FINDING 2022-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, Contract #46504 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data reports (Reports) were complete and accurately submitted. The reports were prepared and submitted by one employee without any oversight, review, or approval process in place to prevent, or detect and correct, errors. Supporting documentation provided did not support the Full Time Equivalent (FTE) position amounts reported on the ESSER I, Yr. 1 and GEER I, Year 1 reports. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, Contract #46504 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data reports (Reports) were complete and accurately submitted. The reports were prepared and submitted by one employee without any oversight, review, or approval process in place to prevent, or detect and correct, errors. Supporting documentation provided did not support the Full Time Equivalent (FTE) position amounts reported on the ESSER I, Yr. 1 and GEER I, Year 1 reports. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, Contract #46504 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data reports (Reports) were complete and accurately submitted. The reports were prepared and submitted by one employee without any oversight, review, or approval process in place to prevent, or detect and correct, errors. Supporting documentation provided did not support the Full Time Equivalent (FTE) position amounts reported on the ESSER I, Yr. 1 and GEER I, Year 1 reports. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, Contract #46504 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data reports (Reports) were complete and accurately submitted. The reports were prepared and submitted by one employee without any oversight, review, or approval process in place to prevent, or detect and correct, errors. Supporting documentation provided did not support the Full Time Equivalent (FTE) position amounts reported on the ESSER I, Yr. 1 and GEER I, Year 1 reports. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2022-002 Financial Management Policy Program - Assistance to Tribally Controlled Community Colleges and Universities. Assistance Listing Number - 15.027. Federal Agency - U.S. Department of the Interior. Criteria - Uniform Guidance requires a non-federal entity to establish written financial management policies accordance with 2 CFR 200.302. The non-federal entity's financial management system must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Condition/Context - The College does not have written financial management policies. The identification of the BIE federal program expenditures were not able to be identified in the College's general ledger. Cause - The College's grant financial management policies were not updated to reflect the changes established by the Uniform Guidance. Effect - The identification of the BIE federal program expenditures were not able to be identified in the College's general ledger. Questioned Costs - None. Recommendation - The College formalize a written financial management policy in accordance with the Uniform Guidance and implement procedures to identify the federal expenditures for the BIE federal program. Views from Responsible Official - The College accepts the recommendation.
Criteria ? 2 CFR 200.302(b)(1) of the Uniform Guidance states that a nonfederal entity must identify in its accounts all federal awards received and expended, as well as the federal programs under which they were received, and those amounts must be accurately and completely reported on the SEFA. Condition ? During the audit, for the year ended June 30, 2022, expenditures of federal awards for certain programs were not included in the SEFA provided by the Museum. The SEFA was subsequently corrected and one of the federal programs was identified to be a major federal award program. Cause ? The funds received and the federal expenditures for the programs were not recorded in the Museum?s general ledger in the same manner as the other federal programs, and therefore, the funds expended were not identified and reported on the SEFA. Effect or Potential Effect ? A federal program that should have been identified as a major program would not have been included on the SEFA and not subjected to the required audit procedures. Recommendation ? All expenditures of federal awards should be recorded in the general ledger in a consistent manner such that the expenditures can be readily identified in preparing the SEFA. Responsible Official?s Response and Corrective Action Planned ? Refer to the Corrective Action Plan.
FINDING 2022-002 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education?s deadline. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education?s deadline. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education?s deadline. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
(2022-040) Title: Internal control over WIC cash balances needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services Administrative and Financial Services State Bureau: Maine Center for Disease Control & Prevention Health and Human Services Service Center Federal Agency: U.S. Department of Agriculture Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Assistance Listing Number: 10.557 Federal Award Identification Number: 194ME743W5003, 204ME743W5003, 214ME701W1003, 214ME743W5003, 224ME743W5003, 224ME701W1003 Compliance Area: Cash management Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Financial records must adequately identify the source and application of funds and provide accountability for all funds, property, and other assets related to the Federally funded activities. Condition: The Office of the State Auditor (OSA) issued finding 2019-021 as a result of procedures performed for the fiscal year 2019 audit. This finding identified that ?Program personnel did not take the existing cash balance into consideration when requesting Federal funds for the Food portion of the WIC grant.? This resulted in an excess cash balance for the Food grant. The finding was repeated as finding 2020-021 for the fiscal year 2020 audit and finding 2021-018 for the fiscal year 2021 audit. In response to these findings, the Department performed a reconciliation of all prior grant awards to determine the cause of the excess cash balance. This reconciliation identified a $1,055,088 discrepancy between the State?s accounting system, WIC reporting. and Federal draws from the 2013 WIC Food grant. Context: The Department calculated a $1,055,088 residual cash balance from WIC Food grant awards issued in 2013. Cause: Lack of adequate recordkeeping and account reconciliation in prior years Effect: The State may be required to return $1,055,088 to the Federal awarding agency. Recommendation: We recommend that the Department contact the Federal awarding agency to resolve this matter. Corrective Action Plan: See F-16 Management?s Response: The DHHS and DHHS Financial Service Center agree with this finding. To date, considerable effort has been invested in performing grant reconciliations from present back to 2013. Reconciling grants and matching revenues to expenses is labor intensive and takes detailed transaction level analysis. The Department will finalize the reconciliations and take the necessary steps to put the cash balances where they belong. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 22-1113-01)
