEERF programs, we inquired the Institution about the internal controls and procedures for determining the criteria and methodology used in compiling and reporting the data to be included in the annual and quarterly special reports. We requested a copy of the annual report for the calendar year 2021 and the quarterly reports for the quarter ended on December 31, 2021 related to the institutional aid portion and the student aid portion. As part of our procedures, we tested the method of distribution of grants to ascertain consistency with the method that was actually employed by the Institution to distribute emergency financial aid grants to students. After our examination and tests performed, we noted the following: a) The methodology used to compile the information in the annual report was based on the funds drawdowns which were based on disbursements rather than the actual program expenditures for the Institutional aid funds in accordance with GAAP. b) After examination of the institutional aid portion expenditures amounts reported in the annual special report for the calendar year ended December 31, 2021 to the support provided by the Institution, we noted that the total of institutional annual expenditures was understated by $7,160. c) From the sample of enrollment statistical data selected for verification to the source documents and/or information we noted several differences and were unable to identify some of the information in the source documents in nineteen (19) out of a sample of thirty (30) statistical data lines examined in the annual special report. The exceptions were as follows: d) After examination of the quarterly special report of the student aid portion for the quarter ended December 31, 2021, we noted a difference in the Item #5: ?The total number of students who have received an Emergency Financial Aid Grant to students under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms?. The total of students that received assistance aid reported was 443; however, the number per the student aid payroll reports examined was 460. Additionally, no support was available to determine if the Institution was timely and accurate in publicly posting the quarterly Student Aid Portion Report selected for testing. e) In one out of a sample of forty (40) disbursements of financial aid to students (2.5%) we noted that the payment made did not agree with the Institution's fund distribution plan to prioritize students with financial need. The aid in excess disbursed to that student was $200. Criteria 2 CFR 200.302 (a) establishes that each state must expend and account for the Federal award in accordance with state laws, and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.302 (b) (2) to (4) establish that 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. If a Federal awarding agency requires reporting on an accrual basis from a recipient that maintains its records on other than an accrual basis, the recipient must not be required to establish an accrual accounting system. This recipient may develop accrual data for its reports on the basis of an analysis of the documentation on hand. Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income, and interest and be supported by source documentation. Effective control over, and accountability for, all funds, property, and other assets. 2 CFR 200.303 (a) to (d) establish that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. 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). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. 2 CFR 200.334 establishes that financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. Cause The cause of the deficiencies noted were due to the following situations: a) The source of information provided by the Institution related to the financial information was the G5 report. Such information is on a cash basis; therefore, financial information was not reported on an accrual basis of accounting which is the basis of accounting followed by the Institution. Additionally, the Institution did not appropriately design and maintained documentation and/or analysis performed to prepare and complete the financial information required to be reported in the quarterly and annual reports. b) Lack of recordkeeping controls and procedures to document and maintain the source of information used for the financial and statistical data required in the annual and quarterly special reports. c) The Institution used the student EFC per the ISIR/SAR available at the time of the distribution, even though, an ISIR with a valid EFC was not available since the student FAFSA application was selected for verification by USDE. After the Institution completed the verification the student EFC increased from 0 to 3676. Effect Noncompliance with the reporting requirements could lead to significant administrative actions by the grantor, including a reduction in the amounts to be awarded. It could also be interpreted as a failure to achieve the programs objectives. Questioned costs Likely questioned costs are less than $25,000. Identification as a Repeat Finding No repeated finding. Recommendation We recommend the Institution to establish adequate procedures and controls to ensure that financial and statistical data information is properly supported and detailed to allow adequate audit trail of the information. Establish adequate supervisory procedures to identify, in a reasonable period of time, deficiencies or possible deficiencies in the procedures or guidance established by management to ascertain that the Institution reports the information as required by grantors, and that accurate and adequate support is properly maintained. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.