Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Condition: For the fiscal year ended June 30, 2022, we requested that Day One prepare and send us a Schedule of Expenditures of Federal Awards. Requested that the expenditures reported in the SEFA be reconciled to Day One’s accounting records. We reviewed the SEFA and compared them to the accounting records; we noted that the expenditures reported were inaccurate. Criteria: Recipients of federal awards are subject to requirements documented in section of the Uniform Guidance Sections 200.510, 200.502, and 200.302. The criteria for each are as follows: § 200.510 Financial statements (b) Schedule of expenditures of Federal awards. 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 § 200.502.” § 200.502 Basis for determining Federal awards expended (a) Determining Federal awards expended. The determination of when a federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. § 200.302 Financial management (a) 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.The financial management system of each non-Federal entity must provide for (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements…..” Questioned Costs: None Cause: The Organization has not implemented policies and procedures requiring that the Schedule of Federal Awards to complete and accurate. Effect and Context: The Organization reported expenditures that exceeded $750,000 for 2022. In determining the major program to be audited for 2022, the auditor could not rely on the SEFA provided because the SEFA was not complete and expenditures reported were inaccurate. Which could have lead to an inaccurate reporting of federal expenditures for the Organization for 2022. Recommendation: We recommend that management implement policies and procedures requiring all federal expenditures be accurately reported in the year end Schedule of Federal Awards. Management’s Response and Corrective Action Plan: See management’s responses documented on page 46-47.
Condition: For the fiscal year ended June 30, 2022, we requested that Day One prepare and send us a Schedule of Expenditures of Federal Awards. Requested that the expenditures reported in the SEFA be reconciled to Day One’s accounting records. We reviewed the SEFA and compared them to the accounting records; we noted that the expenditures reported were inaccurate. Criteria: Recipients of federal awards are subject to requirements documented in section of the Uniform Guidance Sections 200.510, 200.502, and 200.302. The criteria for each are as follows: § 200.510 Financial statements (b) Schedule of expenditures of Federal awards. 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 § 200.502.” § 200.502 Basis for determining Federal awards expended (a) Determining Federal awards expended. The determination of when a federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. § 200.302 Financial management (a) 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.The financial management system of each non-Federal entity must provide for (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements…..” Questioned Costs: None Cause: The Organization has not implemented policies and procedures requiring that the Schedule of Federal Awards to complete and accurate. Effect and Context: The Organization reported expenditures that exceeded $750,000 for 2022. In determining the major program to be audited for 2022, the auditor could not rely on the SEFA provided because the SEFA was not complete and expenditures reported were inaccurate. Which could have lead to an inaccurate reporting of federal expenditures for the Organization for 2022. Recommendation: We recommend that management implement policies and procedures requiring all federal expenditures be accurately reported in the year end Schedule of Federal Awards. Management’s Response and Corrective Action Plan: See management’s responses documented on page 46-47.
Type: Federal Award, Significant Deficiency, Controls over Schedule of Expenditures of Federal Awards (SEFA) Assistance Listing Number: U.S. Department of Housing 14.218 Community Development Block Grant U.S. Department of Treasury 21.019 Coronavirus Relief Fund Criteria/Requirement: The Organization’s accounting system should clearly identify federal expenditures with minimal adjustments in accordance with 2 CFR 200.302. Condition/Context: The Organization did not identify all federal awards and significant audit adjustments were required to the SEFA prepared by management. Cause: The Organization received additional funding due to COVID-19 increasing the complexities of tracking by specific components of the award. A significant portion of the tracking is maintained in manual spreadsheets outside of the accounting system. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures and controls to accurately capture all activity under federal awards in preparing the SEFA. Management’s Response: The Organization experienced disruption due to COVID-19 that had impacts on capacity. New contracts and source of funding are now being identified and recorded in the accounting system.