(2022-040) Title: Internal control over WIC cash balances needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services Administrative and Financial Services State Bureau: Maine Center for Disease Control & Prevention Health and Human Services Service Center Federal Agency: U.S. Department of Agriculture Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Assistance Listing Number: 10.557 Federal Award Identification Number: 194ME743W5003, 204ME743W5003, 214ME701W1003, 214ME743W5003, 224ME743W5003, 224ME701W1003 Compliance Area: Cash management Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Financial records must adequately identify the source and application of funds and provide accountability for all funds, property, and other assets related to the Federally funded activities. Condition: The Office of the State Auditor (OSA) issued finding 2019-021 as a result of procedures performed for the fiscal year 2019 audit. This finding identified that ?Program personnel did not take the existing cash balance into consideration when requesting Federal funds for the Food portion of the WIC grant.? This resulted in an excess cash balance for the Food grant. The finding was repeated as finding 2020-021 for the fiscal year 2020 audit and finding 2021-018 for the fiscal year 2021 audit. In response to these findings, the Department performed a reconciliation of all prior grant awards to determine the cause of the excess cash balance. This reconciliation identified a $1,055,088 discrepancy between the State?s accounting system, WIC reporting. and Federal draws from the 2013 WIC Food grant. Context: The Department calculated a $1,055,088 residual cash balance from WIC Food grant awards issued in 2013. Cause: Lack of adequate recordkeeping and account reconciliation in prior years Effect: The State may be required to return $1,055,088 to the Federal awarding agency. Recommendation: We recommend that the Department contact the Federal awarding agency to resolve this matter. Corrective Action Plan: See F-16 Management?s Response: The DHHS and DHHS Financial Service Center agree with this finding. To date, considerable effort has been invested in performing grant reconciliations from present back to 2013. Reconciling grants and matching revenues to expenses is labor intensive and takes detailed transaction level analysis. The Department will finalize the reconciliations and take the necessary steps to put the cash balances where they belong. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 22-1113-01)
(2022-051) Title: Internal control over CSLFRF expenditures needs improvement Prior Year Findings: None State Department: Labor Administrative and Financial Services State Bureau: Unemployment Compensation Commissioner?s Office Office of the State Controller Federal Agency: U.S. Department of the Treasury Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (COVID-19) Assistance Listing Number: 21.027 Federal Award Identification Number: SLFRP0144 Compliance Area: Activities allowed or unallowed Allowable costs/cost principles Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: $51,482,644 Likely Questioned Costs: $51,482,644 Criteria: 2 CFR 200.303; 2 CFR 200.403; 2 CFR 200.302; Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Interim Final Rule, Federal Register Volume 86, Issue 93 (May 17, 2021) The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs must be adequately documented. The State?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 determine that such funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. The CSLFRF Interim Final Rule states that recipients may make deposits into the State account of the Unemployment Trust Fund up to the level needed to restore the pre-pandemic balances of such account as of January 27, 2020, or to pay back advances received for the payment of benefits between January 27, 2020, and May 17, 2021, given the close nexus between Unemployment Trust Fund costs, solvency of Unemployment Trust Fund systems, and pandemic economic impacts. Condition: As part of the American Rescue Plan Act, the State was advanced $997 million in Federal CSLFRF to support its response to and recovery from the COVID-19 public health emergency. In response, Public Law 2021, Chapter 483, Section D-1 was enacted and states that ?notwithstanding any provision of law to the contrary, the State Controller shall transfer $80 million from the Federal Expenditures Fund ? ARP State Fiscal Recovery balance to the Department of Labor, Unemployment Compensation Fund no later than November 30, 2021.? To support the allowability of the $80 million transfer under the Public Health and Economic Impacts use category, the Maine Department of Labor (MDOL) prepared an analysis that compared the balance between January 25, 2020 ($502,137,397) and September 30, 2021 ($405,167,938). Under this use category, transfers to the Unemployment Trust Fund are only allowable up to the level needed to restore the Trust Fund to the pre-pandemic balance as of January 27, 2020. The Department of Administrative and Financial Services (DAFS) reviewed and approved the calculation for reasonableness and allowability. As a result, DAFS transferred $80 million from the Federal Fund to the State Unemployment Trust Fund on November 30, 2021. Using the State?s Trust Fund Balance Reports, the Office of the State Auditor (OSA) compared the January 27, 2020, balance ($499,966,386) to the September 30, 2021, balance ($471,449,030). The $28,517,356 difference represents the amount allowed to restore the State Unemployment Trust Fund to the pre-pandemic balance as of January 27, 2020, under the Public Health and Economic Impacts use category. MDOL and DAFS were unable to provide: ? documentation supporting the $405.2 million balance on September 30, 2021, used to substantiate allowability of the $80 million transfer, and ? a justification of why the Trust Fund Balance Reports were not used in the calculation. Therefore, the $80 million transfer exceeds the amount needed to restore the State Unemployment Trust Fund to the pre-pandemic balance by $51,482,644 under the Public Health and Economic Impacts use category. Context: The $80 million transfer to the State?s Unemployment Trust Fund represents approximately 66 percent of the $121.5 million in CSLFRF expenditures during fiscal year 2022. Cause: Misinterpretation of Federal guidance Effect: ? Noncompliance with Federal regulations ? Known questioned costs and potential disallowances Recommendation: We recommend that MDOL and DAFS review expenditures charged to CSLFRF, including the above-noted expenditure, to ensure that costs are adequately documented to support that only allowable costs are funded by CSLFRF. Corrective Action Plan: See F-19 Management?s Response: We disagree with this finding. Likewise, we are unable to determine why the auditor has identified a questioned cost or includes a recommendation that only allowable costs are funded by CSLFRF. The transfer of $80 million to the Unemployment Trust Fund is completely allowable, with a portion categorized under the Public Health and Economic Impacts use category and a portion under the Revenue Loss - Provision of Government Services use category. Questioned costs are defined by the Uniform Guidance, 2CFR ? 