Type: Federal Award, Significant Deficiency, Controls over Schedule of Expenditures of Federal Awards (SEFA) Assistance Listing Number: U.S. Department of Housing 14.218 Community Development Block Grant U.S. Department of Treasury 21.019 Coronavirus Relief Fund Criteria/Requirement: The Organization’s accounting system should clearly identify federal expenditures with minimal adjustments in accordance with 2 CFR 200.302. Condition/Context: The Organization did not identify all federal awards and significant audit adjustments were required to the SEFA prepared by management. Cause: The Organization received additional funding due to COVID-19 increasing the complexities of tracking by specific components of the award. A significant portion of the tracking is maintained in manual spreadsheets outside of the accounting system. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures and controls to accurately capture all activity under federal awards in preparing the SEFA. Management’s Response: The Organization experienced disruption due to COVID-19 that had impacts on capacity. New contracts and source of funding are now being identified and recorded in the accounting system.
Type: Federal Award, Significant Deficiency, Controls over Schedule of Expenditures of Federal Awards (SEFA) Assistance Listing Number: U.S. Department of Housing 14.218 Community Development Block Grant U.S. Department of Treasury 21.019 Coronavirus Relief Fund Criteria/Requirement: The Organization’s accounting system should clearly identify federal expenditures with minimal adjustments in accordance with 2 CFR 200.302. Condition/Context: The Organization did not identify all federal awards and significant audit adjustments were required to the SEFA prepared by management. Cause: The Organization received additional funding due to COVID-19 increasing the complexities of tracking by specific components of the award. A significant portion of the tracking is maintained in manual spreadsheets outside of the accounting system. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures and controls to accurately capture all activity under federal awards in preparing the SEFA. Management’s Response: The Organization experienced disruption due to COVID-19 that had impacts on capacity. New contracts and source of funding are now being identified and recorded in the accounting system.
Type: Federal Award, Significant Deficiency, Controls over Schedule of Expenditures of Federal Awards (SEFA) Assistance Listing Number: U.S. Department of Housing 14.218 Community Development Block Grant U.S. Department of Treasury 21.019 Coronavirus Relief Fund Criteria/Requirement: The Organization’s accounting system should clearly identify federal expenditures with minimal adjustments in accordance with 2 CFR 200.302. Condition/Context: The Organization did not identify all federal awards and significant audit adjustments were required to the SEFA prepared by management. Cause: The Organization received additional funding due to COVID-19 increasing the complexities of tracking by specific components of the award. A significant portion of the tracking is maintained in manual spreadsheets outside of the accounting system. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures and controls to accurately capture all activity under federal awards in preparing the SEFA. Management’s Response: The Organization experienced disruption due to COVID-19 that had impacts on capacity. New contracts and source of funding are now being identified and recorded in the accounting system.
2021-005 Material Weakness and Material Noncompliance: Grant and Reporting Compliance Department of Commerce - Investments for Public Works and Economic Development Facilities – CFDA No. 11.300 - Year ended June 30, 2022 Condition: The City failed to adequately review and reconcile the last pay request from the contractor and overpaid the contractor. As a result, the City also requested this overpayment amount from the Federal grant and it was funded to the City. Requests for reimbursement and semi-annual reporting is being reviewed by financial management, but there was no evidence that a reconciliation to the accounting system (i.e. general ledger) was performed, which resulted in material misstatements in the requests and reporting. Criteria: As a requirement of Federal cost principles found in 2 CFR 200.302, as well as the grant agreement with the U.S. Department of Commerce Economic Development Administration (EDA), the City’s accounting system should reconcile directly, and easily, to the grant reports/funds requests submitted to the grantors, the grant reporting should be free of material misstatements, and the grant files should be appropriately organized. Additionally, costs paid on this project with Federal funds cannot consist of improper payments, including overpayments, which are considered unallowable costs under the Federal cost principles. Cause: There was no reconciliation of grant reporting (including funds requests) to the general ledger in the accounting system, which resulted in the overpayment and overfunding. Effect: Grant project costs reporting (SF-425) were submitted to EDA with material misstatements and funds requests (SF-271) were misstated resulting in the overfunding of project costs. Material weakness in internal controls over compliance and material noncompliance with reporting occurred due to these misstatements and the lack of reconciliation to the accounting system. The same questioned costs as stated in Finding 2022-001, $52,446, also relates to this major award program. Context: The audit examined 100% of the fund’s requests (SF-271 #3 through #10) covering the entire fiscal year accrual period. The total Federal share requested exceeded total allowable project costs by $52,446, the amount of the questioned costs. The overpayment of the contractor and overfunding appear to be isolated and not pervasive. This is a repeat finding. Recommendation: I recommend the City ensure the accounting system reconciles to the funds requests without exception, to ensure invoices from contractors are correct before paying and to document the reconciliation to the accounting system. Views of Responsible Officials: The City agrees with the finding.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
CONDITION -The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official Municipality’s accounting system. According to an analysis prepared by the Municipality of the bank account assigned to manage the use of Coronavirus Relief Fund (CRF) PHE - Transfer Funds, and transactions through this bank account during the fiscal year ended June 30, 2022, $1,802,962 has been expended or transferred to the general fund to cover eligible expenses under the terms allowed by the CRF PHE - Transfer Funds. As a consequence of these conditions, compliance with reporting requirements established by the pass-through entity, and related internal controls, could not be verified. CRITERIA - According to the Transfer Agreements, the transferee shall submit reports as the transferor determines are needed to verify use of the funds and compliance with conditions that are imposed on the transfer, and such reports shall be in such form, with such content, as specified by the transferor in the transfer plan and future program instructions directed to all recipients. Transferor will transfer emergency assistance fund to transferee for necessary expenditures related to the COVID-19 emergency by making a transfer on the basis set out in this Agreement and in the Transfer Plan. The reports must be due on the 15th day of each month, the transferee will submit a use of funds transfer report for the prior month’s expenses. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the 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. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue, costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. CAUSE - There is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. EFFECT - The program is exposed to not being in compliance with the Reporting Requirements as established in agreement. Also, the Municipality is exposed to the Grantor questioning the use of funds. RECOMMENDATION - We recommend that the staff or department in charge locate and document all required reports that were filed according to the requirements of the grant agreement, including the reconciliation thereof with the official Municipality’s accounting subsidiaries. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.
CONDITION - The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official Municipality’s accounting system. According to an analysis prepared by the Municipality of the bank account assigned to manage the use of Coronavirus Relief Fund (CRF) PHE – Testing and Contact Tracing, and transactions through this bank account during the fiscal year ended June 30, 2022, $156,846 has been expended or transferred to the general fund to cover eligible expenses under the terms allowed by the CRF PHA - Tracing and Contact Tracing. As a consequence of these conditions, compliance with reporting requirements established by the pass-through entity, and related internal controls, could not be verified. CRITERIA - According to the Transfer Agreements, the transferee shall submit reports as the transferor determines are needed to verify use of the funds and compliance with conditions that are imposed on the transfer, and such reports shall be in such form, with such content, as specified by the transferor in the transfer plan and future program instructions directed to all recipients. Transferor will transfer emergency assistance fund to transferee for necessary expenditures related to the COVID-19 emergency by making a transfer on the basis set out in this Agreement and in the Transfer Plan. The reports must be due on the 15th day of each month, the transferee will submit a use of funds transfer report for the prior month’s expenses. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the 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. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue, costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. CAUSE - There is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. EFFECT - The program is exposed to not being in compliance with the Reporting Requirements as established in agreement. Also, the Municipality is exposed to the Grantor questioning the use of funds. RECOMMENDATION - We recommend that the staff or department in charge locate and document all required reports that were filed according to the requirements of the grant agreement, including the reconciliation thereof with the official Municipality’s accounting subsidiaries. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.
CONDITION - The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official Municipality’s accounting system. According to an analysis prepared by the Municipality of the bank account assigned to manage the use of Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and transactions through this bank account during the fiscal year ended June 30, 2022, $625,053 has been expended or transferred to the general fund to cover eligible expenses under the terms allowed by the CSLFRF. As a consequence of these conditions, compliance with reporting requirements established by the federal grantor, and related internal controls, could not be verified. CRITERIA - Per the Compliance and Reporting Guidance – Part I: General Guidance – Section D: Uniform Administrative Requirements – Section 10: Reporting: establishes that: All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Recipients should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, recipients need to establish controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the 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. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue, costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. CAUSE - There is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. EFFECT - The program is exposed to not being in compliance with the Reporting Requirements as established in agreement. Also, the Municipality is exposed to the Grantor questioning the use of funds. RECOMMENDATION - We recommend that the staff or department in charge locate and document all required reports that were filed according to the requirements of the grant agreement, including the reconciliation thereof with the official Municipality’s accounting subsidiaries. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.