200.1, Questioned cost means a cost that is questioned by the auditor because of an audit finding: (1) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds; In this case, there was no violation of statute, regulation or terms of the federal award for the SLFRF program (ALN 21.027). Regardless of category, the transfer of $80M to the UI Trust is considered an allowable cost under the program; thus, there is no portion of the transfer that is considered unallowable and no basis for a questioned cost. (2) Where the costs, at the time of the audit, are not supported by adequate documentation; or All parties agree that the transfer is allowable under the SLFRF program (ALN 21.027) and adequate documentation has been provided to support that determination. (3) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. All parties agree that the cost appears reasonable; consequently, there is no amount that should be questioned. All documentation to support the allowability of this transfer was provided to the auditor for review. There were errors in the original calculation of the total amount eligible under the Public Health and Economic Impacts category; however, we provided documentation to support that the total amount was eligible under the Revenue Loss - Provision of Government Services use category. Although we have identified a weakness in internal control over compliance, there was no actual noncompliance. Consequently, there is no cost that is considered unallowable; therefore, there should be no questioned cost. DOL Contact: Kimberly Smith, Deputy Commissioner, DOL, 207-621-5096 DAFS Contact: Frank Wiltuck, Director of Internal Audit, OSC, 207-626-8420 Auditor?s Concluding Remarks: Management asserts, ?The transfer of $80 million to the Unemployment Trust Fund is completely allowable, with a portion categorized under the Public Health and Economic Impacts use category and a portion under the Revenue Loss - Provision of Government Services use category.? However, OSC did not provide documentation to support this statement, as described below. OSA initially questioned the allowability of the $80 million transfer in November 2022. In the following months and in response to OSA?s request for all documentation to corroborate the allowability of the transfer, OSC only provided evidence to support the transfer under the CSLFRF Public Health and Economic Impacts use category. OSA reviewed this support and identified errors in the calculation for the allowable amount of the transfer under the CSLFRF Public Health and Economic Impacts use category. As a result of these errors, OSA notified the Department that a finding would be issued and costs of $51,482,644 would be questioned. In response to the finding communication from OSA, OSC initiated discussion of alternative use categories for CSLFRF under which the transferred amount would be considered allowable. OSC proposed recategorizing the unallowable portion of the transfer from the Public Health and Economic Impacts use category to the Provision of Government Services use category of CSLFRF. Though the unallowable portion of the transfer (the questioned costs) may ultimately be allowable under this alternative use category, the costs, at the time of the audit, were incurred under the Public Health and Economic Impacts use category. Management states, ?we are unable to determine why the auditor has identified a questioned cost? and has provided the definition of Questioned Costs as defined by 2 CFR 200.1. However, OSC?s interpretation implies that OSA should allow changes in supporting documentation that do not align with the original intent of the usage of funds. The recategorization of the unallowable costs to another use category may be part of OSC?s corrective action plan; however, the documentation provided as audit evidence does not properly support $51,482,644 in CSLFRF Public Health and Economic Impacts costs. OSA cannot allow the Department to alter supporting documentation to avoid questioned costs. If OSA permitted the State to alter supporting documentation whenever OSA identified unallowable costs, there would never be any questioned costs to report. This is not the intent of 2 CFR 200.1. Managements acknowledges ?there were errors in the original calculation of the total amount eligible under the Public Health and Economic Impacts category? and ?we have identified a weakness in internal control over compliance,? which is the basis of this finding. The finding remains as stated. (State Number: 22-1699-01)
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation's to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reports tested, the Reports were not supported by the unit's records. The financial information provided did not agree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports. Additionally, four of six key line items selected for testing could not be traced to supporting documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system, as well as retain documentation to support reports, prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls, as well as retain documentation, to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation's to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reports tested, the Reports were not supported by the unit's records. The financial information provided did not agree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports. Additionally, four of six key line items selected for testing could not be traced to supporting documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system, as well as retain documentation to support reports, prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls, as well as retain documentation, to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation's to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reports tested, the Reports were not supported by the unit's records. The financial information provided did not agree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports. Additionally, four of six key line items selected for testing could not be traced to supporting documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system, as well as retain documentation to support reports, prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls, as well as retain documentation, to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation's to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reports tested, the Reports were not supported by the unit's records. The financial information provided did not agree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports. Additionally, four of six key line items selected for testing could not be traced to supporting documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system, as well as retain documentation to support reports, prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls, as well as retain documentation, to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation's to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reports tested, the Reports were not supported by the unit's records. The financial information provided did not agree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports. Additionally, four of six key line items selected for testing could not be traced to supporting documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system, as well as retain documentation to support reports, prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls, as well as retain documentation, to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