CONDITION - The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official Municipality’s accounting system. According to an analysis prepared by the Municipality of the bank account assigned to manage the use of Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and transactions through this bank account during the fiscal year ended June 30, 2022, $625,053 has been expended or transferred to the general fund to cover eligible expenses under the terms allowed by the CSLFRF. As a consequence of these conditions, compliance with reporting requirements established by the federal grantor, and related internal controls, could not be verified. CRITERIA - Per the Compliance and Reporting Guidance – Part I: General Guidance – Section D: Uniform Administrative Requirements – Section 10: Reporting: establishes that: All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Recipients should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, recipients need to establish controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the 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. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue, costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. CAUSE - There is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. EFFECT - The program is exposed to not being in compliance with the Reporting Requirements as established in agreement. Also, the Municipality is exposed to the Grantor questioning the use of funds. RECOMMENDATION - We recommend that the staff or department in charge locate and document all required reports that were filed according to the requirements of the grant agreement, including the reconciliation thereof with the official Municipality’s accounting subsidiaries. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.
CONDITION - The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official Municipality’s accounting system. CRITERIA - The state is required to make an accounting to FEMA of eligible costs. Similarly, the subrecipient must make an accounting to the state. In submitting the accounting, the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project in in compliance with the provisions of the FEMA-State Agreement, all grants conditions were met, ant the provisions for that project were made in accordance with the applicable payment provisions. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the 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. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue, costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. CAUSE - There is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. EFFECT - The program is exposed to not being in compliance with the Reporting Requirements as established in agreement. Also, the Municipality is exposed to the Grantor questioning the use of funds. RECOMMENDATION - We recommend that the staff or department in charge locate and document all required reports that were filed according to the requirements of the grant agreement, including the reconciliation thereof with the official Municipality’s accounting subsidiaries. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.
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.
Finding # 2022-002 Program - Various, including AL 20.509 ? Formula Grants for Rural Areas ? Reporting Grant Number & Year - Various Federal Grantor Agency -Various, including U.S. Department of Transportation Pass-Through Entity -Various, including Nebraska Department of Transportation Criteria - Title 2 of the U.S. Code of Federal Regulations (CFR) ? 200.510(b) (January 1, 2022) states, in part, the following: 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 ? 200.502. Title 2 CFR ? 200.302(b) (January 1, 2022) states, in relevant part, the following: 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. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. On January 18, 2020, the Office of Management and Budget (OMB) issued Memorandum M-20-26, which included the following requirement to identify separately COVID-19 Emergency Acts expenditures on the Schedule of Expenditures of Federal Awards. Additionally, in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify COVID-19 Emergency Acts expenditures on the Schedule of Federal Awards and audit report findings. Title 2 CFR ? 200.303 (January 1, 2022) states the following, in relevant part: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ``Standards for Internal Control in the Federal Government?? issued by the Comptroller General of the United States or the ``Internal Control Integrated Framework??, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). A good internal control plan requires adequate procedures to ensure the Schedule of Expenditures Federal Awards (SEFA) is properly presented and includes all Federal expenditures made by the County during the fiscal year, including properly identifying COVID-19 expenditures. Furthermore, such internal control plan should also include procedures to ensure Federal reimbursements are properly recorded using a Federal revenue code in the County?s accounting system. Condition -Kimball County does not have adequate procedures in place to ensure the Schedule of Expenditures of Federal Awards (SEFA) is completed accurately and includes all Federal expenditures paid by the County. Specifically, we noted the following errors during our audit: ?Expenditures of $32,031 for Assistance Listing 20.509 were omitted from the County?s fiscal year ending June 30, 2021, SEFA. This was not considered a material error, and it would not have impacted major program determination for the fiscal year 2021 audit. ?Expenditures for fiscal year 2022, originally reported by Kimball County for Assistance Listing 20.509, did not include expenditures of $5,310 actually incurred during the fiscal year. ?Expenditures originally reported by Kimball County for Assistance Listing 20.509 did not identify $55,464 of COVID-19 expenditures separately. ?Federal reimbursements, totaling $23,719, were not recorded to a Federal revenue code in the County?s accounting system. Instead, this funding was recorded to a miscellaneous revenue code. Repeat Finding -No Questioned Costs - None Statistical Sample -No Cause - Administration of Federal awards is decentralized, with each County office operating independently without any centralized reporting procedures in place to ensure all Federal expenditures of the County are accurately reported on the SEFA. Additionally, there is an overall lack of knowledge by County personnel related to Federal reporting and compliance requirements. Effect -Increased risk for the SEFA to be inaccurate, which could lead to Federal sanctions or failure to audit programs that should be audited. Recommendation -We recommend the County establish written procedures to ensure the SEFA is complete and accurate. Such procedures may include, among other things, a requirement that all offices in the County responsible for administering Federal grants report their grant expenditures, as well as related information, to a single individual in the County with overall responsibility for Federal reporting requirements. That individual should be knowledgeable of all Federal reporting and compliance requirements, and review expenditures provided by each office to ensure all amounts are accurate and include all Federal expenditures of the County. View of Officials -Moving forward the transit office will implement a policy and get training to ensure compliance.