(2022-061) Title: Internal control over ICA program cash management needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Health and Human Services Service Center Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Immunization Cooperative Agreements (COVID-19) Assistance Listing Number: 93.268 Federal Award Identification Number: NH23IP922604 Compliance Area: Cash management Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302; 31 CFR 205.33; State Administrative and Accounting Manual (SAAM) Section 50.40.80 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must minimize the time between the drawdown of Federal funds and the disbursement of these funds for Federal program purposes. The timing and amount of fund transfers must be as close as administratively feasible to the Department?s actual cash outlay for program costs. Section 50.40.80 of the SAAM has defined administratively feasible as no more than seven business days. Condition: The Department of Health and Human Services Service Center (DHHS SC) is responsible for the drawdown of funds for the Immunization Cooperative Agreements (ICA) program. The DHHS SC requests Federal funds in order to reimburse ICA program expenditures. In December 2021, $478,459 of program expenditures that had previously been reimbursed under the ICA program were recategorized as eligible Coronavirus Relief Fund expenditures. The DHHS SC did not immediately return the funds that were received for these expenditures and continued to draw additional Federal funds under the ICA grant. As a result, the State?s Federal cash balances for the ICA program exceeded the State?s administratively feasible threshold of seven business days for approximately seven months. Context: In fiscal year 2022, there were approximately 160 Federal grant drawdowns totaling $8.7 million for the ICA program. Cause: ? Lack of adequate procedures to capture all program activity ? Lack of supervisory oversight Effect: The Federal government may impose more stringent program-specific cash management requirements based on noncompliance. Recommendation: We recommend that the DHHS SC develop and implement policies and procedures to address identification and timely return of excess grant funds to the Federal government. Corrective Action Plan: See F-23 Management?s Response: The DHHS and the DHHS Financial Service Center agree with this finding. Policies and procedures will be reviewed for CMIA, draw procedures and reconciliations. The grant daily files will be reconciled for the Immunization grants from 2021 through current by December 31, 2023 in order to timely identify and return excess grant funds. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 22-1118-02)
(2022-061) Title: Internal control over ICA program cash management needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Health and Human Services Service Center Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Immunization Cooperative Agreements (COVID-19) Assistance Listing Number: 93.268 Federal Award Identification Number: NH23IP922604 Compliance Area: Cash management Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302; 31 CFR 205.33; State Administrative and Accounting Manual (SAAM) Section 50.40.80 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must minimize the time between the drawdown of Federal funds and the disbursement of these funds for Federal program purposes. The timing and amount of fund transfers must be as close as administratively feasible to the Department?s actual cash outlay for program costs. Section 50.40.80 of the SAAM has defined administratively feasible as no more than seven business days. Condition: The Department of Health and Human Services Service Center (DHHS SC) is responsible for the drawdown of funds for the Immunization Cooperative Agreements (ICA) program. The DHHS SC requests Federal funds in order to reimburse ICA program expenditures. In December 2021, $478,459 of program expenditures that had previously been reimbursed under the ICA program were recategorized as eligible Coronavirus Relief Fund expenditures. The DHHS SC did not immediately return the funds that were received for these expenditures and continued to draw additional Federal funds under the ICA grant. As a result, the State?s Federal cash balances for the ICA program exceeded the State?s administratively feasible threshold of seven business days for approximately seven months. Context: In fiscal year 2022, there were approximately 160 Federal grant drawdowns totaling $8.7 million for the ICA program. Cause: ? Lack of adequate procedures to capture all program activity ? Lack of supervisory oversight Effect: The Federal government may impose more stringent program-specific cash management requirements based on noncompliance. Recommendation: We recommend that the DHHS SC develop and implement policies and procedures to address identification and timely return of excess grant funds to the Federal government. Corrective Action Plan: See F-23 Management?s Response: The DHHS and the DHHS Financial Service Center agree with this finding. Policies and procedures will be reviewed for CMIA, draw procedures and reconciliations. The grant daily files will be reconciled for the Immunization grants from 2021 through current by December 31, 2023 in order to timely identify and return excess grant funds. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 22-1118-02)
(2022-073) Title: Internal control over TANF reporting needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Health and Human Services Service Center Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Temporary Assistance for Needy Families (TANF) (COVID-19) Assistance Listing Number: 93.558 Federal Award Identification Number: 1901METANF, 2001METANF, 2101METANF Compliance Area: Reporting Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302(b) The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must maintain accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with reporting requirements. Condition: The Department is required to submit accurate and complete financial reports to the Federal government. On the SF-425 financial report for the period ending December 31, 2021, cumulative Federal cash disbursements should have been reported in the amount of $54,898,345 instead of $32,885,310. Context: TANF program expenditures totaled $81.9 million in fiscal year 2022. Cause: Lack of supervisory oversight Effect: Noncompliance with Federal reporting requirements Recommendation: Although TANF is no longer required by the Federal government to submit SF-425 reports beginning with the period ending March 31, 2022, we recommend that the Department enhance their review procedures to ensure all financial reports are accurate and complete. Corrective Action Plan: See F-27 Management?s Response: The DHHS and the DHHS Financial Service Center agree with this finding. Effective April 1, 2022, the US Department of Health and Human Services grant recipients are no longer required to complete the quarterly Federal Cash Transaction Report ?FCTR? (also referred to as the FFR-425 or SF-425) to report cumulative Federal cash disbursements. Procedures are currently in place to ensure Federal financial reporting is reviewed accurately. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 22-1100-03)
(2022-073) Title: Internal control over TANF reporting needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Health and Human Services Service Center Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Temporary Assistance for Needy Families (TANF) (COVID-19) Assistance Listing Number: 93.558 Federal Award Identification Number: 1901METANF, 2001METANF, 2101METANF Compliance Area: Reporting Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302(b) The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must maintain accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with reporting requirements. Condition: The Department is required to submit accurate and complete financial reports to the Federal government. On the SF-425 financial report for the period ending December 31, 2021, cumulative Federal cash disbursements should have been reported in the amount of $54,898,345 instead of $32,885,310. Context: TANF program expenditures totaled $81.9 million in fiscal year 2022. Cause: Lack of supervisory oversight Effect: Noncompliance with Federal reporting requirements Recommendation: Although TANF is no longer required by the Federal government to submit SF-425 reports beginning with the period ending March 31, 2022, we recommend that the Department enhance their review procedures to ensure all financial reports are accurate and complete. Corrective Action Plan: See F-27 Management?s Response: The DHHS and the DHHS Financial Service Center agree with this finding. Effective April 1, 2022, the US Department of Health and Human Services grant recipients are no longer required to complete the quarterly Federal Cash Transaction Report ?FCTR? (also referred to as the FFR-425 or SF-425) to report cumulative Federal cash disbursements. Procedures are currently in place to ensure Federal financial reporting is reviewed accurately. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 22-1100-03)
(2022-077) Title: Internal control over Child Support Enforcement expenditures needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Health and Human Services Service Center Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Child Support Enforcement Assistance Listing Number: 93.563 Federal Award Identification Number: 2001MECSES, 2101MECSES, 2201MECSES Compliance Area: Activities allowed or unallowed Allowable costs/cost principles Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302; 2 CFR 200.403; Cooperative Agreement Between State of Maine DHHS and Maine State Judicial Branch for State Fiscal Years 2022 and 2023, Section V (b)(1) The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs must be adequately documented. The State?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 determine that such funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in cost principles or in the Federal award as to types or amount of cost items. The Administrative Office of the Courts (AOC) under the Judicial Branch must provide a report to the Department of Health and Human Services? (DHHS) Division of Support and Recovery (DSER) for all Judicial Branch estimated expenditures. This report must detail costs that are eligible for Federal financial participation and must be provided within 35 calendar days after the close of the quarters ending in March, June, September, and December. These estimated expenditures are calculated using the per minute rate that was in effect for the prior fiscal year. Within 35 days after the close of the State fiscal year, the AOC will update the per minute rate and provide DSER a report with actual expenditures for the State fiscal year. Condition: The Child Support Enforcement (CSE) program is administered by DSER within DHHS. DHHS has a cooperative agreement with AOC that defines roles, relationships, and responsibilities of the parties, and sets forth a basis for financial reimbursement for court services provided to DHHS by AOC. These services include conducting paternity hearings; hearings to establish, modify, or enforce support orders; civil and criminal complaint hearings related to CSE; providing mediation services; and conducting proceedings related to income withholding responsibilities. AOC sends monthly invoices to the DHHS Service Center (DHHS SC) with estimated costs for work performed for the CSE program. DHHS SC is responsible for transferring funds from the CSE program to AOC. On a quarterly basis, AOC provides DHHS SC with a reconciliation of estimated costs to actual costs. This quarterly reconciliation utilizes the per minute rate that was in effect for the prior fiscal year and is due 35 days after the close of the quarter. Annually, the per minute rate is updated and AOC provides DHHS SC with a final report of actual costs with the updated per minute rate. This final report is due within 35 days after the close of the fiscal year. The Office of the State Auditor (OSA) selected six transfers from DHHS SC to AOC for testing and found that costs incurred for court services were not adequately supported. DHHS SC did not receive two quarterly reports from AOC; therefore, court expenditures were based on estimated costs rather than actual costs. Furthermore, the annual report and reconciliation of estimated costs to actual costs was not completed until five months after the fiscal year end. As a result, expenditure amounts reported by the CSE program are not based on actual costs. OSA reviewed the annual reconciliation and determined that the variance is not material to the program. OSA selected a non-statistical random sample. Context: The CSE program expended $18.8 million in Federal funds during fiscal year 2022, of which $2.2 million was used for court services. Cause: Management override of controls. The program elected to defer reconciling estimated costs to actual costs until the per minute rate was updated by AOC. Effect: CSE program expenditures for fiscal year 2022, specifically relating to AOC expenditures, were understated by the amount included in the annual reconciling invoice for AOC. Recommendation: We recommend that the Department enhance oversight of established procedures to ensure that CSE is in compliance with Federal regulations. Corrective Action Plan: See F-27 Management?s Response: The Department agrees with this finding. The Division of Support Enforcement and Recovery and the Judicial Branch will modify the language of the cooperative agreement to clarify that all allowable costs subject to federal financial participation are adequately and timely documented. Contact: Jerry Joy, Director, Division of Support Enforcement and Recovery, DHHS, 207-624-6985 (State Number: 22-1128-02)