Criteria 2 CFR 200.303 requires that the entity establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Nonfederal entities are required to have certain written policies and procedures surrounding the management of their federal award funding. 2 CFR 200.302 Financial Management, Uniform Guidance require that entities receiving Federal Awards have written policies, ensuring procedures are in place for approval, budget, asset protection and training employees. Condition The County has not adopted policies and procedures to ensure that required internal controls for reporting are in place and operating sufficiently to ensure compliance with Uniform guidance. Questioned Costs None Cause As this is a repeat finding, the County was aware of the requirements, however, they are currently in the process of creating written policies and procedures pursuant to the Uniform Guidance. Effect or Potential Effect The County could be in violation with State and Federal regulations governing Federal awards. Recommendation We recommend that the County continue to work on creating policies and procedures and complete the process in a timely manner. Views of Responsible Officials and Planned Corrective Actions See the following page(s) for the County?s response to this finding.
Criteria 2 CFR 200.303 requires that the entity establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Nonfederal entities are required to have certain written policies and procedures surrounding the management of their federal award funding. 2 CFR 200.302 Financial Management, Uniform Guidance require that entities receiving Federal Awards have written policies, ensuring procedures are in place for approval, budget, asset protection and training employees. Condition The County has not adopted policies and procedures to ensure that required internal controls for reporting are in place and operating sufficiently to ensure compliance with Uniform guidance. Questioned Costs None Cause As this is a repeat finding, the County was aware of the requirements, however, they are currently in the process of creating written policies and procedures pursuant to the Uniform Guidance. Effect or Potential Effect The County could be in violation with State and Federal regulations governing Federal awards. Recommendation We recommend that the County continue to work on creating policies and procedures and complete the process in a timely manner. Views of Responsible Officials and Planned Corrective Actions See the following page(s) for the County?s response to this finding.
Criteria 2 CFR 200.303 requires that the entity establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Nonfederal entities are required to have certain written policies and procedures surrounding the management of their federal award funding. 2 CFR 200.302 Financial Management, Uniform Guidance require that entities receiving Federal Awards have written policies, ensuring procedures are in place for approval, budget, asset protection and training employees. Condition The County has not adopted policies and procedures to ensure that required internal controls for reporting are in place and operating sufficiently to ensure compliance with Uniform guidance. Questioned Costs None Cause As this is a repeat finding, the County was aware of the requirements, however, they are currently in the process of creating written policies and procedures pursuant to the Uniform Guidance. Effect or Potential Effect The County could be in violation with State and Federal regulations governing Federal awards. Recommendation We recommend that the County continue to work on creating policies and procedures and complete the process in a timely manner. Views of Responsible Officials and Planned Corrective Actions See the following page(s) for the County?s response to this finding.