(2022-090) Title: Internal control over DG ? PA program cash management needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Defense, Veterans and Emergency Management State Bureau: Maine Emergency Management Agency Federal Agency: U.S. Department of Homeland Security Assistance Listing Title: Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (COVID-19) Assistance Listing Number: 97.036 Federal Award Identification Number: 4354DRMEP00000001, 4367DRMEP00000001, 4522DRMEP00000001 Compliance Area: Cash management Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302; 31 CFR 205.33; State Administrative and Accounting Manual (SAAM) Section 50.40.80 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Financial records must adequately identify the source and application of funds and provide accountability for all funds, property, and other assets related to the Federally funded activities. The Department must minimize the time between the drawdown of Federal funds and the disbursement of these funds for Federal program purposes. The timing and amount of fund transfers must be as close as is administratively feasible to the Department?s actual cash outlay for program costs. Section 50.40.80 of the SAAM has defined administratively feasible as no more than seven business days. Condition: The Maine Emergency Management Agency (MEMA) did not minimize the time between drawdown and disbursement of Federal funds. In the Office of the State Auditor?s (OSA) testing of 21 drawdowns: ? the cash balance was not taken into consideration when requesting any of the Federal drawdowns; and ? 11 of the disbursements for program costs ranged from 8 to 45 days after the Federal funds were received. OSA selected a judgmental and a non-statistical random sample. Context: During fiscal year 2022, MEMA expended $80.2 million in Disaster Grants ? Public Assistance (DG ? PA) grant funds. Cause: ? Lack of adequate policies and procedures ? Lack of staff resources available to process grant drawdowns, monitor cash balances, and process payments to subrecipients due to the increased number of COVID-19 grants managed by the agency Effect: ? The Federal government may impose more stringent program-specific cash management requirements based on noncompliance. ? Noncompliance with Federal and State regulations Recommendation: We recommend that the Department develop and implement policies and procedures to ensure that Federal cash is requested based on immediate cash needs which includes consideration of existing cash balances. We also recommend the Department review its staffing needs to ensure there are adequate resources to process and provide supervisory oversight over the increased workload from COVID-19 grants. Corrective Action Plan: See F-32 Management?s Response: The Department agrees with this finding. In State Fiscal Year 2023 MEMA started utilizing the Security and Employment Service Center to draw funds and to ensure the drawdown procedure addresses the need to (1) consider previous cash balances before making a drawdown and (2) ensure the period from drawdown to disbursement does not exceed seven days. The new procedure will provide for limited review and testing by MEMA as appropriate. Contact: Joe Legee, Deputy Director, MEMA, DVEM, 207-624-4400 (State Number: 22-1502-02)
(2022-090) Title: Internal control over DG ? PA program cash management needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Defense, Veterans and Emergency Management State Bureau: Maine Emergency Management Agency Federal Agency: U.S. Department of Homeland Security Assistance Listing Title: Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (COVID-19) Assistance Listing Number: 97.036 Federal Award Identification Number: 4354DRMEP00000001, 4367DRMEP00000001, 4522DRMEP00000001 Compliance Area: Cash management Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302; 31 CFR 205.33; State Administrative and Accounting Manual (SAAM) Section 50.40.80 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Financial records must adequately identify the source and application of funds and provide accountability for all funds, property, and other assets related to the Federally funded activities. The Department must minimize the time between the drawdown of Federal funds and the disbursement of these funds for Federal program purposes. The timing and amount of fund transfers must be as close as is administratively feasible to the Department?s actual cash outlay for program costs. Section 50.40.80 of the SAAM has defined administratively feasible as no more than seven business days. Condition: The Maine Emergency Management Agency (MEMA) did not minimize the time between drawdown and disbursement of Federal funds. In the Office of the State Auditor?s (OSA) testing of 21 drawdowns: ? the cash balance was not taken into consideration when requesting any of the Federal drawdowns; and ? 11 of the disbursements for program costs ranged from 8 to 45 days after the Federal funds were received. OSA selected a judgmental and a non-statistical random sample. Context: During fiscal year 2022, MEMA expended $80.2 million in Disaster Grants ? Public Assistance (DG ? PA) grant funds. Cause: ? Lack of adequate policies and procedures ? Lack of staff resources available to process grant drawdowns, monitor cash balances, and process payments to subrecipients due to the increased number of COVID-19 grants managed by the agency Effect: ? The Federal government may impose more stringent program-specific cash management requirements based on noncompliance. ? Noncompliance with Federal and State regulations Recommendation: We recommend that the Department develop and implement policies and procedures to ensure that Federal cash is requested based on immediate cash needs which includes consideration of existing cash balances. We also recommend the Department review its staffing needs to ensure there are adequate resources to process and provide supervisory oversight over the increased workload from COVID-19 grants. Corrective Action Plan: See F-32 Management?s Response: The Department agrees with this finding. In State Fiscal Year 2023 MEMA started utilizing the Security and Employment Service Center to draw funds and to ensure the drawdown procedure addresses the need to (1) consider previous cash balances before making a drawdown and (2) ensure the period from drawdown to disbursement does not exceed seven days. The new procedure will provide for limited review and testing by MEMA as appropriate. Contact: Joe Legee, Deputy Director, MEMA, DVEM, 207-624-4400 (State Number: 22-1502-02)
FINDING 2022-006 Subject: Title I Grants to Local Educational Agencies - Reporting Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation did not have an internal control over the final expenditure reports submitted during the audit period. The Treasurer submitted the report without a documented review or oversight in place to prevent, or detect and correct, errors on the reports. The School Corporation must report all required set asides manually on the final expenditure report submitted to the Indiana Department of Education. Grant award S010A200014 had a required set-aside for parental involvement; however, a set aside was not reported on the final expenditure report. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the S010A200014 grant award. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. Noncompliance with the grant agreement and Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: Title I Grants to Local Educational Agencies - Reporting Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation did not have an internal control over the final expenditure reports submitted during the audit period. The Treasurer submitted the report without a documented review or oversight in place to prevent, or detect and correct, errors on the reports. The School Corporation must report all required set asides manually on the final expenditure report submitted to the Indiana Department of Education. Grant award S010A200014 had a required set-aside for parental involvement; however, a set aside was not reported on the final expenditure report. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the S010A200014 grant award. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. Noncompliance with the grant agreement and Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-009 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The annual Elementary and Secondary School Emergency Relief (ESSER) annual data collection reports (Reports) were prepared by the Treasurer and reviewed and approved by the Director of Curriculum prior to submission; however, the review process in place did not prevent, or detect and correct, errors. Of the six reports tested, four (ESSER I, Year 1 and Year 2, ESSER II, Year 1, and ESSER III Year 1) were not supported by the School Corporation's records. Key line items selected for review and verification were determined to be incorrectly reported on the ESSER I, Year 1 report as well as omitted from the ESSER I, Year 2, ESSER II, Year 1, and ESSER III, Year 1 reports. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not established a system of internal controls that would have ensured compliance with the Equipment and Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-009 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The annual Elementary and Secondary School Emergency Relief (ESSER) annual data collection reports (Reports) were prepared by the Treasurer and reviewed and approved by the Director of Curriculum prior to submission; however, the review process in place did not prevent, or detect and correct, errors. Of the six reports tested, four (ESSER I, Year 1 and Year 2, ESSER II, Year 1, and ESSER III Year 1) were not supported by the School Corporation's records. Key line items selected for review and verification were determined to be incorrectly reported on the ESSER I, Year 1 report as well as omitted from the ESSER I, Year 2, ESSER II, Year 1, and ESSER III, Year 1 reports. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not established a system of internal controls that would have ensured compliance with the Equipment and Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-009 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The annual Elementary and Secondary School Emergency Relief (ESSER) annual data collection reports (Reports) were prepared by the Treasurer and reviewed and approved by the Director of Curriculum prior to submission; however, the review process in place did not prevent, or detect and correct, errors. Of the six reports tested, four (ESSER I, Year 1 and Year 2, ESSER II, Year 1, and ESSER III Year 1) were not supported by the School Corporation's records. Key line items selected for review and verification were determined to be incorrectly reported on the ESSER I, Year 1 report as well as omitted from the ESSER I, Year 2, ESSER II, Year 1, and ESSER III, Year 1 reports. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not established a system of internal controls that would have ensured compliance with the Equipment and Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of eight key line items tested the documentation provided did not agree with the information reported. The Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, and GEER I, Year 1, reports were understated by 5.5 and 19 FTE employees, respectively. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of eight key line items tested the documentation provided did not agree with the information reported. The Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, and GEER I, Year 1, reports were understated by 5.5 and 19 FTE employees, respectively. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of eight key line items tested the documentation provided did not agree with the information reported. The Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, and GEER I, Year 1, reports were understated by 5.5 and 19 FTE employees, respectively. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of eight key line items tested the documentation provided did not agree with the information reported. The Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, and GEER I, Year 1, reports were understated by 5.5 and 19 FTE employees, respectively. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of eight key line items tested the documentation provided did not agree with the information reported. The Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, and GEER I, Year 1, reports were understated by 5.5 and 19 FTE employees, respectively. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of eight key line items tested the documentation provided did not agree with the information reported. The Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, and GEER I, Year 1, reports were understated by 5.5 and 19 FTE employees, respectively. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2022-002 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a documented review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education?s deadline. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Additionally, amounts reported on the second Annual Report did not agree to underlying detail. ESSER II was understated on the report by $209,559 and ESSER III was understated by $29,267. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2022-002 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a documented review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education?s deadline. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Additionally, amounts reported on the second Annual Report did not agree to underlying detail. ESSER II was understated on the report by $209,559 and ESSER III was understated by $29,267. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2022-002 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a documented review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education?s deadline. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Additionally, amounts reported on the second Annual Report did not agree to underlying detail. ESSER II was understated on the report by $209,559 and ESSER III was understated by $29,267. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2022-003. Allowed and Unallowed Costs. (ALN 84.425D ESSER II) CRITERIA: 2 CFR 200.302 requires that a non-federal entity?s financial management systems must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions. This section further requires 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, including a comparison of expenditures with budget amounts for each federal award. 2 CFR 200.303 requires that a non-federal entity must establish and maintain effective internal control over a federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal award. CONDITION: We noted seven (7) line items in the ESSER II grant where actual expenditures exceeded budget expenditures by a total of $27,046.22. The ESSER II grant budgeting software was aligned with the approved budget; however, unfavorable spending variances were not addressed by grant oversight personnel. CAUSE: The school district failed to address unfavorable budgetary variances when actual expenditures exceeded approved budget amounts. EFFECT: The effect is both a breakdown in budgetary controls and unallowable program costs. QUESTIONED COSTS: $27,046.22 RECOMMENDATION: The district should limit expenditures to approved budgeted amounts for this grant. VIEWS OF RESPONSIBLE OFFICIALS: See the school district?s response in the auditee?s corrective action plan in this report.