Criteria 2 CFR 200.303 requires that the entity establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Nonfederal entities are required to have certain written policies and procedures surrounding the management of their federal award funding. 2 CFR 200.302 Financial Management, Uniform Guidance require that entities receiving Federal Awards have written policies, ensuring procedures are in place for approval, budget, asset protection and training employees. Condition The County has not adopted policies and procedures to ensure that required internal controls for reporting are in place and operating sufficiently to ensure compliance with Uniform guidance. Questioned Costs None Cause As this is a repeat finding, the County was aware of the requirements, however, they are currently in the process of creating written policies and procedures pursuant to the Uniform Guidance. Effect or Potential Effect The County could be in violation with State and Federal regulations governing Federal awards. Recommendation We recommend that the County continue to work on creating policies and procedures and complete the process in a timely manner. Views of Responsible Officials and Planned Corrective Actions See the following page(s) for the County?s response to this finding.
Criteria 2 CFR 200.303 requires that the entity establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Nonfederal entities are required to have certain written policies and procedures surrounding the management of their federal award funding. 2 CFR 200.302 Financial Management, Uniform Guidance require that entities receiving Federal Awards have written policies, ensuring procedures are in place for approval, budget, asset protection and training employees. Condition The County has not adopted policies and procedures to ensure that required internal controls for reporting are in place and operating sufficiently to ensure compliance with Uniform guidance. Questioned Costs None Cause As this is a repeat finding, the County was aware of the requirements, however, they are currently in the process of creating written policies and procedures pursuant to the Uniform Guidance. Effect or Potential Effect The County could be in violation with State and Federal regulations governing Federal awards. Recommendation We recommend that the County continue to work on creating policies and procedures and complete the process in a timely manner. Views of Responsible Officials and Planned Corrective Actions See the following page(s) for the County?s response to this finding.
Criteria 2 CFR 200.303 requires that the entity establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Nonfederal entities are required to have certain written policies and procedures surrounding the management of their federal award funding. 2 CFR 200.302 Financial Management, Uniform Guidance require that entities receiving Federal Awards have written policies, ensuring procedures are in place for approval, budget, asset protection and training employees. Condition The County has not adopted policies and procedures to ensure that required internal controls for reporting are in place and operating sufficiently to ensure compliance with Uniform guidance. Questioned Costs None Cause As this is a repeat finding, the County was aware of the requirements, however, they are currently in the process of creating written policies and procedures pursuant to the Uniform Guidance. Effect or Potential Effect The County could be in violation with State and Federal regulations governing Federal awards. Recommendation We recommend that the County continue to work on creating policies and procedures and complete the process in a timely manner. Views of Responsible Officials and Planned Corrective Actions See the following page(s) for the County?s response to this finding.
Criteria 2 CFR 200.303 requires that the entity establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Nonfederal entities are required to have certain written policies and procedures surrounding the management of their federal award funding. 2 CFR 200.302 Financial Management, Uniform Guidance require that entities receiving Federal Awards have written policies, ensuring procedures are in place for approval, budget, asset protection and training employees. Condition The County has not adopted policies and procedures to ensure that required internal controls for reporting are in place and operating sufficiently to ensure compliance with Uniform guidance. Questioned Costs None Cause As this is a repeat finding, the County was aware of the requirements, however, they are currently in the process of creating written policies and procedures pursuant to the Uniform Guidance. Effect or Potential Effect The County could be in violation with State and Federal regulations governing Federal awards. Recommendation We recommend that the County continue to work on creating policies and procedures and complete the process in a timely manner. Views of Responsible Officials and Planned Corrective Actions See the following page(s) for the County?s response to this finding.
Criteria 2 CFR 200.303 requires that the entity establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Nonfederal entities are required to have certain written policies and procedures surrounding the management of their federal award funding. 2 CFR 200.302 Financial Management, Uniform Guidance require that entities receiving Federal Awards have written policies, ensuring procedures are in place for approval, budget, asset protection and training employees. Condition The County has not adopted policies and procedures to ensure that required internal controls for reporting are in place and operating sufficiently to ensure compliance with Uniform guidance. Questioned Costs None Cause As this is a repeat finding, the County was aware of the requirements, however, they are currently in the process of creating written policies and procedures pursuant to the Uniform Guidance. Effect or Potential Effect The County could be in violation with State and Federal regulations governing Federal awards. Recommendation We recommend that the County continue to work on creating policies and procedures and complete the process in a timely manner. Views of Responsible Officials and Planned Corrective Actions See the following page(s) for the County?s response to this finding.