Finding 2022-003: COVID-19 Education Stabilization Fund, CFDA 84.425U U.S. Department of Education Passed through the Colorado Department of Education Compliance Requirements: Activities Allowed and Unallowed, Allowable Costs/Cost Principles Grant No.: 4414 Type of Finding: Internal Control Over Compliance (material weakness) and Compliance (material noncompliance) Condition: The District submitted and received reimbursement for indirect costs that exceeded the approved application for funds approved by the Colorado Department of Education, and did not have supporting documentation to substantiate the amount requested. Cause: The District does not have a system of internal control in place to ensure expenditures are in compliance with grant terms and properly supported. Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require the source and application of funds for federally-funded activities be supported by source documentation (2 CFR 200.302(b)(3)). Questioned Costs: $27,743 Effect: The District did not comply with financial management requirements for federal awards. An audit adjustment was proposed to correctly state revenue and expenditure account balances. Recommendation: The District should strengthen its internal controls with adopted policies and procedures to include a review of reimbursement requests to ensure indirect costs are allowable and adequate source documentation is maintained for federally-funded activities.
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-02 ? Fiscal Management System, Ensure Compliance with Federal Regulations Over Ac-counting Systems (Material Weakness) Criteria: Management is responsible for establishing and maintaining effective internal control over finan-cial reporting. Internal controls should allow management or employees in the normal course of perform-ing their assigned functions to prevent or detect material misstatements in the financial reporting of all dis-trict funds. The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of the fi-nancial and federal information reported on such schedule to verify the accuracy and completeness of fi-nancial information reported. CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial management sys-tem of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports using QuickBooks Jobs fea-ture, that showed identification between individual grant expenditures and revenues. Entries were prepared or recorded using the jobs feature, but not on a timely basis throughout the year, as portions were complet-ed retroactively, and general ledger restated for the entire fiscal year. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting for a large portion of the year. Cause: The District had relied on inadequately trained individuals to record activities and setup of their general ledger. The accounting records were retroactively constructed to meet Federal award reporting pur-poses, but late in the fiscal year. District management did not have sufficient training or monitoring poli-cies to recognize and correct the deficiency. Effect or Potential Effect: Failure to record transactions timely into the general ledger for Umpqua Public Transportation District, and lack of proper accounting structure separating revenues and expenditures into each Federal and State or Local grant may result in transactions not being properly included in the district?s financial statements. The potential for incorrect financial reporting, and untimely results, with the inability to rely on the general ledger for correct and timely information, may also cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Restatement of the general ledger was necessary for proper reporting of grants for the Schedule of Federal Awards. Tracking of matching local and state grants remains ineffective. Repeat of a Prior-Year Finding: Yes, Financial Statement Findings 2021-4 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. In addition, we recommend that the district establish policies and procedures to en-sure that all required matching of grant expenditures be recorded in sufficient detail tracking to ensure that all matching program revenues and expenditures are reported correctly in the fiscal year. We also recom-mend that the district continue training program, policies and procedures for staff and management for ad-ministering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be adhered to and further training imple-mented. Corrective Action Plan: The District hired a Finance Manager to oversee the day-to-day financial opera-tions of the district. The Finance Manager retroactively created accounting records to separate grant reve-nues and related expenditures, for both Federal grant records as well as State grant records. The Finance Manager will improve the general ledger to allow the recording of the matching identification for each fed-eral grant. This will allow the activities of the district to be recorded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit Distric
Finding 2022-03 - Source Documentation (Significant Deficiency) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabili-ties. Grant Agreement 33573 (City of Reedsport). Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Manage-ment CFDA Title and Number: 20.509 (5311) CARES 5311 Operating Assistance. Formula Grants for Rural Areas and Tribal Transit Program. Grant Agreement 34196. Name of Federal Agency: Transit Services Program Cluster Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete dis-closure of the financial results of each Federal award or program in accordance with the reporting require-ments set forth in 200.328 and 200.329. Condition: The District prepared drawdown calculations according to an internal reconciliation spread-sheet tool outside of the General Ledger rather than utilizing proper General Ledger expenditure and sup-porting backup information. Cause: General ledger reconciling procedures were not enforced or completed. Effect or Potential Effect: Activities or costs that are allowed or allowable could potentially be overpaid or underpaid. Questioned Cost: No Context: During our testing of expenditures, we found no Federal drawdown reimbursement requests se-lected for testing that did not reconcile to their corresponding expenditures. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-8 Recommendation: The District should establish policies and procedures to ensure that each drawdown is reconciled with supporting expenditure documents and general ledger postings prior to reimbursement be-ing requested. District's Response: The District had relied on inadequately skilled or trained individuals for recording activity in the general ledger. General ledger activity was not available timely, or in sufficient quality such that the General Manager could rely upon the general ledger to gather information for reporting to grantors. Consequently, the General Manager developed and relied upon their own spreadsheet records for grant re-imbursement requests. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the District. The Finance Manager has made improvements in the general ledger recording and reporting for federal award requirements, but had not yet been able to eliminate the reliance upon the General Manager?s spreadsheet tool for grant management. The Finance Manager will continue to develop the general ledger procedures such that all necessary federal and state grant reporting requirements will be met within the general ledger. This will allow the activities of the district to be recorded and managed on a timely basis. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Finding 2022-004 Information on the federal program: Subject: Education Stabilization Fund (ESSER) ? Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER and GEER grant awards. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted the amounts reported as expended, $10,000 for ESSER I and $0 for ESSER II, on the second report did not agree to the amounts expended per the underlying expenditure records, $92,920 for ESSER I and $18,169 for ESSER II, of the School Corporation. Additionally, we noted the for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.